Holiday shopping begins with inflation dampening spirits

NEW YORK (AP) – While Black Friday will mark a return to familiar holiday shopping patterns, uncertainty remains.

The US job market remains strong, consumer spending is resilient and inflation is slowing. But rising prices for food, rent, gasoline and other household expenses have weighed on shoppers.

As a result, many are reluctant to spend money unless there’s a big sale and are more selective about what they buy — often, trading down to cheaper items and cheaper stores.

Shoppers are also dipping deeper into their savings, turning more to “buy now, pay later” services such as Afterpay which allow users to pay for items in instalments, as well as running up their credit cards at a time when the Federal Reserve is raising rates. to cool the US economy.

Such financial hardship may help drive shoppers to seek out bargains.

Isela Dalencia, who was shopping for household essentials like detergent at a Walmart in Secaucus, New Jersey, earlier this week said she is delaying buying holiday gifts until Cyber ​​​​​​Monday – the Monday in after Thanksgiving – when online sales will be taking off. Then, she will again wait until the week before Christmas to get the best deals, unlike last year when she started buying before Black Friday.

“I’m shopping less,” Dalencia said, noting that she will spend about $700 on holiday gifts this year, one-third less than last year.

Katie Leach, a social worker in Manhattan, was also browsing the aisles at Walmart but said she will start her holiday shopping during the first week of December as usual. This time, however, she will rely more on bargains, her credit card and “buy now, pay later” services to get her through the shopping season due to rising food prices and other household costs.

“The money is not going as far as last year,” Leach said.

This year’s trends contrast with a year ago when consumers were buying early and fearing they wouldn’t find what they needed among clocks in the supply network. Shops didn’t have to discount much because they had difficulties bringing in goods.

But some pandemic habits are sticking to it. Many retailers that closed stores on Thanksgiving and instead pushed discounts on their websites to reduce in-store crowds are still sticking to those strategies, despite the return to normality.

Major retailers including Walmart and Target are closing their stores again on Thanksgiving. And many of them switched from doorbusters, the deeply marked down items offered for a limited time that drew the crowds. Instead, the discounted items are available throughout the month, on Black Friday or on holiday weekends.

Against today’s economic backdrop, the National Retail Federation — the largest retail trade group — expects holiday sales growth to slow to a 6% to 8% range, from a blistering 13.5% growth a year ago. However, these figures, which include online spending, are not adjusted for inflation so actual spending may be lower than a year ago.

Adobe Analytics expects online sales to be up 2.5% from Nov. 1 to Dec. 31, a slowdown from last year’s 8.6% pace when shoppers were uncertain about returning to physical stores.

Analysts consider the five-day Black Friday weekend, which includes Cyber ​​Monday, a key barometer of shoppers’ willingness to spend, especially 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 place among shoppers in the United States, 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 the status of the day by promoting Black Friday sales throughout the month. This year, stores started selling earlier than last year to give shoppers a chance to spread out their purchases.

Many shoppers like Lolita Cordero of Brooklyn, New York, are sitting out Black Friday.

“I’m shopping early, looking for things on sale, discount or clearance — and I use coupons,” Cordero said. “I’ve never done Black Friday. I hear it’s a mess, and people get hurt.”

However, some experts believe Black Friday will be the busiest shopping day again this year, according to Sensormatic, which tracks customer traffic. Consumers are also back shopping at brick-and-mortar stores amid easing concerns about COVID-19. In fact, more stores opened than closed in the US last year for the first time since 2016 — and that gap is only widening this year, according to Coresight Research, a retail consulting and research firm.

_____

AP Personal Finance writer Cora Lewis contributed to this report.

____

Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio

Leave a Reply

Your email address will not be published.