NEW YORK (AP) — While Black Friday will mark a return to familiar holiday shopping patterns, uncertainty still lingers.
The US labor market remains strong, consumer spending is resilient and inflation is slowing. But increased prices for food, rent, gas and other household costs have taken a toll on shoppers.
As a result, many are reluctant to spend unless there is a big sale and are more selective in what they buy – in many cases switching to cheaper goods and cheaper stores.
Shoppers are also dipping deeper into their savings and increasingly turning to “buy now, pay later” services like Afterpay, which allow users to pay for items in installments, as well as top up their credit cards at a time when the Federal Reserve is raising rates to cool the US economy.
Such financial distress could help drive shoppers to look for bargains.
Isela Dalencia, who was shopping for household essentials such as laundry detergent at Walmart in Secaucus, New Jersey earlier this week, said she was putting off buying Christmas gifts until Cyber Monday — the Monday after Thanksgiving — when online sales surge. She will then again wait until the week before Christmas to get the best deals, unlike last year when she started shopping before Black Friday.
“I’m shopping less,” Dalencia said, noting that she will spend about $700 on Christmas gifts this year, a third less than last year.
Katie Leach, a social worker in Manhattan, also browsed the aisles at Walmart, but said she will start shopping during the first week of December as usual. But this time, she’ll be relying more on bargains, her credit card and buy-now-pay-later services to see her through the shopping season due to soaring food prices and other household expenses.
“The money doesn’t go as far as it did last year,” Leach said.
This year’s trends contrast with a year ago, when consumers shopped early for fear of not getting what they needed amid congested supplies in the supply chain. Stores didn’t have to discount much because they were trying to bring in the goods.
However, some pandemic habits persist. Many retailers that closed stores on Thanksgiving and instead pushed discounts on their websites to thin out in-store crowds are still sticking to those strategies, despite the return to normalcy.
Major retailers including Walmart and Target are once again closing their stores for Thanksgiving. And many moved away from the door, deeply marked-up items offered for a limited time that drew crowds. Instead, discounted items are available throughout the month, on Black Friday or on a holiday weekend.
In today’s economic context, the National Retail Federation — the largest retail group — expects holiday sales growth to slow to 6% to 8% from a roaring 13.5% growth a year ago. However, these figures, which include online spending, are not adjusted for inflation, so real spending may even be lower than a year ago.
Adobe Analytics expects online sales to rise 2.5% from Nov. 1 to Dec. 31, a slowdown from last year’s 8.6% pace, when shoppers were uncertain about returning to brick-and-mortar stores.
Analysts see the five-day Black Friday weekend, which includes Cyber Monday, as a key barometer of shoppers’ willingness to spend, especially this year. The two-month period between Thanksgiving and Christmas accounts for about 20% of annual retail sales.
While Black Friday still has a strong place among shoppers in the U.S., it has lost ground over the past decade as stores opened on Thanksgiving and shopping shifted to Amazon and other online retailers. Stores further diluted today’s status by promoting Black Friday sales throughout the month. Stores started sales earlier this year than last year to allow customers to spread out their purchases.
Lots of shoppers like Lolita Cordero of Brooklyn, New York sit out Black Friday.
“I shop early, I try to get things on sale, on sale or on sale — and I use coupons,” Cordero said. “I’ve never done Black Friday. I hear it’s a mess and people are getting hurt.’
Still, some experts believe Black Friday will be the busiest shopping day again this year, according to Sensormatic, which tracks customer traffic. Consumers are also returning to brick-and-mortar shopping amid easing concerns about COVID-19. In fact, more stores opened than closed in the U.S. last year for the first time since 2016 — and the gap is widening this year, according to Coresight Research, a retail consulting and research firm.
AP Personal Finance Writer Cora Lewis contributed to this report.
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