Black Friday in the U.S. is gloomy, consumers don’t open their wallets…”I need to discount more”.
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Despite being the biggest shopping day in the U.S., Black Friday, consumers have become more discerning, opening their wallets less than before, according to recent analysis.
According to Bloomberg and Reuters on the 24th (local time), it is expected that retailers’ performance will be weaker than the last two years following the COVID-19 pandemic, as more consumers are waiting for bigger discounts during this year’s Black Friday in the U.S.
In the U.S., the period from ‘Black Friday’ (the Friday following the fourth Thursday in November, Thanksgiving Day) to Christmas and the end of the year is the biggest sale season of the year. It was a common sight for consumers to line up at offline stores from the early morning of Black Friday, as retailers offered substantial discounts for stock clearance. However, this year’s sales are expected to be weaker than usual.
Salesforce, a customer relationship management (CRM) software company, predicted that U.S. online retail sales in November and December this year will increase by 1% compared to the same period last year. This is the smallest growth rate in the last five years.
Adobe Analytics, a marketing data analysis solution, also forecasted that the U.S. online sales growth rate will be 4.8% over the next two months compared to the same period last year. This is higher than last year, but falls short of the pre-pandemic average annual growth rate of 13%. However, Mastercard predicted that this year’s online and offline sales in the U.S. will increase by 3.7% compared to last year, a growth rate similar to the pre-pandemic level.
At 6 a.m. on Black Friday, only half of the parking lot at Walmart in New Milford, Connecticut, was occupied. Theresa Forsberg, a shopper who visits here every Black Friday morning, told Reuters, “It’s much quieter this year.”
Paul Aren, 69, who visited the ‘Magnificent Mile’ shopping street in Chicago, recalled the days when department stores offered up to 70% discounts, saying, “You can’t see that anymore. What they (retailers) are doing now is just clearing out unsold inventory.”
Alyssa Fanelle, who visited Willowbrook Mall in Wayne, New Jersey, returned empty-handed from shopping for wedding shoes at Macy’s department store, telling Bloomberg, “My favorite brand was offering a 25% discount, but that’s not a Black Friday discount, it’s just a regular sale price.”
According to foreign media, inflation and high interest rates are partly to blame for the downturn in consumption during the Black Friday period.
Although the inflation rate is slowing down, many product prices are higher than two years ago. In addition, with rising interest rates, the cost of buying homes and cars is also increasing, forcing consumers to find a balance, Bloomberg pointed out.
At the end of last year, products that did not arrive on time in 2021 due to supply chain disruptions during the pandemic piled up as inventory, and retailers offered substantial discounts to clear the stock. As a result, retail sales increased significantly last year.
Therefore, some consumers are expecting discounts this year to be as large as last year, Bloomberg explained.
Barbara Khan, a professor at the Wharton School of the University of Pennsylvania, said, “People are spending more value-conscious. They are consuming more conservatively.”
Meanwhile, the National Retail Federation (NRF) predicted that 130.7 million Americans will shop online and offline during this year’s Black Friday season.
According to a survey of 8,424 American adults conducted by the NRF earlier this month, American shoppers plan to spend an average of $875 on end-of-year shopping, an increase of $42 from last year.
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