Holiday shopping kicks off with inflation dampening spirits

Nov 23, 2022, 5:16 PM | Updated: Nov 24, 2022, 7:29 am
Shoppers exit a Claire's accessories store advertising sales ahead of Black Friday and the Thanksgi...

Shoppers exit a Claire's accessories store advertising sales ahead of Black Friday and the Thanksgiving holiday, Monday, Nov. 21, 2022, in Miami. Retailers are ushering in the start of the holiday shopping season on the day after Thanksgiving, preparing for the biggest crowds since 2019. (AP Photo/Rebecca Blackwell)

(AP Photo/Rebecca Blackwell)

NEW YORK (AP) — While Black Friday will mark a return to familiar holiday shopping patterns, uncertainty still remains.

The U.S. job market remains strong, consumer spending is resilient and inflation has been slowing. But elevated prices for food, rent, gasoline and other household costs have taken a toll on shoppers.

As a result, many are reluctant to spend unless there is a big sale and are being more selective with what they will buy — in many cases, trading down to cheaper stuff and less expensive stores.

Shoppers are also dipping more into their savings, turning increasingly to “buy now, pay later” services like Afterpay that allow users to pay for items in installments, as well as running up their credit cards at a time when the Federal Reserve is hiking rates to cool the U.S. economy.

Such financial hardships could help drive shoppers to look for bargains.

Isela Dalencia, who was shopping for household essentials like detergent at a Walmart in Secaucus, New Jersey, earlier this week, said she’s delaying buying holiday gifts until Cyber Monday — the Monday after Thanksgiving — when online sales rev up. Then, she will wait again until the week before Christmas to get the best deals, unlike last year when she started buying before Black Friday.

“I am shopping less,” Dalencia said, noting she will spend about $700 for holiday gifts this year, one-third less than last year.

Katie Leach, a social worker in Manhattan, was also browsing the aisles at Walmart but said she will start holiday shopping during the first week of December as usual. This time, however, she’ll be relying more on bargains, her credit card and “buy now, pay later” services to get her through the shopping season because of surging prices on food and other household expenses.

“The money is not going as far as last year,” Leach said.

This year’s trends are a contrast from a year ago when consumers were buying early out of fear of not getting what they needed amid clogs in the supply network. Stores didn’t have to discount much because they were struggling to bring in items.

But some pandemic habits are sticking around. Many retailers that closed stores on Thanksgiving Day and instead pushed discounts on their websites to thin out crowds at stores are still holding onto those strategies, despite a return to normalcy.

Major retailers including Walmart and Target are again closing their stores on Thanksgiving. And many moved away from doorbusters, the deeply marked down items offered for a limited time that drew crowds. Instead, the discounted items are available throughout the month, on Black Friday or the holiday weekend.

Against today’s economic backdrop, the National Retail Federation — the largest retail trade group — expects holiday sales growth will slow to a range of 6% to 8%, from the blistering 13.5% growth of a year ago. However, these figures, which include online spending, aren’t adjusted for inflation so real spending could even be down from a year ago.

Adobe Analytics expects online sales to be up 2.5% from Nov. 1 through Dec. 31, a slowdown from last year’s 8.6% pace when shoppers were uncertain about returning to physical stores.

Analysts consider the five-day Black Friday weekend, which includes Cyber Monday, a key barometer of shoppers’ willingness to spend, particularly this year. The two-month period between Thanksgiving and Christmas represents about 20% of the retail industry’s annual sales.

While Black Friday still has a strong place in the U.S. among shoppers, it has lost stature over the last decade as stores opened on Thanksgiving and shopping shifted to Amazon and other online retailers. Stores have further diluted the day’s status by promoting Black Friday sales throughout the month. This year, stores began sales earlier than last year to get shoppers to spread out their buying.

Plenty of shoppers like Lolita Cordero from Brooklyn, New York, are sitting out Black Friday.

“I’m shopping early, trying to get things on sale, discount, or clearance – and I use coupons,” Cordero said. “I never did Black Friday. I hear it’s a mess, and people get hurt.”

Still, some experts believe Black Friday will again be the busiest shopping day this year, according to Sensormatic, which tracks customer traffic. Consumers are also back to shopping at physical stores amid easing worries about COVID-19. In fact, more stores opened than closed in the U.S. last year for the first time since 2016 — and that gap is only widening this year, according to Coresight Research, a retail advisory and research firm.

_____

AP Personal Finance Writer Cora Lewis contributed to this report.

____

Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

FILE - A Boeing 747-8, Boeing's new passenger plane, takes its first flight, Sunday, March 20, 2011...
Associated Press

Boeing’s last 747 to roll out of Washington state factory

After more than half a century, Boeing is set to roll its last 747 out of a Washington state factory on Tuesday.
15 hours ago
(AP Photo/Paula Bronstein, File)...
Associated Press

Inslee touts new housing program for Spokane’s homeless

Washington Gov. Jay Inslee was in Spokane Monday to preview the opening of a new housing project for homeless people, calling the Catalyst Project a step toward ending the state’s homelessness crisis.
15 hours ago
FILE - New Orleans Police Supt. Shaun Ferguson addresses the recent uptick in crime during a news c...
Associated Press

Retiring New Orleans chief saw ranks thin, crime rise

NEW ORLEANS (AP) — New Orleans police chief Shaun Ferguson announced his retirement Tuesday after four years punctuated by a disastrous building collapse near the French Quarter, two hurricanes, a pandemic, dwindling police manpower and a violent crime surge that put residents and politicians on edge. Mayor LaToya Cantrell announced Ferguson’s planned yearend departure in […]
15 hours ago
Associated Press

38 women accuse James Toback of sexual misconduct in lawsuit

NEW YORK (AP) — More than three dozen women have filed a lawsuit in New York against writer and director James Toback, accusing him of sexual abuse. The lawsuit, filed in state Supreme Court in Manhattan on Monday, comes after New York state last month instituted a one-year window for people to file lawsuits over […]
15 hours ago
Associated Press

Two Kansas high schools investigate offensive chants at game

Two Kansas high schools are investigating after students at one school reportedly yelled racist and offensive taunts at the other school’s basketball team. Topeka High School’s team was subjected to “racial slurs, threats and disgusting taunts,” during a game on Saturday with Valley Center High School, Coach Geo Lyons said in a Change.org petition. He […]
15 hours ago
Associated Press

Reviews find misuse of COVID-19 hotel stays by prison staff

HARTFORD, Conn. (AP) — There are at least 35 instances where Connecticut Department of Correction employees potentially misused a COVID-19 program that provided workers with hotel rooms during the height of the pandemic, including a staffer who booked a room to attend a wedding, according to continuing state investigations. So far, 14 of the 35 […]
15 hours ago

Sponsored Articles

Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSBA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.
SHIBA WA...

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
Work at Zum Services...

Seattle Public Schools announces three-year contract with Zum

Seattle Public Schools just announced a three-year contract with a brand-new company to the Pacific Northwest to assist with their student transportation: Zum.
Holiday shopping kicks off with inflation dampening spirits