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So let's stick with the consumer as focus shifts toward the new year. Data telseia with Telsey Advisory Group writing heading into twenty twenty six, we expect events, hire, reef, tax refunds, and more accommodative interest rates to drive a continued recovery and discretionary spending, especially among younger consumers. Data joins us now in person, thank you so.
Much for being here, Thank you for having me.
It's wonderful to get your insights as we all look at our gifts from the holidays, decide which ones we need to return. What's to read on how well this season really did perform for retailers broadly across the sphere.
I think holiday season was solid. I think those increases three point nine four point two percent very much in line with expectations. These ten days after Christmas are very important too, whether for returns, for gift card redemptions, all very important to see what it looks like. But the product newness drove to demand, and with the case shaped economy that we have, you're definitely seeing at the higher
end and the lower end looking for value. And that's where you saw some of the traffic, whether it's the Walmart's, whether it's the Tjx's. They were there the last ten days before Christmas, as always, is where you got the real bump up in terms of top line.
I'm fascinated by the bifurcation between Walmart and Target because I had seen them previously in kind of the same box. But Walmart has done so well this year and Target has disappointed.
Why.
I think overall what you've seen from Walmart and Target store standards have fallen. You haven't seen the same innovation and product newness. You haven't seen the same forward momentum of movement, particularly with technology, where Walmart is anticipating what the customer needs and they really have modernized their whole store format. The Walmart of today is not the Walmart of five or even ten years ago.
If we see a CA shaped toomy, do we get Dollar Tree? You know these family dollar kind of discount stores doing well, because if I look at the stock performance, I don't see Dollar Tree taking off.
I think overall you will see those dollar stores perform. Keep in mind that in twenty twenty five, the focus on tariffs who imports goods from China was impactful certainly to the dollar stores, and now lapping tariffs should be a benefit to them over time. Who you saw is share gainers. It was all the off pricers, I mean, whether it was Burlington Ross Stores or TJ Max. With the diversification of the assortment that they had, they captured customers.
What's fascinating to me is you're talking about how this was a solid holiday season, and yet we're talking about a bankruptcy potentially at the end of this month of one of the biggest retailers, of saxopith Avenue, which faces more than one hundred billion dollars of a debt payment. A lot of people are wondering whether that will actually happen.
Can you square this story the idea that we're talking about robust sales, a steady consumer I'll be a picky or choosier or whatever you want to say, at the same time that we could see a bankruptcy of one of the biggest retailers out there.
Well, when you think of who's gaining share from that, you look at the new brands that both Bloomingdale's and Nordstrom are putting on their shelves, stocking in their stores, they're gaining share. Just across the street on fifty ninth Street, Bloomingdale's just opened a new extension to their fourth floor with newer brands, whether it's Victoria Beckham, whether it's Valentino Totem.
They have a whole new assortment of goods out there that, frankly, perhaps if not for this change, you would not see those brands in Bloomingdale's, and you're seeing it in Bloomingdale's and a Nordstrom.
How much is this a pattern that you expect to be repeated, that we're going to see wholesale bankruptcies of some retailers that are not keeping up with a new product, while others I'm thinking of Walmart or I'm thinking of Bloomingdale's continue to gain share. Sort of the big get bigger can invest in technology, and you see wholesale bankruptcies. On the other.
Side, financial leverage is very important in order to keep the operations of a retailer running smoothly. You get into trouble with financial leverage, that's an issue. It always takes a lot to kill a retailer. They don't just die overnight. Take a look, for example at Blockbuster from many years ago, and certainly we'll have to see what happens with that debt payment of Sacks that's coming to very shortly. But certainly, when one is weak, others can gain strength, and that's
what you're seeing in Bloomingdale's. In Nordstrom, we.
Talk about Bloomingdale's. Obviously it's a great store, it's an iconic department store across the street here, but it's owned by Macy's and that stock is down thirty percent this year. What's Macy's doing wrong that it's Bloomingdale's is doing right?
I think overall the bold new chapter strategy that the CEO of Macy's, Tony Spring, is put in place, they're making advancements and you're seeing some change in Macy's. Also.
You look this year at Macy's and what they've done where it's backstage with the off price, in their assortment, whether it's what they're doing with luxury, whether it's what they're doing with their own brands, and frankly, the store experience, the investments that they've made into the top one hundred and twenty five hundred and fifty stores is outperforming the core and I think you're going to continue to see the assessment of the footprint of Macy's continue to be
architected towards their best performing stores over time.
So you like Macy's. I mean, is this a buying opportunity than this dip.
I think Macy's is an opportunity. I think when you think about next year and you frankly think about the enhancements that they've made to assortment, both in Macy's and Bloomingdale's. It's not expensive for where it is, and you look at the landscape of department stores that are public companies, it's Macy's, Coals, and Dillard's. Macy's has an opportunity on valuation to move higher.
Dana, do you think that early next year we're going to see pretty big price increases across the board for retail goods.
You're going to see more price increases coming, But keep in mind this innovation and newness that we have. You don't have a comparative, so we'll have to see what those prices look like. Consumers are cautious and discerning, but they'll buy what they don't have.
Dana Telsea, wonderful, Thank you, thank you so much for being having us today. Happy New Year, Dana Telsea Telsey Advisory Group,