NEW YORK (AP) – Although Black Friday will mark a return to familiar Christmas shopping patterns, uncertainty remains.
The US labor market remains strong, consumer spending is robust and inflation has been slowing. But increased prices for food, rent, gas and other household costs have taken a toll on customers.
As a result, many are reluctant to spend unless there’s a big sale, and are more selective about what they want to buy – in many cases, it comes down to cheaper items and cheaper stores.
Shoppers are also dipping deeper into their savings and increasingly moving to “buy now, pay later” services like Afterpay, which allow users to pay for items in installments, as well as run up their credit cards at a time when the Federal Reserve is raising interest rates to cool the US economy.
Such financial difficulties can help drive customers to look for bargains.
Isela Dalencia, who was shopping for household items like laundry detergent at a Walmart in Secaucus, New Jersey, earlier this week, said she is putting off buying Christmas gifts until Cyber Monday — the Monday after Thanksgiving — when online sales surge. Then she will wait again 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 begin 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 prices of food and other household expenses.
“The money doesn’t go as far as last year,” Leach said.
This year’s trends are a contrast from a year ago, when consumers bought early for fear of not getting what they needed amid gridlock. Stores didn’t have to discount much because they were struggling to get stock.
But some pandemic habits persist. Many retailers that closed stores on Thanksgiving Day and instead pushed discounts on their websites to thin out in-store crowds are still sticking to those strategies, despite a return to normalcy.
Major retailers, including Walmart and Target, are once again closing their stores on Thanksgiving. And many moved away from doorbusters, the deeply marked-down items offered for a limited time that drew crowds. Instead, the discounted items are available throughout the month, on Black Friday or during 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 blistering 13.5% growth a year ago. However, these figures, which include online spending, are not adjusted for inflation, so real spending may even be down from 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 unsure about returning to brick-and-mortar 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 represents about 20% of the retail industry’s annual sales.
While Black Friday still holds a strong place in the United States among shoppers, it has lost ground over the past decade as stores opened on Thanksgiving and shopping moved to Amazon and other online retailers. Stores have further diluted the day’s status by promoting Black Friday sales throughout the month. This year, stores started selling earlier than last year to get customers to spread out their purchases.
Lots of shoppers like Lolita Cordero of Brooklyn, New York, sit out Black Friday.
“I shop early, try to get 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.”
Still, some experts believe Black Friday will once again be the busiest shopping day of the year, according to Sensormatic, which tracks customer traffic. Consumers are also back to shopping in brick-and-mortar stores because they reduce concerns about COVID-19. In fact, more stores opened than closed in the U.S. last year for the first time since 2016 — and that gap has only widened 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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