NEW YORK (AP) – Black Friday marks a return to familiar holiday shopping patterns, but inflation is weighing on consumers.
Increased prices for groceries, rent, gas and other household expenses have weighed heavily on shoppers. As a result, many are reluctant to spend unless there’s a big sale and are more selective about what they buy – in many cases swapping out for cheaper stuff and less expensive deals.
Shoppers are also putting more into their savings, increasingly turning to “buy now, pay later” services like Afterpay, which allow users to pay for items in installments and top up their credit cards at a time when the Federal Reserve is… Interest rates hiked to cool US economy.
Such financial hardships could help keep shoppers on the lookout for bargains.
Isela Dalencia, who shopped for household items like laundry detergent at a Walmart in Secaucus, N.J. earlier this week, said she’s putting off buying Christmas gifts until Cyber Monday — the Monday after Thanksgiving — when online sales pick up. Then again, she’ll 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 said she will start Christmas shopping as usual the first week of December. This time, however, she’ll rely more on bargains, her credit card, and “buy now, pay later” services to get her through the shopping season as the prices of groceries and other household expenses soar.
“The money doesn’t go as far as it did last year,” Leach said.
This year’s trends contrast with a year ago, when consumers bought early because they feared they couldn’t get what they needed due to grid congestion. Stores didn’t have to discount much because they had trouble introducing items.
But some pandemic habits remain. Many retailers who closed stores for Thanksgiving and instead offered discounts on their websites to thin out in-store crowds are still sticking to these strategies despite the return to normal.
Big retailers like Walmart and Target are closing their stores again on Thanksgiving. And many were moving away from doorbusters, the heavily discounted items offered for a limited time that drew crowds. Instead, the discounted items are available throughout the month on Black Friday or the bank holiday weekend.
In today’s economic backdrop, the National Retail Federation — the largest retail group — expects holiday sales growth to slow to a range of 6% to 8% from last year’s 13.5% growth. However, these figures, which include online spending, are not adjusted for inflation, so real spending could even be lower than a year ago.
Adobe Analytics expects online sales to grow 2.5% from November 1 to December 31, slowing down from the 8.6% pace last year when shoppers were unsure whether to buy physical stores would return.
Analysts are looking at the five-day Black Friday weekend, which includes Cyber Monday, as an important barometer of shoppers’ willingness to buy, especially this year. The two months between Thanksgiving and Christmas account for about 20% of annual retail sales.
AP Personal Finance Writer Cora Lewis contributed to this report.
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