Ozva AdminUS retailers discounted heavily on Black Friday to eliminate bloated inventories, but customers responded with subdued traffic, casting doubt on the profitability of many chains.
Crowds were thin late in the morning at Connecticut’s Stamford Town Center mall, with few shoppers at Kay Jewelers and only a short line at Forever 21. A couple at a Walmart Inc. supercenter near Dallas feasted on the lack of crowds while shopping for gifts for their grandchildren At the Stonestown Mall in San Francisco, shoppers were few and far between.
“It feels like a normal day,” said Miguel Martinez, 35, a warehouse supervisor, as he walked through a Target Corp. store on Chicago’s North Side with his 12-year-old daughter, Jaylen. Martinez said he has been cutting cable TV and Netflix to pay for gifts for his four children. He described the Black Friday discounts as “pretty good” when he picked up a pair of Amazon Echo Dot speakers, Nerf guns and a Disney. Charm wrist.
American consumers are still spending but are turning more cautious after dealing with the highest inflation rates in four decades this year. They are also more attentive to sales, and retailers, many of which still carry large inventory after misjudging an erosion in demand, are trying to stand out by offering the biggest discounts since before the pandemic.
modest growth
The US holiday shopping season is likely to see modest growth in annual sales, said Melissa Minkow, director of retail strategy at digital consultancy CI&T. “That’s still a victory,” she said, contrasting the outlook with the UK, where high inflation has caused consumers to cut spending sharply. Still, the deep discounts on Black Friday are likely to squeeze retailers.
“Profits won’t be where retailers want them to be,” Minkow said. That’s partly because they “couldn’t pass all the inflationary costs on to consumers.”
Read more: Bloomberg tracks Black Friday across the country
Ecommerce spending on Black Friday rose 2.3% to $9.12 billion, according to Adobe Analytics.
That’s far less than the US inflation rate of almost 8% for the 12 months ending in October. Salesforce Inc. said the average consumer discount on Black Friday was expected to be more than 30%, up from 28% last year and close to the 33% rate in 2019. The biggest discounts were on appliances, apparel and health and beauty.
But shoppers are cutting back in reaction to higher prices, said Rob Garf, Salesforce’s vice president of retail.
“People are just buying less product because their dollar isn’t going as far as it used to,” Garf said.
medium lonely
At Crossgates Mall in Albany, New York, low-cost brands and high-end retailers had the most foot traffic, while mid-market stores were desolate.
Gap Inc.’s Old Navy, which was offering 60% off most items, had such a long line that some shoppers turned away as soon as they entered the store.
Drawing big crowds at the high end were Lululemon Athletica Inc., the sports-holiday darling, which had just a few shelves of discount merchandise, and American Eagle Outfitters Inc.’s Aerie, an intimates brand popular with shoppers on the high end. Generation Z. Meanwhile, stores like Gap’s Banana Republic, Macy’s Inc. and Urban Outfitters Inc. had no lines and only a handful of shoppers.
Healthy traffic at some retailers shows that many US consumers are still spending at a solid pace. A crowded Best Buy Co. store near the Dallas-Fort Worth International Airport had half a dozen cars pulled up outside to pick up large TVs and other electronics. Grapevine Mills, a nearby discount mall, was so crowded that Shawanda Miller threw up her hands and left.
“I don’t even want to talk about it, it was so crowded,” said Miller, 43. “I’ll come back another day.”
No wait
But crowds like that seemed to be an exception. The checkout line at Macy’s toy section in Stamford, Connecticut, didn’t have to wait, and the cashier said the store had prepared for more shoppers. A Walmart in suburban Dallas also had cashiers ready with no lines, which was just fine for Verónica González and Carlos García, a couple visiting Corpus Christi, Texas.
“The good thing about this is that you don’t have to come at 5 in the morning, and here is everything we are looking for,” González said. Garcia said “everything is for the grandchildren” as he pushed a shopping cart full of sheets, suitcases and toys.
The era of Black Friday crowds came to a halt with the pandemic, and likely won’t return as more consumers shop online and spread their spending over a longer period. “The historic raucous atmosphere of Black Friday may be a thing of the past,” Edward Yruma, a retail analyst at Piper Sandler, said in a report.
Behind the subdued crowds are people like Therese Pociask, 60, who was shopping at Target in Chicago for her small daycare. She was also looking for gifts for her nieces and nephews. In her cart were a gift pack of Epsom salt, a Fujifilm Instax camera film, three stuffed dinosaurs, and a puzzle.
Pociask said he plans to spend about $2,000 over the holidays, about the same as last year. But with high inflation, his money doesn’t go as far as it used to.
“I’m trying to stay within my budget, but find I have to spend more to make it look the same,” she said.
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