Holiday shopping begins as inflation eases

NEW YORK (AP) — While Black Friday marks a return to familiar holiday shopping patterns, uncertainty remains.

The US labor market remains strong, consumer spending is resilient and inflation is slowing. However, the increase in food, rent, gasoline and other household expenses has hurt buyers.

As a result, many don’t want to spend money unless there’s a big sale and are more selective about what they buy – in many cases trading down to cheaper items and cheaper stores.

Shoppers are also more interested in their savings, increasingly turning to “buy now, pay later”. Services like Afterpay, which let users pay for things in installments, are also launching credit cards at a time when the Federal Reserve is raising rates to cool the US economy.

Such financial difficulties can prompt buyers to look for a bargain.

Isela Dalencia, who shopped for household items like detergent at Walmart in Secaucus, New Jersey earlier this week, said she put off buying holiday gifts until Cyber ​​Monday — the Monday after Thanksgiving — when online sales surge. He will then wait again until the week before Christmas to get the best deals, unlike last year when he started shopping before Black Friday.

“I’m shopping less,” Dalencia said, noting she will spend about $700 on holiday gifts this year, a third less than last year.

Katie Leach, a social worker in Manhattan, also walked the aisles at Walmart, but said she’ll start her holiday shopping the first week of December, as usual. But this time, he’ll rely more on deals, credit cards and buy-now-pay-later services to tide him over during the shopping season due to rising food and other household expenses.

“The money doesn’t go as far as last year,” Leach said.

This year’s trends are different from a year ago, when consumers bought early for fear of not being able to get what they needed amid supply chain congestion. The stores didn’t have to discount much because they had trouble bringing in the items.

But some pandemic habits persist. Many retailers that closed stores on Thanksgiving and instead offered discounts on their websites to reduce in-store crowds are still pursuing these strategies despite the return to normalcy.

Major retailers, including Walmart and Target, are closing their stores again on Thanksgiving Day. And many of the deeply marked-up items, offered for a limited time that drew crowds, got away from the gatekeepers. Instead, discounted items are available throughout the month, on Black Friday or a holiday weekend.

Against today’s economic backdrop, the National Retail Federation, the largest retail trade group, expects holiday sales growth to slow to 6% to 8% from 13.5% growth a year ago. However, these figures, which include online spending, are not adjusted for inflation, so real spending may even be lower than a year ago.

Adobe Analytics expects online sales to grow 2.5% from Nov. 1 to Dec. 31, a slowdown from last year’s 8.6% pace when shoppers were unsure about returning to brick-and-mortar stores.

Analysts see the five-day Black Friday weekend as a key barometer of shoppers’ willingness to spend, especially this year. The two-month period between Thanksgiving and Christmas accounts for about 20% of the retail industry’s annual sales.

While Black Friday still holds a strong place among shoppers in the U.S., it has lost ground over the past decade as stores and shopping on Thanksgiving shift to Amazon and other online retailers. Stores further downplayed the day’s status by promoting Black Friday sales throughout the month. This year, stores started sales earlier than last year to spread out shoppers’ purchases.

Many shoppers, like Lolita Cordero of Brooklyn, New York, sit out Black Friday.

“I shop early, I try to find everything on sale, discount or clearance — and I use coupons,” Cordero said. “I’ve never done Black Friday. I hear it’s a mess and people are hurt.”

However, some experts believe Black Friday will still be the busiest shopping day of the year, according to customer traffic tracker Sensormatic. Consumers are also returning to shopping in brick-and-mortar stores amid easing concerns about COVID-19. In fact, for the first time since 2016, more stores opened than closed in the U.S. last year, according to retail consulting and research firm Coresight Research, and the gap is widening this year.


AP Personal Finance Writer Cora Lewis contributed to this report.


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