A mother and her son carry an air conditioning box during a Black Friday, in Caracas, Venezuela November 24, 2023. REUTERS/Leonardo Fernandez Viloria
NEW YORK/LONDON/RALEIGH, N.C. — Shoppers took to stores across the world on a Black Friday that appeared to be subdued compared to prior years, looking for discounted electronics, clothing and household goods in the kickoff to the holiday shopping season crucial to big retailers.
Brokerage TD Cowen lowered its U.S. holiday spending estimate to 2% to 3% growth, from 4% to 5%, as it forecast flat Black Friday traffic. Discounts in October and November removed the excitement and urgency of Black Friday.
“People have already got what they want,” David Klink, senior analyst at Huntington Private Bank, which owns shares of Walmart and Target. “There are only so many big screen TVs and Alexa [Amazon voice assistants] you can buy.”
With many consumers squeezed by persistent inflation and high interest rates, U.S. holiday spending is expected to rise at the slowest pace in five years. Most major retailers slashed their seasonal hiring. Retailers will likely continue to discount throughout the season.
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A record 130.7 million people are expected to shop in stores and online in the U.S. on Black Friday this year, the National Retail Federation (NRF) estimates. But at 6 a.m. on Friday at a Walmart in New Milford, Connecticut, the parking lot was only half full.
“It’s a lot quieter this year, a lot quieter,” said shopper Theresa Forsberg, who visits the same five stores with her family at dawn every Black Friday. She was at a nearby Kohl’s store at 5 a.m.
In Paramus, New Jersey, crowds at the Garden State Plaza mall were thinner than prior years, according to Michael Brown, a partner at consulting firm Kearney, who has checked shopping activity for the past 35 years.
“It wasn’t the good old fashioned kick-the-doors-down-type” shopping event this year, he said. Mall goers “were carrying a bag or two, not the armfuls that you would see in pre-pandemic years. They are not blowing the budget today.”
U.S. shoppers plan to spend an average $875 on holiday purchases – $42 more than last year – with clothing, gift cards and toys at the top of most shopping lists, according to a survey of 8,424 adults conducted in early November by the NRF, a U.S. retail trade group.
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The Black Friday tradition began in the U.S. but has gone global, as well as moving online. And the rise of online shopping has reduced the importance of Black Friday as a single-day event.
Retailers from Macy’s to Amazon launch deals as early as October and offer additional discounts closer to Christmas, Macy’s CEO Jeff Gennette told investors this month.
Shoppers spent a record $5.6 billion online on Thanksgiving Day, data from Adobe Analytics showed, a 5.5% increase in online spending compared to last year, in line with projections.
“I think people are going to still spend on travel and leisure activities that might be online and not necessarily in stores,” said Jimmy Lee, CEO of Wealth Consulting Group which holds Amazon shares.
“The excitement of waiting in lines on Black Friday – there’s not as much of that anymore. A lot of people …. would rather just sit at home and look for deals.”
Whether those deals will attract inflation-weary consumers is the biggest worry for retailers.
FILE PHOTO: Shoppers converge in a Target store ahead of the Thanksgiving holiday and traditional Black Friday sales in Chicago, Illinois, U.S. November 21, 2023. REUTERS/Vincent Alban/File Photo
Deeper discounts
Best Buy is offering between $100 and $1,600 off electronics including laptops, flat-screen TVs and KitchenAid mixers after telling investors this week that shoppers are holding off on big-ticket purchases.
Adobe expects Black Friday to have the best deals on televisions, with discounts of 22%. Clothing, appliances, sporting goods and furniture will also have deep discounts but prices will go even lower by Cyber Monday, it predicts.
A downturn in luxury spending prompted department stores, including Bergdorf Goodman and Nordstrom, to offer steep discounts on items such as Balenciaga shoes and Oscar de la Renta earrings.
On Chicago’s Magnificent Mile, shoppers were unimpressed. Carlos Araejo-Ruiz, 17, hoped for a deal on designer belts at Nordstrom.
“There was an enthusiastic factor when you’re looking forward to jaw-dropping deals. It’s not the equivalent to years before,” he said.
Paul Aheren, 69, who drove from Indianapolis, said he remembered when luxury department stores had markdowns up to 70%.
“At Saks’, if you came in from 8am to 10am, they had a bunch of stuff reduced — you don’t see any of that anymore,” he said. “What they are doing now is clearing the stock they couldn’t sell, I don’t consider that a bargain.”
Sporadic protests
Black Friday came at the start of a four-day Israel-Hamas truce. Protestors held sporadic “shut it down for Palestine” demonstrations across the United States.
Demonstrators staged a die-in at a Dallas mall; in Raleigh, protesters briefly shut down the Crabtree Valley Mall, according to online videos; and in Boston, dozens protested outside a Puma shop, a brand that protestors say is the main sponsor of the Israel Football Association (IFA).
Puma said it does not support any political direction, political parties or governments.