'Inflation fatigue' may spur shoppers to spend cautiously Black Friday weekend
Long Island and national retailers will roll out discounts on Black Friday, hoping to draw customers to the unofficial kickoff of the holiday shopping season.
Yet holiday retail spending is expected to grow modestly this year with consumers still shell-shocked over recent years’ soaring inflation, retail experts said.
The U.S. inflation rate has fallen after soaring to a 41-year high of 9.1% in June 2022. The rate in October rose modestly to 2.6% compared to the same month last year.
Even with prices coming down in general, or an expectation that they will, consumers contending with “inflation fatigue” will spend cautiously and look for deals this holiday season, said Lauren Slade, retail director at S&P Global Ratings in Manhattan.
“Value perception will be key. We expect some of the … better-positioned sectors would be value-oriented sectors like discounters, big-box retailers, like a Walmart, other off-price names that are better positioned to meet demand for budget conscious shoppers,” she said.
Walmart, the nation’s biggest retailer, raised its sales projections for the fourth quarter as a growing number of households earning over $100,000 are drawn to the stores’ discounted prices, particularly on groceries.
But some larger retailers are already signaling that this holiday season won’t be rosy.
Last week, Target lowered its fourth-quarter sales forecast and expects sales to be flat at stores open for at least one year, as consumers cut back on discretionary spending.
Target had gotten feedback from consumers who said their budgets were stretched and that they were shopping carefully "to overcome the cumulative impact of multiple years of price inflation," CEO Brian Cornell told analysts during a Nov. 20 earnings call.
"They're becoming increasingly resourceful in their shopping behaviors, waiting to buy until the last moment of need, focusing on deals, and then stocking up when they find them,” he said.
High prices are a cause for concern for Huntington resident Kevin O’Connell, who said he might venture into Costco on Black Friday to buy a few items, such as printer ink and batteries.
“I think everyone has to temper their needs to some degree,” said O'Connell, 78. “I mean everything is so expensive. I was just online looking at the ink. It’s like $40 for one cartridge.”
Huntington resident Lauren Wendelken, 63, only shops in stores on Black Friday if they are offering exceptional deals, she said.
She started her Christmas shopping for her family weeks before Black Friday, taking advantage of Amazon Prime deals and other online sales, so she has no plans to venture into stores Friday, she said.
“And I’m not standing in line for a TV. … I love looking at stuff. I just don’t feel the need to be there on Black Friday,” she said.
Nationwide retail spending in November and December is expected to grow between 2.5% and 3.5% to between $979.5 billion and $989 billion compared to the to $955.6 billion spent during the two-month period last year, according to the National Retail Federation, a Washington, D.C.-based trade group.
Last year, holiday sales increased 3.9% from the 2022 season.
This year's NRF forecast is in line with the pre-pandemic average annual holiday increase of 3.6% from 2010 to 2019, according to the trade group, which does not adjust its numbers for inflation.
The annual period of shopping online and in stores between Thanksgiving and Cyber Monday is considered a bellwether for how the entire holiday season will perform. But the five-day span has declined in significance as retailers offer deals earlier, such as Amazon Prime Days, Walmart’s Holiday Deals, and Target Circle Week in October, and with Macy’s and other merchants holding Black Friday events in July, retail experts said.
The most popular day for shopping during the holiday season this year will still be Black Friday, followed by Dec. 21, or Super Saturday, which is the last Saturday before Christmas, and Dec. 23, according to Sensormatic, a retail technology provider based in Boca Raton, Florida.
The first day of Hanukkah falls on Christmas this year.That likely means Black Friday weekend will be bustling at sister stores Denny’s and Lester’s, said Jeffrey Klein, a co-owner of the Plainview-based family business, which sells clothing and accessories.
“If Hanukkah was early, I would have already had two weeks of good sales, Klein said. "But because Hanukkah is two weeks later, the sales will start now.”
His family's company owns nine Denny’s and two Lester’s in the New York metro area and Florida.
This holiday season, the apparel category nationwide will see spending increases, as shoppers have grown their spending on clothes above the rate of inflation, said John Mercer, head of global research in the London office of Coresight Research, a Manhattan-based retail analysis provider.
