The takeaway from the past few days is that U.S. consumers are spending at unprecedented levels, and the overwhelming majority of that growth—if not all of it—is online.

(Bloomberg)—The initial Black Friday results have reinforced that this U.S. holiday shopping season will be one of the best in recent memory. But even in good times, there are concerns for retailers.

The takeaway from the past few days is that U.S. consumers are spending at unprecedented levels, and the overwhelming majority of that growth—if not all of it—is online. While bricks-and-mortar chains can rightfully claim their stores help boost web sales by giving shoppers a chance to see products in person, the web sales are less profitable.

“Stores have been gaining more traction, but online is growing faster,” said Poonam Goyal, an analyst for Bloomberg Intelligence. “The higher shipping expenses are still going to be a bigger drag on margin.”

The shift online means chains have to spend more on already-elevated shipping costs, which will eat into profit margins, she said. On top of this, many retailers now offer free or reduced rates for mailing packages during November and December, which only exacerbates the hit to results.

The added complexity and reduced profitability is hanging over this holiday season that, while expected to be a blockbuster, is also seen as possibly the last standout Christmas of the current economic cycle. Investors started souring on retail stocks earlier this month amid concern that the consumer-spending environment could be at the peak of the mountain and will soon be followed by decline.

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Americans spent $50.6 billion online this month through Sunday, a 20% increase from a year ago and spearheaded by a 24% surge to $6.2 billion on Black Friday, according to Adobe Analytics. Cyber Monday is expected to add another $7.9 billion—a 20% year-over-year gain for that day.

Overall, physical stores had a disappointing four-day period with visits down 6.6%, according to retail analytics firm RetailNext. But not all bricks-and-mortar chains and categories are created equal. For example, sales of electronics and appliances rose 6.4% over the weekend, according to Customer Growth Partners. The researcher reiterated its forecast for holiday sales overall to grow 5.1% to $701 billion.

Most retail stocks reacted positively on Monday, with the SPDR S&P Retail ETF rising 2%, more than the S&P 500 Index’s climb of 1.6%. GameStop Corp. (No. 40 in the Internet Retailer 2018 Top 500) and Victoria’s Secret owner L Brands Inc. (No. 26) led the way.

The extra expense of e-commerce comes on top of the industry’s traditional holiday challenge of balancing door-buster deals with profitability. So far, discounting levels appear to be similar to last year, according to Jefferies Financial Group, although price cuts were deeper for some categories such as toys.

“Shoppers and stores alike will have a happy holiday this year–assuming retailers can maintain their margin discipline,” said Craig Johnson, president of Customer Growth Partners. “Looking forward, the key issue is whether this pace can be sustained into the new year and beyond.”

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