Shoppers took to stores in San Diego in search of deals on a Black Friday that was somewhat smaller than anticipated both locally and nationally compared with prior years — which is not to say that there were no crowds.
The day was punctuated by traffic and inclement weather as shoppers looked for discounted electronics, clothing, and household goods in the kickoff to the holiday shopping season crucial to big retailers.
With many people 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 to avoid inventory gluts at year’s end.
People have already got what they want,” said 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.”
Caution from shoppers — coupled with a strong quarterly performance from discount retailers like Target and Ross Stores — show lingering concern over inflation and a higher cost of living even as fears of a recession recede.
“People are more value conscious,” said Barbara Kahn, a professor at The Wharton School at University of Pennsylvania. “People are spending, but they’re spending more conservatively.”
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 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 National Retail Federation.
The Black Friday tradition began in the U.S. but has gone global, as well as moving online. The rise of online shopping has reduced the importance of Black Friday as a single-day event.
Shoppers spent an estimated $7.3 billion online through 6:30 p.m. Eastern on Black Friday, a 7.4% increase compared with last year, data from Adobe Analytics showed. On Thanksgiving day, they shelled out $5.6 billion online, Adobe said.
“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 The 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.”
Sporadic Protests
Black Friday came at the start of a four-day Israel-Hamas truce. Protesters held sporadic “shut it down for Palestine” demonstrations across the United States.
In Los Angeles, hundreds of pro-Palestine protesters rallied in the Fairfax District, marching through city streets and into The Grove shopping center as part of a nationwide effort demanding an immediate and lasting ceasefire in the Israel-Hamas war, as well as an end to U.S. aid for Israel.
Demonstrators also 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 protesters say is the main sponsor of the Israel Football Association.
Puma said it does not support any political direction, political parties or governments.
Deeper Discounts
Retailers from Macy’s to Amazon launched deals as early as October and are likely to offer additional discounts closer to Christmas, Macy’s CEO Jeff Gennette told investors this month.
Whether those deals will attract inflation-weary consumers is the biggest worry for retailers.
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.
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 8 a.m. to 10 a.m., 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.”
Reuters contributed to this report.