NEW YORK (AP) — Shoppers hunted for the best deals in stores and online as retailers offered new Black Friday discounts to entice consumers eager to shop for Christmas gifts but weighed down by inflation.
Because of the high prices for food, rent, gasoline, and other necessities, many people were reluctant to spend money unless there was a big sale.
Customers became more selective, opting for cheaper options, saving more and turning to ‘buy now, pay later’ services that allow payment in installments. Some also drained their credit cards at a time when the Federal Reserve is raising interest rates to cool the US economy.
Sheila Diggs, 55, went to a Walmart in Mount Airy, Maryland early Friday to look for a deal on a coffee maker and see what else was in the aisles. She said her family is more careful about their holiday spending this year. Usually all the adults in the family exchanged gifts. But this year everyone is drawing names and choosing one person because things cost so much more, she said.
“Everything goes up except your salary,” says Diggs, who manages medical records at a local hospital.
This year’s trends contrast with a year ago, when consumers bought early for fear of not getting what they needed amid supply network congestion. Stores didn’t have to discount much because they struggled to bring in items.
This year, customers are waiting for the best bargains, said Rob Garf, vice president and general manager of retail at Salesforce, which tracks online sales. He said retailers finally responded this week and introduced more attractive deals online after offering mostly lackluster discounts earlier in the season.
Online discounts were 31% on Thanksgiving, up 7% from the previous year, according to data from Salesforce. The sharpest discounts were in household appliances, general clothing, make-up and luxury handbags. Online sales during the holiday season increased by 9% compared to last year.
“Retailers have finally stepped up the discount game and consumers are responding in kind,” Garf said.
Macy’s Herald Square in Manhattan, which featured discounts such as 60% off fashion jewelry and 50% off select shoes, was bustling with shoppers early Friday.
Traffic was “significantly higher” on Black Friday compared to the previous two years as shoppers become more comfortable in the crowds, said Macy’s CEO Jeff Gennette.
He said the bestsellers from Macy’s online sale, which kicked off last weekend, included 50% off beauty sets. Last year, Macy’s, like many other stores, had supply chain issues and some gifts didn’t arrive until after Christmas.
“At this point, we’re done 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 scrimping last year while still in school. She put herself on a budget for food and gas to cope with inflation, but had already spent $2,000 on holiday gifts and plans to spend a total of $6,000.
“I’m going to touch every floor,” she said. “That’s the plan.”
A Best Buy store in Manhattan had TVs piled high, including Samsung 50-inch TVs marked down to $297, a savings of $82.
Delmarie Quinones, a 30-year-old nurse from the Bronx, was there alone to pick up a laptop and printer she ordered online for $179 — instead of $379 — as part of a Black Friday sale.
Quinones said higher prices for food and other expenses are causing her to reduce her spending from a year ago, when she had money from the government’s child tax credits.
“I can’t have what I used to get,” said the mother of five children, ages 1 to 13. “Even when it came back to school, it was hard to get them essential items.”
Major retailers, including Walmart and Target, stood by their pandemic-era decision to close stores on Thanksgiving Day, moving away from doorbusters and pushing discounts on their websites instead.
But people are still shopping on Thanksgiving – online. Garf said online sales spiked in the evenings during the holidays, suggesting people moved from partying to shopping over the phone. And with holiday travel uphe said a greater share of online shopping this year was on mobile devices.
“The cell phone has become the remote control of our daily lives, and this led to an increase in couch shopping as consumers sat down after Thanksgiving dinner,” Garf said.
Against the current economic backdrop, the National Retail Federation – the largest retail group – expects holiday sales growth to slow to a range of 6% to 8%, down from a blistering 13.5% growth a year ago. However, these figures, including online spending, are not adjusted for inflation, so actual spending may actually be lower than a year ago.
Adobe Analytics expects online sales to grow 2.5% between Nov. 1 and Dec. 31, a slowdown from last year’s 8.6% when shoppers were unsure about returning to brick-and-mortar stores.
Analysts view the five-day Black Friday weekend, including Cyber Monday, as an important 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.
Hadero reported from Mount Airy, Maryland. Olson reported from Arlington, Virginia. Associated Press Personal Finance New York-based writer Cora Lewis contributed to this report.
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