But consumers are expected to continue pulling back on spending on home goods because of the weak housing sales market, as well as on big-ticket items, such as electronics and appliances, he said.
However, November sales have been strong at AHC Appliances in Cedarhurst, said owner Sandy Tau, who opened the store in 1998. Washers and dryers have been the bestsellers this month, and she expects them to sell the best this weekend.
Across the retail appliance industry, the entire month of November has become an important month for sales because manufacturers have continued to reduce prices earlier than Black Friday, she said.
“It used to be Black Friday," Tau said. "Now, it’s Black November.”
Online sales will continue to take a bigger share of holiday spending, which is also cutting into the significance of Black Friday weekend. The fourth-quarter share of holiday shopping that took place online rose from 19.9% in 2019 to 26.6% in 2023, according to S&P.
U.S. online sales are projected to hit a record high of $240.8 billion in November and December, an 8.4% increase over the two-month period last year, according to Adobe, a San Jose, California-based software company.
Among the bestselling toys online so far this month are Lego Harry Potter, Pokémon trading cards, X Shot Insanity foam dart toy and Tonie Audio Play Figurines, while the top-selling gaming consoles online are the Xbox Series X, PlayStation 5, and Nintendo Switch OLED were top selling gaming consoles, according to Adobe.
Other hot sellers include a Dyson Airwrap Limited Edition hairstyling wand in strawberry bronze, Bluetooth speakers, fitness trackers, smart watches, pickle ball paddles, and skincare sets, according to Adobe.
Long Island and national retailers will roll out discounts on Black Friday, hoping to draw customers to the unofficial kickoff of the holiday shopping season.
Yet holiday retail spending is expected to grow modestly this year with consumers still shell-shocked over recent years’ soaring inflation, retail experts said.
The U.S. inflation rate has fallen after soaring to a 41-year high of 9.1% in June 2022. The rate in October rose modestly to 2.6% compared to the same month last year.
Even with prices coming down in general, or an expectation that they will, consumers contending with “inflation fatigue” will spend cautiously and look for deals this holiday season, said Lauren Slade, retail director at S&P Global Ratings in Manhattan.
WHAT NEWSDAY FOUND
- Holiday retail spending is expected to grow modestly this year, as consumers still shell-shocked over recent years’ soaring inflation, which has slowed, spend cautiously, retail experts said.
- The annual period of shopping online and in stores between Thanksgiving and Cyber Monday is considered a bellwether for how the entire holiday season will perform but the five-day span has declined in significance as retailers offer deals earlier, experts said.
- The most popular day for shopping during the holiday season this year will still be Black Friday, followed by Dec. 21, or Super Saturday, which is the last Saturday before Christmas, and Dec. 23, according to Sensormatic.
“Value perception will be key. We expect some of the … better-positioned sectors would be value-oriented sectors like discounters, big-box retailers, like a Walmart, other off-price names that are better positioned to meet demand for budget conscious shoppers,” she said.
Walmart, the nation’s biggest retailer, raised its sales projections for the fourth quarter as a growing number of households earning over $100,000 are drawn to the stores’ discounted prices, particularly on groceries.
But some larger retailers are already signaling that this holiday season won’t be rosy.
Last week, Target lowered its fourth-quarter sales forecast and expects sales to be flat at stores open for at least one year, as consumers cut back on discretionary spending.
Target had gotten feedback from consumers who said their budgets were stretched and that they were shopping carefully "to overcome the cumulative impact of multiple years of price inflation," CEO Brian Cornell told analysts during a Nov. 20 earnings call.
"They're becoming increasingly resourceful in their shopping behaviors, waiting to buy until the last moment of need, focusing on deals, and then stocking up when they find them,” he said.
High prices are a cause for concern for Huntington resident Kevin O’Connell, who said he might venture into Costco on Black Friday to buy a few items, such as printer ink and batteries.
“I think everyone has to temper their needs to some degree,” said O'Connell, 78. “I mean everything is so expensive. I was just online looking at the ink. It’s like $40 for one cartridge.”
