US retailers' efforts to attract holiday gift buyers build to a crescendo this weekend as the "Black Friday" shopping day kicked off with big discounts. The major sales day after Thanksgiving, a custom increasingly adopted in Europe and other markets, comes amid lingering unease over the economy this year.
As a result, markdowns are expected to be especially deep, reflecting the pressure stores are under to lure US consumers jaded by stubborn inflation for some goods and lingering effects from Covid-19 upheaval. "Black Friday" will be followed by the newer "Cyber Monday," as the sector seeks to entice bargain-hunters.
On Friday, crowds swarmed through the doors of the Macy's department store in Manhattan when it opened at 6:00 am (1100 GMT) after a symbolic countdown. Consumers said they were not only looking for deals but happy to soak up the festive atmosphere.
"It's Black Friday, and there's great sales. And there's no place better than Manhattan to go shopping at Christmas time," said shopper Sandee Foster, 74.
Another customer, 30-year-old Cristina Carradero from Puerto Rico, said it was a tradition to go Black Friday shopping with her mother. "We're just having a different kind of version here in New York," she said. In Nantucket, an island off Massachusetts, President Joe Biden went shopping with a stop at a bookstore, which he called a "tradition." Biden and his family make an annual trip to the posh vacation locale for Thanksgiving. Meanwhile, e-commerce giant Amazon was hit by strikes at locations in Britain, Germany and Italy during the annual shopping extravaganza, as workers demand higher wages and better conditions.
Forecasters expect heavy consumer traffic, with the National Retail Federation (NRF) predicting more than 182 million consumers will shop in stores and online over the weekend.
That turnout would top last year's level by 16 million and constitute a record since the trade group began tracking the period in 2017. While Black Friday itself remains crucial, stores have been offering deals for weeks, marketing Black Friday sales earlier in October. The bargains reflect hyper competition among retailers trying to win over consumers inundated with offers in digital spaces. A New York shopper who gave his name only as Raf, 23, said staff were more "aggressive" in promotions than before.
"Consumers will not sit out, but they will spend less," said Randy Allen, senior lecturer at Cornell University. "Retailers are concerned." Especially hot items this holiday season include mainstays like Lego and Hot Wheels, along with Barbie, which is still basking in the afterglow of this summer's blockbuster movie.
Game consoles remain in demand, along with Meta Quest 3, a virtual reality headset, new iPhones and tablets.
Yet, with lingering inflation for groceries and other staples, many shoppers will buy items only if they are on sale. "The shopper will be looking for items they really want and need," said Neil Saunders, managing director of GlobalData. Saunders said retailers "are carefully targeting discounts" instead of "having a promotional free-for-all."
Higher interest costs
The NRF has projected overall holiday sales growth of between three and four percent, which would mark a return to the pre-pandemic trend of more modest increases.
While inflation has slowed from a year ago, interest rates remain high. That can lead to punishing interest costs if consumers don't pay off their credit cards.
Households also have less excess cash compared with a year ago, and those with student loans are back on the hook for interest payments after a moratorium expired.
Although consumers have been bolstered by a strong job market that has kept unemployment under four percent, Allen pointed to recent layoffs and meager bonuses in some high-paying industries. These include banking and technology, "masking" vulnerabilities and potentially weighing on sales.(AFP)