Holiday Season Data Bonanza: Retailers Focusing On What They Can Control, Hoping for the Best

Many retailers are still focused on their bottom lines (it's what they can control) while doing their best to understand consumer behavior, and trying to limit their downside risk as much as possible.

Bull 🐂 case for the holiday season:

* Consumers in YOLO mode. Because housing prices are so high, many middle-class have given up saving for a house .. challenge for many brands is that they are reallocating money to experiences/vacations, and luxury etc.

* Top retailers will be fine. Amazon, Walmart, Costco. Target seems to be repositioning down-market to get the consumer's attention again.

A friend of mine at a major brand just said to me you are either Louis Vuitton are you are Walmart right now, there is not much middle. I agree with her.

* Mastercard says holiday spending up 3.7%, (Deloitte predicts 3.5 - 4.6%) with eCommerce up 6.7% (Deloitte predicts between 10.3% and 12.8%). I think you will see a lot of small and mid-market merchants do well, just because of the gifting season.

* Labor market is still "strong to quite strong", which is similar to Ben Stiller says to Owen Wilson in Meet the Parents about his stock portfolio.... and with about as much conviction.

* October is already the start of the holiday season, so hope you're ready ;-). Consumers getting an early start this year again, but that will be tempered by knowing Cyber Monday will probably have the absolute best deals for electronics and related items.

Here are the bear 🐻 considerations:

* Inventory levels are leaner across the board, which at some point limits the season's upside. However, I think retailers selling through their inventory and hitting their forecasts they would put in the "good problem" bucket.

* Apparel could be challenged according to Mastercard, meaning flat to down. GlobalData suggest home goods could struggle as well.

* Inflation up 0.6% month/month in August, and up 3.7% over last year.

NRF chief economist is reporting that consumer spending momentum is slowing.

* That student loan repayment thing, though.

* UBS found consumers are feeling cautious on things, which may not hurt the holidays because you have to buy gifts for friends.

* Deloitte says that deals will continue to be a huge focus for consumers, which will squeeze margins.

All in all, another mixed season but there is still some hope depending on your category and price points. After all, people "need" to spend during holiday on their friends and family. You just need to be the type of product they can stretch their dollar with.