The day after Thanksgiving and its turkey, the Black Friday promotional day is always eagerly awaited by consumers in the United States, but this year they should be more careful than usual before taking out their bank card.
They are “even more concerned and focused on price and discounts” than in previous years, says Vivek Pandya, principal analyst at Adobe Digital Insights.
Inflation, which soared immediately after the Covid-19 pandemic, before slowly slowing, strained their purchasing power.
And, even if the inflation rate has returned to an acceptable level, prices, on the other hand, will not come back down. They are now more than 20% higher on average than in January 2020.
Consumers are therefore hunting for deals and certain brands such as Target supermarkets have, in recent years, started their “Black Friday” promotions from October.
“We are seeing greater price sensitivity from consumers and they are very responsive to promotions and event-related offers,” adds Vivek Pandya.
Black Friday, the day after Thanksgiving Thursday, traditionally kicks off the holiday shopping season in the United States.
It also marks the opening of a long weekend of promotions, with “Small Business Saturday” and “Cyber Monday”.
– Budget “tendu” –
The dissatisfaction of American households with inflation is one of the reasons for Donald Trump's victory in the November 5 election.
And retailers have also had to adapt to this anger.
Thus, Target organizes a week of promotions every quarter which attracts a large number of consumers. But, explained the group's managers, purchases are lower the week before and the week after.
After a long period of inflation, “consumers are telling us their budgets remain tight,” Target CEO Brian Cornell told analysts earlier this month.
“They are becoming more and more inventive in their purchasing behavior, waiting until the last moment to buy, focusing on good deals and stocking up when they find them,” he said.
Gasoline prices, however, have fallen, as well as those of certain food products, economists say, seeing this as welcome support for household wallets.
The National Retail Federation (NRF) forecasts year-end spending growth of between 2.5 and 3.5 percent compared to last year, to reach $989 billion over the two months .
– More competitive online sales –
Households with the lowest incomes were the hardest hit by the inflation episode, but the situation appears to be changing.
“For the first time perhaps since 2021,” when inflation started to rise, “it looks like their real incomes are finally increasing,” said the chief executive of budget clothing retailer Burlington Stores, Michael. O'Sullivan, during a conference call this week.
Some of the chain's strongest sales have been in stores in low-income areas, O'Sullivan noted.
“Over the course of this year, what we saw was that as their real incomes stabilized and started to recover, (these consumers) spent more,” the official added.
And on online sales, the holiday season got off to a flying start, with a jump of 9.6% over the first 24 days of the season, when growth of only 8.4% is forecast for the entire season, Adobe Digital Insights reported Wednesday.
This could be explained by a holiday season that started later this year, with Thanksgiving falling at the very end of November. But more importantly, it reflects how the competitiveness of online products drives down prices, according to Vivek Pandya.
Indeed, the inflation rate for all consumer goods remains above 2%, but Adobe estimates that the prices of goods sold online actually fell 2.9% year-over-year in October.
