NEW YORK (TBEN) — Black Friday marks a return to familiar holiday shopping patterns, but inflation is weighing on consumers.
Higher prices for food, rent, gas and other household expenses have taken their toll on shoppers. As a result, many are reluctant to spend unless there’s a big sale and are more selective with what they’ll buy – in many cases, they’ll trade in cheaper gear and cheaper stores.
Shoppers are also putting more into their savings, increasingly turning to “buy now, pay later” services such as Afterpay, which allows users to pay for items in installments, and are using their credit cards at a time when the Federal Reserve is raising rates to boost the U.S. economy. cooling down.
Such financial hardship can drive shoppers to hunt for bargains.
Isela Dalencia, who shopped for household essentials like laundry detergent at a Walmart in Secaucus, New Jersey earlier this week, said she’s putting off buying Christmas gifts until Cyber Monday — the Monday after Thanksgiving — when online sales pick up again . Then she waits again until the week before Christmas to get the best deals, unlike last year when she started buying 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, also roamed the aisles of Walmart, but said she will begin Christmas shopping as usual in the first week of December. This time, however, she relies more on bargains, her credit card, and “buy now, pay later” services to get through the shopping season due to rising prices on food and other household expenses.
“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 for fear of not getting what they needed amid supply network congestion. Stores didn’t have to discount much because they struggled to bring in items.
But some pandemic habits linger. Many retailers who closed stores on Thanksgiving Day and instead pushed discounts on their websites to thin out store crowds are still sticking to those strategies despite a return to normalcy.
Major retailers, including Walmart and Target, are once again closing their stores on Thanksgiving. And many moved away from doorbusters, the deeply discounted items offered for a limited time that drew crowds. Instead, the discounted items are available throughout the month, on Black Friday or the holiday weekend.
Against the current economic backdrop, the National Retail Federation – the largest retail group – expects holiday sales growth to slow to a range of 6% to 8%, down from a blistering 13.5% growth a year ago. However, these figures, including online spending, are not adjusted for inflation, so actual spending may actually be lower than a year ago.
Adobe Analytics expects online sales to grow 2.5% between Nov. 1 and Dec. 31, a slowdown from last year’s 8.6% when shoppers were unsure about returning to brick-and-mortar stores.
Analysts view the five-day Black Friday weekend, including Cyber Monday, as an important 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.
TBEN Personal Finance Writer Cora Lewis contributed to this report.
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