NEW YORK (AP) – Shoppers hunted for the best deals in stores and online as retailers offered new Black Friday discounts to lure consumers eager to start buying Christmas gifts but weighed down by inflation.
Due to increased prices of food, rent, gas and other essentials, many people were reluctant to spend unless there was a big sale.
Shoppers were more selective, choosing cheaper options, dipping more into savings and turning to “buy now, pay later” services that allow payment in installments. Some also ran up their credit cards at a time when the Federal Reserve is raising interest rates to cool the US economy.
Sheila Diggs, 55, went to a Walmart in Mount Airy, Maryland, early Friday looking for a deal on a coffee maker and to see what else was in the aisles. She said her family is being more careful with their holiday spending this year. Usually all the adults in the family exchanged gifts. But this year, everyone draws names and selects one person, because things cost so much more, she said.
“Everything goes up, except your paycheck,” said Diggs, who manages medical records at a local hospital.
This year’s trends are a contrast from a year ago, when consumers bought early for fear of not getting what they needed in the middle of the supply network. Stores didn’t have to discount much because they were struggling to get stock.
This year, shoppers are holding out for the best deals, said Rob Garf, vice president and general manager of retail at Salesforce, which tracks online sales. He said retailers finally responded this week, introducing more attractive offers online after offering mostly meager discounts earlier in the season.
Online discount rates were 31% on Thanksgiving, up 7% from a year earlier, according to Salesforce data. The heaviest discounts were in home appliances, casual clothing, makeup and luxury handbags. Online sales during the holiday season increased by 9% compared to last year.
“Retailers have finally stepped up the discount game and consumers are responding in kind,” Garf said.
Macy’s Herald Square in Manhattan, where discounts included 60% off fashion jewelry and 50% off select shoes, was bustling with shoppers early Friday.
Traffic was “significantly greater” on Black Friday compared to the previous two years because shoppers feel more comfortable in crowds, Macy’s CEO Jeff Gennette said.
He said bestsellers from Macy’s online sale, which started last weekend, included 50% off beauty kits. Last year, Macy’s, like many other stores, had problems with the supply chain, and some of the gifts did not arrive until after Christmas.
“Right now we’re set and ready to go,” he said.
Sophia Rose, 40, a respiratory specialist visiting Manhattan from Albany, New York, was heading into Macy’s with big plans to splurge after throwing up last year when she was still in school. She budgeted herself for food and gas to keep up with inflation, but had already spent $2,000 on holiday gifts and plans to spend a total of $6,000.
“I want to touch every floor,” she said. “That’s the plan.”
A Best Buy store in Manhattan had TVs stacked high, including Samsung 50-inch TVs marked down to $297, a savings of $82.
Delmarie Quinones, a 30-year-old healthcare aide from the Bronx, was only there to pick up a laptop and printer she ordered online for $179 — down from $379 — as part of a Black Friday sale.
Quinones said higher prices for food and other expenses are causing her to reduce her spending from a year ago, when she had money from government child tax payments.
“I can’t get what I used to get,” said the mother of five children, ages 1 to 13. “Even when it was back in school, it was hard to get them what they needed.”
Major retailers, including Walmart and Target, stuck to their pandemic-era decision to close stores on Thanksgiving Day, moving away from doorbusters and instead pushing discounts on their websites.
But people still shop on Thanksgiving — online. Garf said online sales spiked in the evenings during the holiday, suggesting people switched from partying to phone shopping. And with holiday trips upHe said a greater share of online shopping took place on mobile devices this year.
“The mobile phone has become the remote control of our daily lives, and this led to an increase in couch shopping as consumers settled down after Thanksgiving dinner,” Garf said.
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 brisk 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 8.6% last year, when shoppers were hesitant to return 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.
Hadero reported from Mount Airy, Maryland. Olson reported from Arlington, Virginia. Associated Press Personal Finance writer Cora Lewis in New York contributed to this report.
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