NEW YORK (AP) — While Black Friday will mark a return to familiar holiday shopping habits, uncertainty remains.
The US job market remains strong, consumer spending is resilient and inflation is slowing. But rising prices for food, rent, gas and other household expenses have weighed on shoppers.
As a result, many are reluctant to spend unless it’s a big sale and are more picky about what to buy – in most cases, they gravitate towards cheaper items and cheaper stores.
Shoppers are also investing more in their savings and are increasingly turning to ‘buy now, pay later’. Services like Afterpay, which allows users to pay in installments for products and runs credit cards at a time when the Federal Reserve is raising interest rates to cool the US economy.
Such financial difficulties may lead shoppers to seek bargains.
Isela Dalencia, who shopped for essentials like detergent at a Walmart in Secaucus, New Jersey earlier this week, said she’s postponing holiday gifts until Cyber Monday, the Monday after Thanksgiving, when online sales pick up speed. Then it will again wait until the week before Christmas to get the best deals, unlike last year when it started buying before Black Friday.
“I shop less,” Dalencia said, noting that she will spend about $700 on holiday gifts this year, a third less than last year.
Katie Leach, a Manhattan social worker, was also browsing the aisles at Walmart, but said she’d start her holiday shopping, as usual, in the first week of December. This time, however, it will rely more on bargains, credit cards and “buy now, pay later” services to get through the shopping season as prices rise on food and other household expenses.
“The money isn’t going as far as last year,” Leach said.
This year’s trends contrast with the trend a year ago, where consumers buy early for fear of not getting what they need due to supply network bottlenecks. The stores didn’t have to give much discount because they had a hard time bringing the products.
However, some pandemic habits continue. Many retailers that close their stores on Thanksgiving and instead push discounts on their websites to reduce the in-store crowd are still pursuing these strategies despite the return to normal.
Major retailers, including Walmart and Target, are closing their stores again on Thanksgiving. And many have turned away from the gatekeepers, the deeply marked products offered for a limited time, that draw the crowds. Instead, discounted items are available throughout the month, on Black Friday, or on the holiday weekend.
Against today’s economic backdrop, the National Retail Federation, the largest retail trade group, expects holiday sales growth to slow to a range of 6% to 8%, from a staggering 13.5% growth a year ago. However, these figures, which include online spending, are not adjusted for inflation, so actual spending may even be lower than a year ago.
Adobe Analytics expects online sales to increase 2.5% from November 1 to December 31; That’s a slowdown compared to last year’s 8.6% pace, when shoppers were hesitant to return to physical stores.
Analysts are especially looking at the five-day Black Friday weekend, which includes Cyber Monday, a key barometer of shoppers’ willingness to spend this year. The two-month period between Thanksgiving and Christmas accounts for about 20% of the retail industry’s annual sales.
While Black Friday still holds a strong hold among US shoppers, it has lost its credibility over the past decade as stores open on Thanksgiving and shopping has shifted to Amazon and other online retailers. Stores further diluted the state of the day by promoting Black Friday sales throughout the month. This year, stores started sales earlier than last year to allow shoppers to spread their shopping.
Lots of customers like Lolita Cordero from Brooklyn, New York, sit down on Black Friday.
“I shop early, try to get things on sale, on sale, or on sale — and use coupons,” Cordero said. “I’ve never had Black Friday. I heard there was a mess and people got hurt.”
Still, some experts believe Black Friday will again be the busiest shopping day this year, according to Sensormatic, which tracks customer traffic. Consumers have also returned to shopping in physical stores as concerns about COVID-19 eased. In fact, according to Coresight Research, a retail consulting and research firm, for the first time since 2016 more stores opened in the US than closed last year, and that gap is opening even more this year.
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Cora Lewis, AP Personal Finance Author, contributed to this report.
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