Retail ETFs Mixed After Black Friday Sales Jump

Consumers opened their wallets on Black Friday, despite high inflation and interest rates on credit cards. 

While the trend toward buying more online continued, physical stores appeared to grab a decent share of the spending. 

According to Mastercard SpendingPulse, U.S. retail sales on Nov. 24 increased by 2.5% year-over-year. That breaks down to an 8.5% gain for e-commerce sales and a 1.1% gain for in-store sales.  

“Consumers are navigating the holiday season well and taking advantage of holiday promotions, giving them ample choice as they hunt for gifts for everyone on their list,” said Steve Sadove, a senior adviser for Mastercard and a former CEO of Saks Inc. 

The data jibes with what Adobe Analytics found. According to the tech company, online Black Friday sales rose 7.5% to $9.8 billion from a year ago. 

Both the Mastercard and Adobe numbers suggest that online sales were strong this past Friday. 

That’s good news for two ETFs focused on e-commerce—the Amplify Online Retail ETF (IBUY) and the ProShares Online Retail ETF (ONLN)—which were both up around 1% midday on Monday.  

On the other hand, the Mastercard data indicates that sales at physical stores were up just a bit.  

However, that doesn’t match what Sensormatic Solutions found in its data. According to its analytics, brick-and-mortar shopper visits increased 4.6% year-over-year on Black Friday. That compares with the 2.4% average drop in traffic that stores have experienced in 2023 overall. 

Sure, the Mastercard data measures sales while the Sensormatic data measures foot traffic—so that could explain some of the difference—but probably not all of it. 

Retail ETFs

Either way, in-store retailers don’t seem to be faring as well as their online counterparts. The SPDR S&P Retail ETF (XRT), which holds an equal-weighted basket of retailers that derive much of their sales from physical stores, was down slightly midday on Monday.  

On a year-to-date basis, e-commerce-focused ETFs are outperforming funds that have broader exposure to the retail sector. IBUY and ONLN were up 24% and 14%, respectively, while XRT and the VanEck Retail ETF (RTH) were up 7% and 13%, respectively.