Black Friday 2023: Cautious Consumers & Inflation Impact | Bloomberg

The US holiday shopping season appears to be off to a somewhat lackluster start this year. Consumers are facing multiple challenges, including a cooling job market, sluggish wage growth, persistent inflation, and the negative effects of tariffs.We are heading into the holiday shopping season, which begins in earnest on the 28th, with some concerns. Black Friday will be a test of whether U.S. consumers continue shopping despite economic headwinds, or whether the consumer-driven economy begins to lose momentum.

Against this backdrop, there are already signs that this year’s holiday season will not be as festive as in previous years.

“We don’t expect this holiday season to be all that excitement and glamor,” said Marshall Cohen, principal retail advisor at research firm Circana.

Sarcana said overall spending is expected to be similar to last year, but sales volume could fall by up to 2.5%. In other words, consumers will be able to buy fewer goods even as they spend more.

“This year, we’re not going to be in a situation where the Christmas tree is packed with presents,” Cohen said.

November and December are important months for U.S. retailers, accounting for 20% of annual sales. Competition among companies has intensified this year for consumers who are increasingly price-sensitive and anxious. Although there is still a desire to purchase, there is a growing trend toward choosing where to spend carefully, especially among those in the top 10% of income groups. Some consumers are using Black Friday sales to buy essential items in bulk rather than luxuries.

On the other hand, due to the impact of tariffs, some brands are offering large discounts like in previous years.It is becoming difficult to implement. Shoppers visiting brick-and-mortar stores may also face long lines and staff shortages. Seasonal retail employment is expected to fall to its lowest level since 2009.

“I don’t see any discounts that would make me say, ‘I don’t need it, but I have to buy it now,'” said Jennifer Greenberg, 29, of New York City, as she searched for a menorah at Bloomingdale’s department store.

However, that doesn’t mean there aren’t any sale items.

Walmart is offering discounts on a wide range of products, including 50% off Vizio TVs and $10 jackets. Amazon.com is offering discounts of up to 50% on Lancôme cosmetics and luxury fragrances from other brands. Target is offering almost half the price on SodaStream home soda machines and up to $200 off Apple products. They also sell affordable items such as $1 ribbon decorations, $5 Barbie dolls, and $10 blankets. Home Depot is offering 50% off select power tools and refrigerators.

Discount department store chain Kohl’s plans to run “aggressive” promotions to attract shoppers. Additionally, electronics retailer Best Buy is predicting a stronger Black Friday than usual.

Companies are also trying to attract shoppers in other ways. On Black Friday, Target will be handing out gift bags to the first 100 customers at each store, as well as limited edition merchandise themed to the movie “Wicked.” Walmart and Target are introducing new shopping tools powered by artificial intelligence (AI) to make it easier for customers to find and buy deals.

Despite the lack of macroeconomic stability this year, consumption has been relatively strong. At the beginning of the year, some consumers bought big-ticket items in anticipation of higher tariffs, boosting sales. Since then, a strong stock market has supported consumption among the top income earners. Many retailers say that consumer purchasing behavior has remained largely stable and that the impact of tariffs on prices has not been as large as initially expected.