Walmart, other US retailers import fewer Christmas goods ahead of tepid holiday season

Santa Claus is not delivering as many Christmas trees, toys and decorations to the United States this year as in recent years, import data shows, with retailers including Walmart bringing in less holiday product ahead of what is expected to be a so-so holiday season.

Walmart, the world's biggest retailer, has slashed Christmas imports deeply, shipping at least 340,000 kilos of products described as "Christmas" goods into the U.S. in the 12 months ending Sept. 30, according to U.S. import data provided exclusively to Reuters by ImportYeti.  

The retailer shipped in almost three times more product, at least 980,000 kilos, in the prior 12 months through Sept. 30, 2023, the import data shows. In the same 12 months of 2022, Walmart imported more than 1.9 million kilos of Christmas products, from reindeer ornaments to Grinch plush toys. 

A Walmart spokesperson said that bill of lading data "only paints a partial picture of what we source due to the exclusion of data from marketplace, national brands, and domestic importer data for private brands, among other things." The retailer's executives will provide their holiday season outlook when the company reports third-quarter results on Nov. 19.

Walmart investor Sizemore Capital Management said Walmart routinely scrutinizes data on shoppers' spending patterns, including credit-card data. "They have done the research on their consumer. And what they have concluded is that the holiday season is not going to be as strong," said Charles Sizemore, chief investment officer at the firm.

Although the holiday-product import data does not count electronics, clothing or other general merchandise, what it shows "is pretty obvious," he added. "If Walmart is ordering less, they are expecting sales to be tepid." 

Retailers are "predicting a smaller sales increase this holiday than we saw last year," said Gerald Storch, retail consultant and former Target vice chairman and ex-CEO of Hudson's Bay. 

"Consumers are stretched with less money left for discretionary purchases," he said. While total U.S. consumer spending is up, "some commentators keep confusing total consumer spending (including necessities like housing or healthcare) with discretionary spending."

U.S. retail sales increased in September, supporting the view that the economy maintained a strong growth pace in the third quarter. 

D.A. Davidson analyst Linda Bolton Weiser said the consumer environment this year is "far from robust" and that Walmart's average price point for toys is at $40.16 this season, 10% lower than last year. 

All U.S. companies - including retailers Walmart, Dollar General and other stores - shipped in about the same amount of Christmas-related products by weight this year as in 2023, and at least 20% less by weight versus 2022, according to ImportYeti.  

In the 12 months to Sept. 30, 2024, U.S. companies imported about 141 million kilos' worth of product described as "Christmas" items in bills of lading - filings that companies must submit when imports are brought in to the country. 

In the same period in 2022, companies imported about 180 million kilos of Christmas goods, or 22% more than this year. 

The U.S. National Retail Federation, which is chaired by Walmart's top U.S. executive, John Furner, said in October that holiday spending in the last two months of the year was expected to grow by only 2.5-3.5% versus last year, the slowest rate of growth since 2018 when holiday sales rose 1.8%. U.S. retailers are also expected to hire fewer seasonal workers during the holiday months than last year.

Retailers typically order Christmas imports several months in advance and they arrive in the United States through the year.

  Major retailers including Walmart want to avoid being stuck with excess merchandise as happened during the two most recent holiday periods. Having too much inventory is an extremely costly scenario that is perceived as bad news by investors in retail companies.  

Retailers, which typically purchase merchandise wholesale from third-party vendors and suppliers, "remain cautious with their ordering to maintain lean inventories and not have to clear excess goods through incremental discounting," said Dana Telsey, an analyst at Telsey Advisory Group.  

To be sure, import filings reflect only what retailers are bringing in to the U.S. Retailers also source merchandise from local vendors and domestic importers. 

Craig Johnson, president of retail consultancy Customer Growth Partners, said it was difficult to draw conclusions from the holiday merchandise import data. "Fewer Christmas decoration and toy imports does not necessarily imply a slow season," Johnson said. He expects U.S. holiday sales to rise 4% this year, a slower pace than last year's 4.1% sales growth.