NEW YORK (AP) — Shoppers scoured stores and online for the best deals as retailers offered new Black Friday discounts to lure consumers looking to start buying Christmas gifts but have been weighed down by inflation.
With the increased prices of groceries, rent, gas and other essentials, many people were reluctant to spend unless there was a big sale.
Shoppers were more selective, choosing cheaper options, taking advantage of more savings, and turning to “buy now, pay later” services that allow for payment in instalments. Some have also used up their credit cards at a time when the Federal Reserve is raising interest rates to cool the US economy.
Sheila Diggs, 55, went to a Walmart in Mount Airy, Maryland early Friday to look for a deal on a coffee maker and see what else was in the aisles. She said her family is being more careful with their holiday spending this year. Usually all adults in the family exchanged gifts. But this year everyone is drawing names and picking one person because things cost so much more, she said.
“Everything goes up except your paycheck,” said Diggs, who manages medical records at a local hospital.
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.
This year, shoppers are looking for the best bargains, said Rob Garf, vice president and general manager of retail at Salesforce, which tracks online sales. He said retailers finally responded this week, rolling out more attractive deals online after offering mostly lackluster discounts earlier in the season.
Online discount rates were 31% on Thanksgiving, up 7% from a year ago, according to Salesforce data. The biggest discounts were in household appliances, general clothing, make-up and luxury handbags. Online holiday sales increased by 9% year-on-year.
“Retailers have finally stepped up the discount game and consumers are responding in kind,” Garf said.
Macy’s Herald Square in Manhattan, where there was 60% off costume jewelry and 50% off select shoes, was packed with shoppers early Friday.
Traffic was “significantly greater” on Black Friday compared to the previous two years because shoppers are more comfortable in crowds, Macy’s CEO Jeff Gennette said.
He said best-sellers from Macy’s online sale, which began last weekend, included 50% off beauty kits. Last year Macy’s, like many other stores, had supply chain problems and some of the gifts didn’t arrive until after Christmas.
“Right now we’re poised and ready to go,” he said.
Sophia Rose, 40, a respiratory specialist visiting Manhattan from Albany, New York, went to Macy’s with big plans after saving up last year while she was in school. She has budgeted for food and gas to deal with inflation, but had already spent $2,000 on Christmas gifts and plans to spend a total of $6,000.
“I will touch every floor,” she said. “That is the plan.”
A Manhattan Best Buy store had piles high of TVs, including 50-inch Samsung TVs, discounted to $297, a savings of $82.
Delmarie Quinones, a 30-year-old Bronx health worker, was only there to pick up a laptop and printer she ordered online for $179 — less than $379 — as part of a Black Friday sale.
Quinones said higher prices for groceries and other spending are causing her to cut back on spending from a year ago when she had money from the state child tax credit.
“I don’t get what I used to get anymore,” says the mother of five children aged 1 to 13.
Big retailers like Walmart and Target stuck to their pandemic-era decisions to close stores on Thanksgiving Day, moving away from doorbusters and instead offering discounts on their websites.
But people still shop on Thanksgiving — online. Garf said online sales spiked in the evening during the holiday, suggesting people were switching from feasting to phone shopping. And with the rise in holiday travel, he said a greater proportion of online shopping has been on mobile devices this year.
“The cellphone has become the remote control of our daily lives, and this has led to an increase in couchette shopping as consumers settle down after Thanksgiving dinner,” Garf said.
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 get into the 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.
Hadero reported from Mount Airy, Maryland. Olson reported from Arlington, Virginia. Associated Press Personal Finance Writer Cora Lewis of New York contributed to this report.
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