New data shows American shoppers are still spending, but the early part of November is shaping up as a quiet stretch before the holiday rush. Redbook, a retail sales tracker, said same-store sales rose 10.1% year over year in the week ended November 7. That's a solid gain, but retailers are treating the period as a reset before post-Thanksgiving demand kicks in.
What the numbers show
Same-store sales measure revenue at stores open at least a year, giving a clearer picture of underlying demand than total sales, which can be inflated by new locations. Redbook's weekly index is one of the earliest reads on consumer spending, so investors watch it closely for signs of strength or weakness.
The 10.1% jump suggests spending is holding up well compared with a year ago. But Redbook also noted that sales in the first week of the month ran below plan, and it expects momentum to build later in the season. That fits with a pattern many retailers see: shoppers are waiting for Black Friday and Cyber Monday deals before opening their wallets.
One notable trend in the data: shoppers are increasingly using artificial intelligence tools to compare gifts and prices ahead of the holiday season. That's a shift that could change how retailers compete, as AI makes it easier for consumers to find the best deals without visiting multiple stores or websites.
How markets are reacting
The mixed picture showed up in the stock market on Tuesday. The Consumer Staples Select Sector SPDR Fund (XLP) rose 0.4%, while the Consumer Discretionary Select Sector SPDR Fund (XLY) fell 0.3%. That split is a sign investors are favoring “needs” over “wants” heading into the holidays.
Consumer staples include everyday items like food, household products, and personal care—things people buy regardless of the economy. Consumer discretionary includes things like clothing, electronics, and dining out, which shoppers can cut back on when they feel cautious. When discretionary stocks lag, it often suggests investors expect consumers to be more careful with their spending.
This cautious mood isn't unique to the US. In the UK, for example, shoppers are also tightening their belts even as overall spending rises, a reminder that consumer behavior can vary by region and income level.
What it means for investors
For everyday investors, the key takeaway is that the consumer is still spending, but the pace may slow as the holiday season progresses. Retailers are likely to see a surge in late November and December, but the early weeks of the month can be a lull as shoppers wait for discounts.
Investors should watch for updates from major retailers in the coming weeks, especially when they report earnings or give holiday guidance. Companies that can navigate the shift to AI-powered price comparison may have an edge, as shoppers become more efficient at finding deals.
It's also worth noting that the split between staples and discretionary stocks is a classic pattern in uncertain times. When investors are nervous about the economy, they tend to rotate into defensive sectors like staples, which offer steady demand and dividends. Discretionary stocks, meanwhile, can be more volatile because they depend on consumer confidence.
That doesn't mean discretionary stocks are a bad bet—just that they carry more risk if spending weakens. For a balanced portfolio, having exposure to both sectors can help smooth out the ups and downs.
As the holiday season unfolds, the data will show whether the early November pause turns into a strong finish or a more muted one. Either way, the numbers will give investors a clearer read on the health of the American consumer.
