NEW YORK (AP) — While Black Friday will return to familiar holiday shopping patterns, there’s still uncertainty.
The US labor market remains strong, consumer spending is resilient and inflation has moderated. But high prices for food, rent, gas and other household expenses have weighed on buyers.
As a result, many don’t want to spend unless there’s a big sale and they’re being more selective about what they buy, in many cases turning to cheaper things and cheaper stores.
Shoppers are also dipping deeper into savings, increasingly going “buy now, pay later.” Services such as Afterpay, which allow users to pay for items in installments, as well as the launch of credit cards, come at a time when the Federal Reserve is raising rates to cool the US economy.
These financial difficulties can encourage buyers to look for bargains.
Isela Dalencia, who was shopping for items like laundry detergent at Walmart in Secaucus, New Jersey earlier this week, said she puts off buying holiday gifts until Cyber Monday — the Monday after Thanksgiving — when online sales are up. He will then wait until the week before Christmas to get the best deals, unlike last year when he started shopping before Black Friday.
“I’m shopping less,” said Dalencia, who noted she’ll spend about $700 on holiday gifts this year, a third less than last year.
Katie Leach, a Manhattan social worker, was browsing the aisles at Walmart, but said holiday shopping will resume as usual in the first week of December. This time, however, it will rely on bargains, credit cards and “buy now, pay later” services to get through the shopping season, as prices for groceries and other household expenses have risen.
“The money doesn’t go as far as it did last year,” Leach said.
This year’s trends are a contrast to a year ago as consumers were buying early for fear of not getting what they needed online. Stores didn’t have to discount heavily because they were struggling to bring things in.
But some habits of the pandemic remain. Many retailers that closed stores on Thanksgiving and pushed discounts on their websites are still sticking to those strategies to reduce crowds in stores, even as they return to normal.
Major retailers including Walmart and Target are closing stores again on Thanksgiving. And many were turned away from door-to-door, deeply marked-up items offered for a limited time that drew crowds. Instead, discount items are available all month long, including Black Friday or the 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%, down from a whopping 13.5% growth a year ago. However, these figures, including online spending, are not adjusted for inflation, so actual spending may 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 hesitant to return to brick-and-mortar stores.
Analysts consider the five-day Black Friday weekend, which includes Cyber Monday, to be 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 has a strong place among shoppers in the US, it has lost ground over the past decade as stores opened on Thanksgiving and shopping shifted to Amazon and other online retailers. Stores have further diluted the status of the day by promoting Black Friday sales all month long. This year, stores started selling earlier than last year, allowing shoppers to spread out their shopping.
There are many shoppers like Lolita Cordero of Brooklyn, New York, sitting on Black Friday.
“I’m shopping early, I try to get things on sale, discounts or sales, and I use coupons,” Cordero said. “I never did Black Friday. I hear it’s a mess, and people get hurt.’
However, some experts believe that Black Friday will be the busiest shopping day again this year, according to Sensormatic, which tracks customer traffic. Consumers have also returned to shopping in brick-and-mortar stores to ease concerns about COVID-19. In fact, more stores opened than closed in the U.S. last year for the first time since 2016, and that gap is widening this year, according to Coresight Research, a retail consulting and research firm.
AP Personal Finance writer Cora Lewis contributed to this report.
Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio