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Wednesday, December 7, 2022

Inflation looms over shoppers headed for Black Friday | business news

NEW YORK (AP) — Black Friday marks a return to familiar patterns of holiday shopping, but inflation is taking its toll on consumers.

High prices for groceries, rent, gas and other household expenses have hurt shoppers. As a result, many are reluctant to spend unless there is a big sale and are more selective about what they buy, in many cases buying cheaper things and less expensive stores.

Shoppers are also using more of their savings, increasingly turning to “buy now, pay later” services like Afterpay that allow users to pay for items in installments as well as max out their credit cards at a time when the Federal Reserve is raising rates. to cool the US economy.

Such financial difficulties could help drive buyers to hunt for bargains.

Isela Dalencia, who was shopping for household essentials like laundry detergent at a Walmart in Secaucus, New Jersey, earlier this week, said she will delay shopping for holiday gifts until Cyber ​​Monday, the Monday after Thanksgiving. , when online sales pick up. Then she’ll again wait until the week before Christmas to get the best deals, unlike last year when she started shopping before Black Friday.

“I’m buying less,” Dalencia said, noting that he will spend about $700 on holiday gifts this year, a third less than last year.

Katie Leach, a social worker in Manhattan, was also walking the aisles at Walmart, but said she will start Christmas shopping during the first week of December, as usual. This time around, however, you’ll be relying more on sales, your credit card and “buy now, pay later” services to get you through the shopping season due to rising food prices and other household expenses.

“The money doesn’t go as far as it did last year,” Leach said.

This year’s trends contrast with those of a year ago, when consumers bought early for fear of not getting what they needed amid grid clogs. Stores didn’t have to discount much because they had a hard time bringing in items.

But some pandemic habits remain. Many retailers that closed their stores on Thanksgiving and instead offered discounts on their websites to reduce in-store crowds are still clinging to those strategies, despite a return to business as usual.

Major retailers, including Walmart and Target, will close their stores again on Thanksgiving. And many shied away from Doorbusters, the deeply discounted, limited-time items that drew crowds. Instead, discounted items are available throughout the month, Black Friday, or the holiday weekend.

Against the current economic backdrop, the National Retail Federation, the largest retail trade group, expects holiday sales growth to slow to a range of 6% to 8%, from a blistering 13.5% growth a year ago. . However, these figures, which include online spending, are not adjusted for inflation, so actual spending could even be lower than a year ago.

Adobe Analytics expects online sales to rise 2.5% from November 1 to December 31, a slowdown from last year’s 8.6% pace, when shoppers were unsure whether to return to the physical stores.

Analysts consider the five-day Black Friday weekend, which includes Cyber ​​Monday, a key barometer of shoppers’ willingness to spend, particularly this year. The two-month period between Thanksgiving and Christmas accounts for about 20% of the retail industry’s annual sales.


AP personal finance writer Cora Lewis contributed to this report.


Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio

Copyright 2022 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.

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