NEW YORK -- 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 such as detergent at a Walmart in Secaucus, N.J., 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 again closed 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 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 past 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 such as Lolita Cordero from Brooklyn, N.Y., 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.
DEAL OR NO DEAL?
Consumers holding out for big deals -- and some much-needed relief from soaring costs on just about everything -- may be disappointed as they head into the busiest shopping season of the year.
While retailers are advertising sales of 30%, 50% and 70% off everything from TVs to gadgets, many items will still cost more than they did last year because of inflation and finding a true bargain may prove to be a challenge.
From September through October, shoppers paid roughly 18% more for furniture and appliances than they did a year ago, according to a recent major data analysis by analytics company DataWeave, which tracks prices for hundreds of thousands of items across roughly three dozen retailers including Amazon and Target. For toys, they paid roughly 2% more.
Things looked a bit better for consumers shopping for clothing -- they paid nearly 5% less compared with last fall, according to DataWeave. Meanwhile, prices held steady for footwear.
"It's just a weird time for everybody to figure out what is the right price, and what is the real price," said Nikki Baird, vice president of strategy of Aptos, a retail technology firm. "Consumers are really bad at discount math, and retailers are fully aware of it and do everything they can to take advantage of it."
William Wang, 24, who teaches high school math, says he's more likely to notice price increases on everyday items -- like his quesadilla that now costs $8 at his local deli -- than for gifts he's going to spend money on once a year.
"I do feel like everything's more expensive," said the Brooklyn resident. "But I mainly keep track of it with small items, like food."
The latest government retail sales report shows retail sales rose last month even when adjusting for inflation. That underscores some resiliency among shoppers heading into the Black Friday weekend, the kickoff to the season.
But cracks are forming.
Third-quarter earnings results from major retailers show shoppers aren't willing to pay full price and waiting for deals. Kohl's, Target and Macy's all noted Americans have also slowed their spending in the past few weeks.
It's a dramatic change from last year's holiday period when shoppers began their holiday items as early as October for fear they wouldn't get what they needed amid pandemic-infused clogs in the supply chain. They were also flush with cash from government stimulus money. Retailers were struggling to bring in items so they didn't need to discount as much.
Michael Liersch, head of advice and planning at Wells Fargo, said this holiday shopping season, it's more likely that things will "appear discounted or feel discounted, or it will seem like there are big offers" but that between inflation and "shrinkflation" -- when manufacturers quietly shrink package sizes without lowering the price -- it's often not the case.
That trend played out in a recent spot check by DataWeave of different items. For example, a Cuisinart two-speed blender, listed at $59.99 but discounted at 25%, was available for $44.99 at grocery chain Fred Meyer. But it was still more expensive than last year's blender, available for $39.99, after a 20% discount off a lower list price of $49.99.
AMAZON PROTESTS
Thousands of Amazon warehouse workers across about 40 countries plan to take part in protests and walkouts to coincide with Black Friday sales, one of the busiest days of the year for online shopping.
Employees in the U.S., U.K., India, Japan, Australia, South Africa and across Europe are demanding better wages and working conditions as the cost-of-living crisis deepens, in a campaign dubbed "Make Amazon Pay." The campaign is being coordinated by an international coalition of trade unions, with the support of environmental and civil society groups.
"It's time for the tech giant to cease their awful, unsafe practices immediately, respect the law and negotiate with the workers who want to make their jobs better," said Christy Hoffman, general secretary for UNI Global Union, one of the campaign's organizers.
Tension with workers has been a long-running issue at the e-commerce giant, which has faced complaints of unfair labor practices as well as employee activism and union drives at some facilities. In what was seen as a watershed moment, workers at a warehouse in Staten Island, N.Y., voted earlier this year to join an upstart union.
"While we are not perfect in any area, if you objectively look at what Amazon is doing on these important matters you'll see that we do take our role and our impact very seriously," Amazon spokesman David Nieberg said.
He cited the company's target to reach net zero greenhouse gas emissions by 2040 and that it's "continuing to offer competitive wages and great benefits, and inventing new ways to keep our employees safe and healthy."
Unions in France and Germany -- CGT and Ver.di -- are spearheading the latest collective action, with coordinated strikes in 18 major warehouses, intended to disrupt shipments across key European markets.
Monika di Silvestre, head of Ver.di's Amazon committee in Germany, said that workers were particularly concerned about the way their productivity was closely monitored by computers, with algorithms determining targets, for example, for the number of packages they need to handle per hour.
"The workers are under a lot of pressure with these algorithms," she said. "It doesn't differentiate between workers, whether they are old or have limited mobility. Workers stay awake at night thinking only of their productivity stats."
She called on European politicians to strengthen labor rights across the bloc. "We don't have a right to strike around Europe -- on the European level," she said.
Information for this article was contributed by Anne D'Innocenzio and Cora Lewis of The Associated Press and by Olivia Solon, Agatha Cantrill and Benoit Berthelot of Bloomberg.
The reflections of passing shoppers are seen in the glass of a Hollister clothing 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)
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)