NEW YORK (AP) — Shoppers sought the best deals in stores and online as retailers offered new Black Friday discounts to entice consumers eager to start shopping for holiday gifts but weighed down by inflation.
Due to high prices for food, rent, gasoline and other necessities, many people were hesitant to spend unless there was a big sale.
Buyers were more selective, choosing cheaper options, dipping more into their savings and turning to “buy now, pay later” services that allow payment in instalments. Some were also running out of credit cards at a time when the Federal Reserve was raising rates to cool the US economy.
Sheila Diggs, 55, walked into a Walmart in Mount Airy, Md., early Friday to look for a deal on a coffee maker and to see what else was in the aisles. She said her family has been more cautious about their vacation spending this year. Usually, all the adults in the family exchanged gifts. But this year, everyone is pulling names and selecting someone because things cost so much more, she said.
“Everything goes up except your paycheck,” said Diggs, who manages medical records at a local hospital.
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 lockdowns. Stores didn’t have to do a lot of discounting because they had trouble bringing items.
This year, shoppers are waiting for the best deals, said Rob Garf, vice president and general manager of retail at Salesforce, which tracks online sales. He said retailers finally responded this week, introducing more attractive deals online after he offered mostly lackluster discounts earlier in the season.
According to Salesforce data, online discount rates were 31% for Thanksgiving, up 7% from a year earlier. The largest discounts were for household appliances, general clothing, makeup, and luxury handbags. Online sales during the holidays increased by 9% compared to last year.
“Retailers have finally stepped up the discount game and consumers are responding accordingly,” Garf said.
Macy’s Herald Square in Manhattan, where discounts included 60% off fashion jewelry and 50% off select shoes, was bustling Friday morning.
Traffic was “significantly higher” on Black Friday than the previous two years as shoppers feel more comfortable in crowds, Macy’s CEO Jeff Gennette said.
He said bestsellers from Macy’s online sale, which started last weekend, included 50% off beauty sets. Last year Macy’s, like many other stores, had supply chain issues and some of the gifts didn’t arrive until after Christmas.
“Right now we’re set and ready to go,” he said.
Sophia Rose, 40, a respiratory specialist visiting Manhattan from Albany, New York, was heading to Macy’s with big plans to splurge after skimping last year while still in school. She budgeted for food and gas to keep up with inflation, but she had already spent $2,000 on holiday gifts and plans to spend a total of $6,000.
“I’m going to hit all the floors,” she said. “That’s the plan.”
A Best Buy store in Manhattan had TVs stacked, including 50-inch Samsung TVs for $297, a saving of $82.
Delmarie Quinones, a 30-year-old home helper from the Bronx, was only there to pick up a laptop and printer she had ordered online for $179 – down from $379 – as part of a sale on the Black-Friday.
Quinones said rising food prices and other expenses are causing her to cut spending compared to a year ago, when she had money from government child tax credit payments .
“I can’t get what I had before,” said the mother of five children aged 1 to 13. “Even when it was back to school, it was difficult to provide them with essentials.
Major retailers including Walmart and Target stuck to their pandemic-era decision to close stores on Thanksgiving Day, moving away from door-to-door and pushing discounts on their sites instead. website.
But people are still shopping for Thanksgiving — online. Garf said online sales increased in the evenings during the holidays, suggesting people have shifted from feasting to shopping over the phone. And with the holidays ascendhe said a greater share of online shopping happened on mobile devices this year.
“The cellphone has become the remote control of our daily lives, leading to an increase in couch shopping as consumers settle in after Thanksgiving dinner,” Garf said.
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.
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Hadero reported from Mount Airy, Maryland. Olson reported from Arlington, Virginia. Cora Lewis, personal finance editor for the Associated Press in New York, contributed to this report.
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