The holiday shopping season got off to a solid start over the weekend, as Black Friday’s online sales beat expectations and started to build some much-needed momentum for the retail sector. According to Adobe’s online sales tracker, consumers shelled out a record $9.12 billion shopping online on Black Friday. That’s up 2.3% over last year and well above expectations of a 1% increase. But that’s only one piece of the puzzle. In another early look report, traffic on Black Friday at brick-and-mortar retail stores rose about 3% over 2021, according to retail tracker Sensormatic, which attributed the rise to increased promotional activity and “favorable in-store experiences.” While inflation has squeezed consumers this year, more than 166 million people planned to shop from Thanksgiving Day through Cyber Monday, according to the National Retail Federation’s annual survey . That’s 8 million more than last year and the highest estimate since 2017. The final NRF numbers are due out Tuesday. KeyBanc cited Sensormatic data in a research note Sunday — saying, if accurate, the numbers would be higher than what its analysts are seeing. In recent channel checks, KeyBanc sees traffic at physical retailers was “down to flat” year over year. The analysts point out that this year’s holiday shopping calendar is one day longer than in 2021. Many struggling retailers benefited from this seemingly strong start to holiday shopping. Goldman Sachs said retailers like Target (TGT) and Bed Bath & Beyond (BBBY) attracted more consumers through deep discounts on products. In a separate note, Deutsche Bank noted “strong demand for beauty” at retailers like Ulta Beauty (ULTA), Kohl’s (KSS), Victoria’s Secret (VSCO) and Bath & Body Works (BBWI). Apparel retail traffic was also solid. Deutsche Bank analysts said American Eagle Outfitters (AEO) was a leader among teens. Other standout performers included Gap ‘s (GPS) Old Navy brand as well as Abercrombie & Fitch (ANF) and its Hollister brand. Bottom line With holiday shopping underway, we continue to like off-price retailers in these trying times. We’re most bullish on Club holding TJX Companies (TJX), which operates T.J. Maxx, HomeGoods and Marshalls. Major full-price retailers have been dealing with inventory gluts, which serve as a bumper crop of cheap merchandise that discounters like TJX, Ross Stores (ROST) and Burlington Stores (BURL) can turn around for a good profit but also a good bargain for customers. Many of the big box retailers, meanwhile, are still working through inventory gluts as well. They ordered too much this year, expecting a repeat of the pandemic buying spree during 2020 and 2021. But consumer spending shifted from buying things to experiences like eating out and going on vacation, leaving many retailers with too much stuff. Bad news for those stores has been good for TJX, which has outperformed the broader market this year. We see more strong performance ahead. (Jim Cramer’s Charitable Trust is long…
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