Black Friday Shopping: A Subdued Start to the Holiday Season
Discount Hunters Out in Full Force
Shoppers around the world hit stores on Black Friday in search of discounted electronics, clothing, and household goods. However, the day appeared quieter compared to previous years, with fewer crowds and less excitement surrounding the event.
Changing Holiday Spending Trends
Brokerage TD Cowen revised its U.S. holiday spending estimate to 2% to 3% growth, down from the previous 4% to 5%, attributing the change to flat Black Friday traffic and early discounts in October and November. Consumers seemed to have already purchased what they wanted, leading to reduced urgency for Black Friday deals.
Impact of Inflation and High Interest Rates
Many consumers, affected by persistent inflation and high interest rates, are expected to spend at a slower pace this holiday season. Major retailers have reduced seasonal hiring, and cautious spending behavior is likely to continue throughout the season.
Shift in Consumer Behavior
Discount retailers like Target and Ross Stores have seen strong quarterly performances, indicating that consumers are more value-conscious and spending more conservatively. A record 130.7 million people are expected to shop in stores and online in the U.S. on Black Friday this year, according to the National Retail Federation.
Rise of Online Shopping
The rise of online shopping has reduced the significance of Black Friday as a single-day event. Shoppers spent an estimated $7.3 billion online on Black Friday, marking a 7.4% increase from last year. Online spending on Thanksgiving day reached $5.6 billion, indicating a shift in consumer behavior towards digital shopping.
Challenges for Retailers
Retailers such as Macy’s and Amazon have launched early deals and are expected to offer additional discounts closer to Christmas. However, the biggest concern for retailers is whether these deals will attract inflation-weary consumers.
Protests Amidst Shopping
Black Friday coincided with a four-day Israel-Hamas truce, and protesters held sporadic demonstrations across the U.S. with the slogan “shut it down for Palestine.” The protests, including a die-in at a Dallas mall and temporary shutdowns at shopping centers, brought political activism into the shopping environment.
Looking Ahead
As the holiday season progresses, retailers will continue to navigate the challenges of changing consumer behavior, online shopping trends, and the impact of global events on shopping dynamics.
