Black Friday shoppers find great deals as US retailers clear stock

Price-conscious shoppers are finding fully stocked stores at the start of the US holiday retail season, testing consumers’ willingness to keep spending while inflation remains at a 40-year high.

Mastercard predicts that on Black Friday, the day after Thanksgiving, when the Christmas shopping period traditionally begins, consumers can spend up to 15% more than on the same day in 2021.

But the improvement largely reflects shoppers’ tactical pursuit of short-term promotions that retailers offer to clear inventory amid a slowing economy. In 2021, by contrast, consumers are overwhelmed with pandemic stimulus funds paid out to secure in-demand items early, fearing supply chain disruptions will leave stores empty.

Retail weaker growth expected during peak shopping season, with the National Retail Federation forecasting sales to rise by 6-8 percent during November and December. It would be barely keeping up with inflationwhich in October was 7.7%.

Figures published Adobe Analytics Friday also suggested that shoppers are prioritizing in-store shopping over online ordering as fears of a health pandemic ease.

According to Adobe, consumers spent a record $5.29 billion online over Thanksgiving, up 2.9% from last year. But online spending in the first three weeks of November was the same as last year, with Adobe expecting Black Friday e-commerce revenue to increase by just 1% to $9 billion.

Higher prices for everything from Thanksgiving turkeys to gas and airfare have begun to weigh on spending, especially among low-income households.

Retailers such as Best Buy and Target have warned of declining demand in recent weeks, with some predicting a return to pre-pandemic shopping patterns after two years in which health concerns and inventory issues skewed spending.

Allianz Trade estimates that U.S. discretionary retail inventories reached $309 billion at the end of September, up $54 billion from a year earlier.

Consumers were tight on funds and knew that stores were “overstocked” this year, as Macy’s said earlier this month. While some stores have launched seasonal promotions after Halloween, high inventory has made Americans less eager to buy gifts before Thanksgiving than they were last year.

Apparel retailer Urban Outfitters also said its customers are putting a record number of items into their online shopping carts, anticipating Black Friday and Cyber ​​Monday promotions before completing a transaction to keep costs down.

Several chains are expanding their promotions beyond the usual peak days for shopping in person or online. Apple advertised a four-day “Apple shopping event”, Target has weekly discounts, and Walmart has been hosting “Black Friday” events every Monday since the beginning of November.

Adobe found that the biggest promotions this year are toys, which are 34% off list prices, and electronics, where discounts are as high as 27%. Squishmallows toys, the video game God of War: Ragnarök and Apple’s AirPods are among the best-selling items, he said.

Many buyers are expected to rely on credit card charges to secure such transactions. By mid-2021, US households had accumulated about $2.3 trillion in excess savings, according to the data. Moody’s Investor Servicebut higher prices reduced that amount to about $1.7 trillion, or $5,200 per person.

A resilient labor market has kept Americans from spending, but for some families, the change has been more dramatic, with cash balances in the bottom 20% of households down 65% this year.