Black Friday: Amazon, Best Buy website traffic shows retailers under pressure

Yahoo Finance Live’s Brian Sozzi provides his take on total web traffic for retailers amid Black Friday.

Video transcript

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JARED BLIKRE: Welcome back. It's do or die on this Black Friday for retailers, as companies are under intense pressure to deliver this holiday season after several of them reported a slowdown in sales. No surprise that Brian Sozzi's take today is retail-focused.

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BRIAN SOZZI: Yeah, I guess y'all starting to know me. Of course, I'm gonna focus on Black Friday and retail today. Pulling up some cool charts from the team over at Evercore ISI, looking at online web traffic. Now, that is overall web traffic right now that Evercore ISI tracks.

Now, as you can see, it's running below prior year levels. And an additional red flag, it's not really accelerating. You're not entering this Black Friday season with a real explosion of people going online, searching for these deals that we have been talking about. So that is just not-- just not a good chart there. Not a good chart.

But dig down even further, as Evercore did, and you can see some of the companies, some of the major online retailers also not really seeing a big acceleration. You look at Amazon's site traffic. I will note this, of course, Amazon's ticker is very hot on our platform this morning, of course, as we gear up for Black Friday but also Cyber Monday as well.

You can see even Amazon net, getting that big thrust into Black Friday. I think that shows that the consumer remains very, very cautious. That they're going to wait for that absolute salivating type of deal. And if they don't get it, they're just not buying this junk.

Next up is Best Buy. Another one I'm gonna flag here from this report. This is not-- this is probably-- Best Buy not showing that at all really any acceleration in online shopping based on their web scrapes that Evercore ISI did.

Now, this fits with what we heard from Best Buy last week, that sales-- same-store sales in North America are running down 15% ahead of Black Friday. That is just an alarming, alarming decrease for a company that has a lot-- still has a lot of inventory to clear out at the same time they're out there really promoting and giving a lot of promotions very aggressively.

My take is this, just staying on Best Buy. No shocker here. Best Buy's holiday season may never arrive. And there's the return of the Sozz Grinch right there just chilling, enjoying his Black Friday looking for gifts on a discount probably at Best Buy. To start Black Friday-- to start your holiday season if you're a Best Buy with sales running down 15%, it's huge. I mean, it's just hugely bad. And to me, it suggests that is a earnings warning waiting to happen come the first week in January.

JARED BLIKRE: Yeah, well, I-- we'll get to the earnings in a second here. I just wanted to note, we've been talking about some of the data that's coming out. Now, let me ask you, because I've read this a couple of years ago. The biggest shopping day of the year typically not even associated with Black Friday or Thanksgiving, that week. And it's simply the Saturday and Sunday before Christmas.

Now, that would be this year in a few weeks. I think Christmas comes on a Saturday or Sunday. So is it possible that people are simply delaying all their purchases and we're gonna see a blockbuster-- at least in terms of nominal sales, whereas the margins are depressed because of the discounting?

BRIAN SOZZI: Hell of a point, Jared. That's why you're here. And that is a good point that, you know, it will-- theoretically, it should help retailers that the holiday season or Christmas falls on the weekend. But by then, you know, what you see now, 30% to 40% off discounts at a Banana Republic, an Abercrombie & Fitch, or Walmart and Target, by then it might be 60% to 70% off depending on what category it is. And then even if you move enough volume, you still think that margins will come in very underwhelming.

JARED BLIKRE: Pre-announcement, this is what I want to get-- what I wanted to get to. Disappointments on the earnings front generally are broadcast by companies before the earnings date. Not always. What are your feelings on this? Any companies in your crosshairs besides Best Buy?

BRIAN SOZZI: Usually that those first two weeks in January, usually after the peak holiday season, that's when you'll get a lot of warnings or positive pre-announcements. There will be winners this holiday season. You look at Walmart. I would not be shocked if they come out and maybe lift guidance early on in January.

Also second thing to watch, this is going to be a holiday season where there's going to be very distinctive winners and losers. And you might see more store closures announced in January. We're talking about Bed Bath & Beyond in that "Journal" story this morning. That is one retailer that's probably gonna to close hundreds of more stores.

JARED BLIKRE: Yeah, I'm-- let's pull up the YFi Interactive. I'm gonna pull up our retail landscape here, our heat map. So this is what's going on today. You can see more red than green. The red concentrated also among some of those mega caps. And for comparison, here's what's happened year-to-date.

And you can see, Brian, this bifurcated market. I've been showing this compared to the one month a lot. So you can see at the top of the screen we have BJ's, Ulta, DG, that's Dollar General, Kroger, TJX, Dollar Tree. At the bottom is where you find a lot of these electronic retailers-- Amazon down here 44%. Shopify, excuse my highlighting here. Wayfair down 82%.

Over the last month, though, a lot of these electronic retailers, they've also suffered. So Amazon down there at the bottom of the pack, down 22%. Although you take a look at American Eagle Outfitters up 44%. Let me just show year-to-date. So you can really see the rise. This is impressive. A lot of stocks haven't been able to take out their midyear highs. Some of these guys have.

BRIAN SOZZI: Yeah, I love watching these retail stocks intraday on Black Friday. That was an interesting chart you just threw up there. You're seeing a lot of weakness, as I think investors see that the crowds are not where they're supposed to be. And then, of course, those Adobe numbers coming up, I would say very disappointing. At least in the early going. The next report from Adobe will be at 6:30 tonight.