Shopping malls likely will suffer on Black Friday and through the season, because of COVID-19 pandemic restrictions, according to an economic researcher.
Local retailers with an online presence will fare well, though, thanks to online commerce.
“What’s important is that by staying at home people don’t spend as much as they would have under normal circumstances so the savings are much higher than what they would have been otherwise,” said Raymond Sfeir, director of the A. Gary Anderson Center for Economic Research at Chapman University.
“Now the personal savings are over $1 trillion more than at the beginning of the year,” Sfeir said.
In April, the “saving grade” of disposable income was 33.7%, Sfeir said.
“People saved $1 out of $3, that’s huge,” Sfeir said.
By October, the percentage had fallen to 13.6%, “because we’re spending more, people went out more, they started traveling, going to restaurants,” Sfeir said.
“But 13.6% is still extremely high when you’re talking about historical numbers,” Sfeir said.
With that extra cash it’s a good bet shoppers will buy more this holiday season, he added.
“There has been more spending on goods than services” this year, Sfeir said. “Because people are staying at home, they’re ordering online for goods.”
Home prices “are going through the roof,” Sfeir said, adding in September “prices were up by more than 14% compared to the previous year. You don’t see that very often with housing.”
“Our wealth is much higher than what it used to be so that induces people to spend more,” Sfeir said. “I think we’re going to have a good season in November and December.”
Retail sales nationally are 21.6% higher than 2019, Sfeir said.
“That’s a solid increase given what happened in April and May,” Sfeir said.
However, the year has been a tale of two cities for the upper and lower classes, he acknowledged.
“The ones who are unemployed and really hurt are the ones who are getting minimum wage,” Sfeir said. “Those who work in restaurants or cafes or hotels.”
Shoppers though are less likely to go to brick-and-mortar stores this year, Sfeir said.
The rise in coronavirus “will scare people from going to the mall. I don’t think the malls will do very well this year,” Sfeir said.
Shannon Campbell, a spokeswoman for the District at Tustin Legacy in Tustin, said the shopping center still will offer a festivities for patrons. She concedes Black Friday will be different this year as many outlets offered deals all month to discourage the crowds that usually converge on stores the day after Thanksgiving.
“I’m sure we’ll see a lot of people come out on Black Friday because it’s drilled into us, but I don’t think the deals will be any different on Black Friday.”
– City News Service