NEW YORK (AP) — Black Friday marks a return to typical holiday shopping habits, but inflation is weighing on consumers.
High prices for food, rent, gasoline and other household expenses weighed on buyers. As a result, many are hesitant to spend unless there’s a big sale and are more selective with what they’ll buy – in many cases, swapping to cheaper products and cheaper stores.
Shoppers are also tapping more into their savings, increasingly turning to “buy now, pay later” services like Afterpay that allow users to pay for items in installments, as well as use their credit cards at a time when the Federal Reserve raises rates to cool the US economy.
Such financial hardships could make buyers look for bargains.
Isela Dalencia, who was shopping for household essentials like detergent at a Walmart in Secaucus, New Jersey, earlier this week, said she was delaying shopping for holiday gifts until Cyber Monday — the Monday after Thanksgiving – when online sales will increase. Then she will still wait until the week before Christmas to get the best deals, unlike last year when she started shopping before Black Friday.
“I shop less,” Dalencia said, noting that she will spend about $700 on holiday 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 would start her holiday shopping in the first week of December as usual. This time, however, she will rely more on bargains, her credit card and “buy now, pay later” services to get through the shopping season due to soaring prices for food and other household expenses. .
“The money isn’t going as far as last year,” Leach said.
This year’s trends contrast with those of a year ago, when consumers were buying early for fear of not getting what they needed amid supply network obstructions. Stores didn’t have to do a lot of discounting because they had trouble bringing items.
But some pandemic habits persist. Many retailers who closed stores on Thanksgiving Day and instead pushed discounts on their websites to thin out crowds in stores are keeping those strategies, despite a return to normal.
Major retailers, including Walmart and Target, are closing their stores again on Thanksgiving. And many have moved away from door-to-door, the deeply marked items offered for a limited time that have drawn crowds. Instead, the discounted items are available throughout the month, on Black Friday or bank holiday weekends.
In the current economic environment, the National Retail Federation – the largest retail group – expects holiday sales growth to slow to a range of 6% to 8%, compared to the meteoric growth of 13.5% from a year ago. However, these figures, which include online spending, are not adjusted for inflation, so actual spending may even be down from 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 to return to physical stores.
Analysts see the five-day Black Friday weekend, which includes Cyber Monday, 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 annual retail sales.
AP Personal Finance Writer Cora Lewis contributed to this report.
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