Price-conscious shoppers are finding fully stocked stores at the start of a US holiday shopping season that will test consumers’ willingness to keep spending as inflation stands at 40-year highs.
Mastercard forecast that on Black Friday, the day after Thanksgiving that traditionally kicks off the holiday shopping period, consumers could spend 15 percent more than on the same day in 2021.
But the improvement largely reflects shoppers’ tactical search for short-term promotions offered by retailers to clear inventories in a slowing economy. In 2021, by contrast, consumers are pouring in pandemic stimulus funds paid to secure in-demand items early, fearing supply chain disruptions will leave stores short of merchandise.
retail industry expect weaker growth over the course of the peak shopping season, and the National Retail Federation forecasts that sales will increase 6 to 8 percent during November and December. That could barely keeps up with inflationwhich was running at 7.7 percent in October.
Figures published by adobe analytics on Friday also suggested that shoppers are favoring in-store purchases over online orders as pandemic health concerns subside.
Consumers spent a record $5.29 billion online on Thanksgiving, Adobe found, representing a year-over-year increase of 2.9%. But online spending in the first three weeks of November was on par with last year, and Adobe expects an increase of just 1 percent in Black Friday e-commerce revenue to $9 billion.
Higher prices for everything from Thanksgiving turkeys to gasoline and airfares have started to hurt spending, particularly among low-income households.
Retailers including Best Buy and Target have warned of declining demand in recent weeks, with several predicting a return to pre-pandemic shopping patterns after two years in which health fears and concerns about the inventory skewed spending.
Allianz Trade estimates that US discretionary retail inventories reached $309 billion at the end of September, $54 billion more than a year earlier.
Consumers had tighter budgets and knew stores had “excess inventory” this year, Macy’s said earlier this month. Although some stores began seasonal promotions after Halloween, ample inventory has made Americans less eager to shop for gifts before Thanksgiving than they were last year.
Urban Outfitters, the clothing retailer, similarly said its customers were observed putting record amounts of products in their online shopping carts, waiting for Black Friday and Cyber Monday promotions before completing their transaction to reduce the cost.
Several chains are extending their promotions beyond the usual peak days for purchases in person or online. Apple has announced a four-day “Apple shopping event,” Target has a week of sales, and Walmart has been hosting “Black Friday” events every Monday since early November.
The biggest deals this year are for toys, at 34 percent off list prices, and electronics, where discounts top out at 27 percent, Adobe found. Squishmallows toys, the God of War: Ragnarök video game and Apple AirPods are among the best-selling items, he said.
Many buyers are expected to rely on credit card spending to secure such deals. US households accumulated about $2.3 trillion in excess savings by mid-2021, according to Moody’s Investor Servicebut higher prices have brought this down to around $1.7 trillion or $5,200 per person.
A resilient job market has kept Americans spending, but the change has been more dramatic for some families: Cash balances for the bottom 20 percent of households have fallen by 65 percent this year.