Name: Lasser: Apparel, electronics, toys leading holiday demand
Uploaded: 2025-12-17T17:36:24.847Z
Duration: 3 min 31 s
Description: Michael Lasser, Senior Research Analyst at UBS, says holiday retail demand is steady with sales up about 4%, consumers are chasing deals across key categories, AI is starting to shape shopping behavior, and tax refunds could support spending in early 2026.

Michael Lasser, Senior Research Analyst at UBS, says holiday retail demand is steady with sales up about 4%, consumers are chasing deals across key categories, AI is starting to shape shopping behavior, and tax refunds could support spending in early 2026.

Retail sales during the holiday season have seen a 4% increase compared to the previous year, with strong demand in categories such as apparel, consumer electronics, and toys. Major retailers like Walmart have reported sales in line with expectations, and over 200 million American shoppers took advantage of deals from Thanksgiving through Cyber Monday.

Consumers are increasingly using AI tools to assist with shopping decisions, though the technology's impact remains limited for now. Looking ahead, tax refunds expected in the first quarter of the year may further boost spending, particularly on big-ticket items and essential services like auto repairs.

Lasser: Apparel, electronics, toys leading holiday demand

We were talking thousands of people there, by the way. So a lot of people looking to take advantage of deals. What is the environment right now when we're looking at holiday shopping? Are we seeing sales going into this last week ahead of Christmas? Or are retailers, are they holding on to price? So Frank, the overall environment is pretty steady through Black Friday. There was about a 4% increase in retail sales versus the prior year. Some retailers indicated that they saw pretty good trends. For example, Walmart noted that it was in line with its expectations. You are absolutely right that this is an important last week. There's about seven days ahead of the holiday. And we expect this to be a very big holiday shopping weekend. There are some sales out there, so consumers are going to be able to find good deals. With that being said, this is going to be an important weekend and going to really have a strong influence over the course of the week, the course of the holiday season. All right, so again, 203 million American shoppers took advantage of deals from Thanksgiving through Cyber Monday. I want to clarify that one. When we're looking at where people are spending, are they spending on apparel? Are they spending on specialty items? Are they spending on beauty? Are they spending on furniture? Where is the money going? The categories that are strong right now include apparel, consumer electronics, toys, really across many different areas of retail. But the consumer is being very choiceful, seeking good deals, shopping at discounters like Walmart, Costco, and others, and concentrating their spend during those times when the retailers are offering sales. So we would expect the same throughout the rest of the season. You know, during the holiday season, we got a lot of data points about people using AI or gentic AI for shopping. What impact does that really have? Does it change what people buy, where they shop, how much they spend in a meaningful way? Right now it's early. Consumers are using these tools to seek out products that they're interested in, gain information, help understand the features and benefits of products. Over time, these technologies are gonna be more instrumental in not only assisting consumers in what they should buy, but they're actually gonna help make the purchase. So right now it's early, but every passing day, this technology is gonna have more of an influence. All right, so you're pretty bullish on the holiday season, I should say. What about after that? We just saw some weakness in the labor market and employment rate ticking up yesterday in that report. Secretary Scott Besson's come out and saying Americans are gonna get about 100 to 150 billion dollars in their tax refunds coming up in Q1. Do they spend that in retail? And if so, what areas do you think they spend it? The marginal propensity to consume tax refunds is pretty high. So we would expect big ticket purchases would benefit as consumers see a distribution of cash and tax refunds in areas like consumer electronics, home improvement, which is an area that the stocks that we like, Home Depot and Lowe's right now. Beyond that, we would expect that some of the basics like auto repairs will see a benefit from larger tax refunds, especially as those lower and moderate income consumers tend to spend any sort of infusion of cash that they get. So we do think that that's gonna provide a lift once we get past the holiday season.

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