Retailers Offer Deep Black Friday Discounts to Lure Shoppers

November 24, 2023, 08.41 PM | Source: Reuters
Retailers Offer Deep Black Friday Discounts to Lure Shoppers

ILUSTRASI. A shopper exits a store during Black Friday sales in the Manhattan borough of New York City, New York, U.S.

RETAIL SALES - NEW YORK. Retailers around the world are hoping millions of shoppers will take advantage of Black Friday discounts in the kickoff to the key holiday shopping season, against a backdrop of financial pressure on households in the U.S., Europe and elsewhere.

With many consumers squeezed by persistent inflation and higher interest rates, U.S. holiday spending is expected to rise at the slowest pace in five years. Most major retailers slashed their seasonal hiring.

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. The event is known for crowds lining up at big-box stores at dawn to scoop up discounted TVs and home appliances.

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 a line of shoppers outside Macy's flagship store in Manhattan, Hannah Lusk, from Kentucky, who was visiting New York for Christmas, said she plans to spend the same as last year, adding that "it depends on what we need," as shopping has become more expensive.

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.

In France, Italy, and Spain, most shoppers planned to buy clothing on Black Friday, with electronic goods coming second, according to a PwC survey. On average, shoppers in France planned to spend 295 euros ($322) on Black Friday, the survey found, with 65% of purchases expected to be made online.

In the UK, spending was up just 1.4% in the week to Wednesday compared to the same period last year, according to data from Barclays, a bank that sees nearly half the country's credit and debit card transactions.

"Consumers are still being very cautious, so if holiday sales do go up, we think it will be due to inflation raising prices," said Jessica Ramirez, a senior research analyst at Jane Hali & Associates.

The rise of online shopping has reduced the importance of Black Friday as a single-day event. Retailers from Macy's to Amazon now launch deals as early as October, and often offer additional discounts closer to Christmas, Macy's CEO Jeff Gennette told investors this month.

To be sure, some retailers hold their biggest markdowns for the Thanksgiving holiday weekend, and big-box players including Walmart, Lowe’s and Home Depot maintained or deepened their advertised discounts.

Whether those deals will persuade inflation-weary consumers to open their wallets is the biggest worry for retailers on Friday. Some of the top-selling products on previous Black Fridays have been hit hardest by the downturn in discretionary spending, said Mari Shor, a senior equity analyst at Columbia Threadneedle Investments.

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Best Buy, for instance, 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 still holding off on big-ticket purchases.

Shoppers in a Walmart in Raleigh, North Carolina, skipped over the toy aisle for electronics and kitchen appliances on Black Friday, opting for deals on televisions and Keurig coffee machines over Barbies and Hot Wheels.

Arrielle Boone, a mother of six boys, was browsing a Raleigh Target for AirPods, portable speakers and electronics for her kids. She said she’s expecting to spend “a little more” because she’s noticing higher prices on products.

“It seemed like there were better deals earlier in the week,” Boone said.

A downturn in luxury spending has also prompted department stores including Bergdorf Goodman and Nordstrom to offer steep discounts on items such as Balenciaga shoes and Oscar de la Renta earrings.

British retailer Argos said the PlayStation 5 gaming console, Beats wireless headphones, and Apple AirPods were among its top-selling products on Black Friday so far.

Amazon workers came out on strike at multiple locations across Europe on Friday as protests against working practices picked up pace. "Make Amazon Pay", a campaign coordinated by the UNI Global Union, said strikes and protests would take place in more than 30 countries.

Editor: Wahyu T.Rahmawati

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