Huntington resident Lauren Wendelken, 63, only shops in stores on Black Friday if they are offering exceptional deals, she said.
She started her Christmas shopping for her family weeks before Black Friday, taking advantage of Amazon Prime deals and other online sales, so she has no plans to venture into stores Friday, she said.
“And I’m not standing in line for a TV. … I love looking at stuff. I just don’t feel the need to be there on Black Friday,” she said.
Nationwide retail spending in November and December is expected to grow between 2.5% and 3.5% to between $979.5 billion and $989 billion compared to the to $955.6 billion spent during the two-month period last year, according to the National Retail Federation, a Washington, D.C.-based trade group.
Last year, holiday sales increased 3.9% from the 2022 season.
This year's NRF forecast is in line with the pre-pandemic average annual holiday increase of 3.6% from 2010 to 2019, according to the trade group, which does not adjust its numbers for inflation.
'Now, it's Black November'
The annual period of shopping online and in stores between Thanksgiving and Cyber Monday is considered a bellwether for how the entire holiday season will perform. But the five-day span has declined in significance as retailers offer deals earlier, such as Amazon Prime Days, Walmart’s Holiday Deals, and Target Circle Week in October, and with Macy’s and other merchants holding Black Friday events in July, retail experts said.
The most popular day for shopping during the holiday season this year will still be Black Friday, followed by Dec. 21, or Super Saturday, which is the last Saturday before Christmas, and Dec. 23, according to Sensormatic, a retail technology provider based in Boca Raton, Florida.
The first day of Hanukkah falls on Christmas this year.That likely means Black Friday weekend will be bustling at sister stores Denny’s and Lester’s, said Jeffrey Klein, a co-owner of the Plainview-based family business, which sells clothing and accessories.
“If Hanukkah was early, I would have already had two weeks of good sales, Klein said. "But because Hanukkah is two weeks later, the sales will start now.”
His family's company owns nine Denny’s and two Lester’s in the New York metro area and Florida.
This holiday season, the apparel category nationwide will see spending increases, as shoppers have grown their spending on clothes above the rate of inflation, said John Mercer, head of global research in the London office of Coresight Research, a Manhattan-based retail analysis provider.
But consumers are expected to continue pulling back on spending on home goods because of the weak housing sales market, as well as on big-ticket items, such as electronics and appliances, he said.
However, November sales have been strong at AHC Appliances in Cedarhurst, said owner Sandy Tau, who opened the store in 1998. Washers and dryers have been the bestsellers this month, and she expects them to sell the best this weekend.
Across the retail appliance industry, the entire month of November has become an important month for sales because manufacturers have continued to reduce prices earlier than Black Friday, she said.
“It used to be Black Friday," Tau said. "Now, it’s Black November.”
Online sales will continue to take a bigger share of holiday spending, which is also cutting into the significance of Black Friday weekend. The fourth-quarter share of holiday shopping that took place online rose from 19.9% in 2019 to 26.6% in 2023, according to S&P.
U.S. online sales are projected to hit a record high of $240.8 billion in November and December, an 8.4% increase over the two-month period last year, according to Adobe, a San Jose, California-based software company.
Among the bestselling toys online so far this month are Lego Harry Potter, Pokémon trading cards, X Shot Insanity foam dart toy and Tonie Audio Play Figurines, while the top-selling gaming consoles online are the Xbox Series X, PlayStation 5, and Nintendo Switch OLED were top selling gaming consoles, according to Adobe.
Other hot sellers include a Dyson Airwrap Limited Edition hairstyling wand in strawberry bronze, Bluetooth speakers, fitness trackers, smart watches, pickle ball paddles, and skincare sets, according to Adobe.
Tory N. Parrish covers retail and small business for Newsday. She has worked at the Pittsburgh Tribune-Review and Observer-Dispatch in Utica, N.Y.
Updated 9 minutes ago Forecast for Thanksgiving travel, weather ... Car hits West Babylon house ... Drought effect on LI ... Getting ready for big parade
Updated 9 minutes ago Forecast for Thanksgiving travel, weather ... Car hits West Babylon house ... Drought effect on LI ... Getting ready for big parade
