Retailers offer big deals for Black Friday but will shoppers spend?
NEW YORK — Expect big discounts and other enticements to draw shoppers into stores for Black Friday. But retailers fear this won’t be enough.
Consumers are coming under pressure as their savings dwindle and their credit card debt grows. And while they have gotten some relief from declining inflation, many goods and services, such as meat and rent, are still much higher than they were just three years ago.
Barbara Lindquist, 85, of Hawthorne Woods, Ill., said she and her husband plan to spend about $1,000 on Christmas gifts for her three adult children, 13 grandchildren and three great-grandchildren. That’s about 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 deals given the still high prices for meat and other staples. And she plans to buy more gift cards, which she says will help her stay within her budget.
“I go for value,” says Lindquist, who just picked up discounted sheets and towels at Kohl’s for friends visiting from Panama for the holidays.
Many retailers had already ordered fewer goods for the holidays and stepped up Christmas sales earlier in October than last year to help shoppers spread their spending. Early buying appears to be a trend that only became more apparent during the pandemic, as supply network issues in 2021 pushed people to buy early for fear of not getting what they wanted.
But retailers say many shoppers will focus more on deals and likely wait until the last minute. Best Buy said it is pushing more items at opening prices, while Kohl’s has simplified its deals by promoting items below a certain price point, such as $25, in its stores.
Target said shoppers are waiting longer to purchase items. For example, instead of buying sweatshirts or denim in August or September, they held out until the weather turned cold.
“It’s clear that consumers have been remarkably resilient,” Target CEO Brian Cornell told analysts last week. “Yet in our research, issues such as uncertainty, caution and managing a budget are paramount.”
The National Retail Federation, the nation’s largest retail group, expects consumers will spend more this year than last, but that pace will slow given all the economic uncertainty.
The group has forecast U.S. holiday sales to rise 3% to 4% from November through December, compared with 5.4% growth a year ago. The pace matches the average annual holiday increase of 3.6% between 2010 and 2019 before the pandemic. Americans have ramped up their spending during the pandemic, with more money in their pockets from federal relief checks and nowhere to go during the lockdowns. For the 2021 holiday season, sales for the two-month period increased 12.7%.
Online discounts should be better than a year ago, especially for toys, electronics and clothing, according to Adobe Analytics, which tracks online spending. It predicts toys will be marked down by an average of 35%, compared to 22% a year ago, while electronics should see a 30% discount, compared to last year’s 27%. On clothing, shoppers will see an average discount of 25%, compared to 19% last year, Adobe said.
Analysts consider the five-day Black Friday weekend – including the Monday after the holiday known as Cyber Monday – to be a key barometer of consumers’ willingness to spend money. And Black Friday is expected to once again 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 shopping traffic, according to Sensormatic.
Marshal Cohen, chief retail consultant at Circana, a market research firm, said he thinks consumers will simply stick to a list and not buy impulsively. He also believes they will take the entire season to buy.
“There is no sense of urgency,” Cohen said. “Consumers say, ‘I go shopping when it suits me.’”
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