NEW YORK (AP) — While Black Friday will mark a return to familiar holiday shopping patterns, uncertainty still remains.
The US labor market remains strong, consumer spending is resilient and inflation is slowing. But high prices for food, rent, gasoline and other household costs have taken a toll on buyers.
As a result, many are reluctant to spend unless there’s a big sale and are more selective with what they’ll buy — in many cases, swapping for cheaper stuff and less expensive stores.
Shoppers are also dipping into their savings more, turning increasingly to “buy now, pay later” services like Afterpay that allow users to pay for items in installments, as well as upgrading their credit cards at a time when the Federal Reserve is raising rates to cool the US economy.
Such financial hardships could help prompt buyers to look for deals.
Isela Dalencia, who earlier this week was shopping for household items like laundry detergent at a Walmart in Secaucus, New Jersey, said she is delaying holiday gift shopping until Cyber Monday, the Monday after Thanksgiving when online sales pick up. So, she will still wait 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’ll be spending about $700 on Christmas gifts this year, a third less than last year.
Katie Leach, a social worker in Manhattan, was also browsing the aisles of Walmart, but she said she will start her Christmas shopping during the first week of December as usual. This time, however, she’ll rely more on bargains, her credit card, and “buy now, pay later” services to get through the shopping season due to rising food prices and other household expenses.
“The money won’t come until last year,” Leach said.
This year’s trends contrast with a year ago, when consumers bought early out of fear of not getting what they needed due to bottlenecks in the supply chain. The shops didn’t have to discount much as they were struggling to carry the items.
But some pandemic habits persist. Many retailers that closed stores on Thanksgiving and instead pushed discounts on their websites to thin out store crowds are still sticking to those strategies, despite a return to normal.
Major retailers, including Walmart and Target, are once again closing their stores on Thanksgiving. And many shied away from the entrance bells, the heavily marked items offered for a limited time that drew crowds. Instead, the discounted items are available throughout the month, during Black Friday or the bank holiday weekend.
In today’s economic environment, the National Retail Federation, the largest retail group, expects holiday sales growth to slow to a range of 6% to 8%, compared with soaring growth in 13, 5% a year ago. However, these figures, which include online spending, aren’t adjusted for inflation, so real spending may even be lower than it was a year ago.
Adobe Analytics expects online sales to grow 2.5% from November 1 to December 31, a slowdown from last year’s 8.6% pace 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, particularly this year. The two-month period between Thanksgiving and Christmas accounts for about 20% of annual retail sales.
While Black Friday still has a strong place among U.S. shoppers, it lost prominence over the past decade as stores opened on Thanksgiving and shopping moved to Amazon and other online retailers. Stores further diluted the state of the day by promoting Black Friday sales throughout the month. This year, stores started sales earlier than last year to get shoppers to hand out their purchases.
Many shoppers like Lolita Cordero of Brooklyn, New York are sitting out Black Friday.
“I’m shopping ahead, trying to get things on sale, discount or clearance, and using coupons,” Cordero said. “I’ve never done Black Friday. I heard it’s a mess and people get hurt.
However, according to Sensormatic, which monitors customer traffic, some experts believe Black Friday will again be the busiest shopping day this year. Consumers have also returned to brick-and-mortar shopping amid the easing of COVID-19 concerns. In fact, more stores opened than closed in the United States last year for the first time since 2016, and that gap is only widening this year, according to Coresight Research, a retail research and consulting firm.
AP Personal Finance writer Cora Lewis contributed to this report.
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