Expect deep discounts and other incentives to attract shoppers to stores for Black Friday. But retailers fear that won’t be enough.
Consumers are under pressure as their savings dwindle and their credit card debt rises. And although they have received some relief from falling inflation, many goods and services like meat and rent are still much higher than they were just three years ago. years.
Barbara Lindquist, 85, of Hawthorne Woods, Ill., said she and her husband plan to spend about $1,000 on holiday gifts for her three adult children, 13 grandchildren and three great-grandchildren. children. It’s pretty much the same as last year.
But Lindquist, who continues to work as a kindergarten teacher at a local church, said she will focus more on bargains given the still high prices of meat and other staples. And she plans to buy more gift cards, which she says will help her stay on budget.
“I’m all about value for money,” said Lindquist, who just purchased discounted sheets and towels at Kohl’s for friends who will be visiting from Panama for the vacation.
Many retailers had already ordered fewer products this holiday season and pushed holiday sales earlier in October than last year to help shoppers spread their spending. The early buying trend appears to be one that has only grown more pronounced during the pandemic, when supply network obstructions in 2021 caused people to buy early for fear of not getting what they wanted .
But retailers said many shoppers will focus more on bargains and likely wait until the last minute. Best buy said it was offering more items at opening prices, while Kohl’s simplified its offerings, promoting items below a certain price, like $25, in its stores.
Target said shoppers are waiting longer to purchase items. For example, instead of buying sweatshirts or jeans in August or September, they held out until the weather got colder.
“It’s clear that consumers have been remarkably resilient,” Target CEO Brian Cornell told analysts last week. “Yet in our research, things like uncertainty, prudence, and managing a budget are at the forefront of our minds.”
THE National Retail Federationthe nation’s largest retail group, expects shoppers to spend more this year than last, but their pace will slow given all the economic uncertainty.
The group expects U.S. holiday sales to increase 3% to 4% from November to December, compared with 5.4% growth a year ago. This pace is consistent with the average annual vacation increase of 3.6% between 2010 and 2019, before the pandemic. Americans have increased their spending during the pandemic, with more money in their pockets thanks to federal relief checks and nowhere to go during lockdowns. For the 2021 holiday season, sales over the two-month period jumped 12.7%.
Online discounts expected to be better than a year ago, especially on toys, electronics and clothing, according to Adobe Analytics, which tracks online spending. It predicts that toys will see an average reduction of 35%, compared to 22% a year ago, while electronics are expected to see reductions of 30%, compared to 27% last year. In apparel, shoppers will receive an average discount of 25%, up from 19% last year, Adobe said.
Analysts view the five-day Black Friday weekend – which includes the Monday following the holiday known as Cyber Monday – as a key barometer of shoppers’ willingness to spend. And Black Friday is once again expected to be the busiest shopping day of the year, according to Sensormatic Solutions, a company that tracks store traffic. On average, the 10 busiest shopping days in the U.S. are again expected to account for about 40% of all holiday retail traffic, Sensormatic said.
Marshal Cohen, chief retail advisor at Circana, a market research firm, said he believes shoppers will be content to stick to a list and not buy on impulse. He also thinks they will take their time purchasing throughout the season.
“There’s no sense of urgency,” Cohen said. “Consumers are saying, ‘I’ll shop when it’s convenient for me.’ »