NEW YORK (AP) — Stores are ramping up discounts and other incentives on Black Friday to encourage shoppers to get the best deals. But retailers worry that these may not be enough.
Consumers are under pressure as their savings dwindle and their credit card debt grows. Although they are getting some relief from easing inflation, many goods and services such as meat and rents are still much higher than they were just three years ago.
Barbara Lindquist, 85, of Hawthorne Woods, Illinois, said she and her husband plan to spend about $1,000 on holiday gifts for her three adult children, 13 grandchildren and three great-grandchildren. This is almost the same as last year.
But Lindquist, who continues to work as a preschool teacher at a local church, said she will focus more on deals as prices for meat and other basic items continue to rise. She plans to buy more gift cards, which she believes will help her stick to her budget.
“I’m choosing value,” said Lindquist, who just bought discounted sheets and towels from Kohl’s for friends who will be visiting Panama over the holidays.
Many retailers had already ordered fewer items for this holiday season and were increasing holiday sales earlier in October than last year to help shoppers spread out their spending. The early shopping push appears to be a trend that became more evident during the pandemic when blockages in the supply network in 2021 led people to buy early for fear of not getting what they wanted.
But retailers said many shoppers will focus more on deals and are more likely to wait until the last minute. Best Buy said it is pushing more items at opening price points, while Kohl’s has simplified its deals, promoting items under a certain price point such as $25 in its stores.
Target said shoppers are waiting longer to purchase items. For example, instead of buying jackets or denim in August or September, hold out until the weather turns cold.
“Consumers are clearly remarkably resilient,” Target CEO Brian Cornell told analysts last week. “However, in our research, things like uncertainty, caution, and budget management are the most important things.”
Salesforce said online sales rose 1% to about $7.5 billion year over year on Thanksgiving, as retailers offered better deals. Sales of shoes and handbags rose 11% compared to last year, followed by a 6% increase in sales of health and beauty products. Global online sales also rose 1% to $31.7 billion, according to Salesforce, which tracks data on more than 1.5 billion consumers.
Salesforce said online discount rates in the United States rose to 28% this week, compared to 21% last year, as retailers offer the best deals on clothing and health and beauty products.
the National Retail FederationThe country’s largest retail group expects shoppers to spend more this year than last, but their pace will slow given all the economic uncertainty.
The group expected holiday sales in the United States to rise by 3% to 4% during the period from November to December, compared with growth of 5.4% a year ago. This pace is consistent with the average annual increase in vacations of 3.6% from 2010 to pre-pandemic 2019. Americans have increased spending during the pandemic, with more money in their pockets from federal relief checks and no place to go during… Closure. For the 2021 holiday season, sales for the two-month period increased by 12.7%.
Online discounts should be better than they were a year ago, especially for toys, electronics and clothing, according to Adobe Analytics, which tracks online spending. Toys are expected to be discounted on average by 35%, compared to 22% a year ago, while electronics are expected to see discounts of 30%, compared to 27% last year. In apparel, shoppers will see an average discount of 25%, compared to 19% last year, Adobe said.
Analysts viewed the five-day Black Friday holiday – which includes the Monday following the holiday known as “Cyber Monday” – as a key measure of shoppers’ willingness to spend. Black Friday is again expected to 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 expected to once again account for nearly 40% of total holiday retail traffic, Sensormatic said.
Marshall Cohen, senior retail consultant at market research firm Circana, said he believes shoppers will just stick to the list and not buy impulsively. It is also believed that they will take their time buying throughout the season.
“There’s no sense of urgency,” Cohen said. “Consumers say, ‘I’ll shop when it’s convenient for me.'”
___
Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio
