NEW YORK (AP) — Black Friday marks a return to familiar holiday shopping patterns, but inflation is weighing on consumers.
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 ramping up 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.
AP Personal Finance writer Cora Lewis contributed to this report.
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