NEW YORK (AP) – Shoppers scoured stores and online for the best deals as retailers offered new Black Friday discounts to lure consumers eager to start holiday gift shopping but hit by inflation.
Due to the high prices of food, rent, gas and other basic items, many people were reluctant to spend unless there was a big sale.
Shoppers were being more selective, selecting cheaper options, dipping deeper into savings and turning to “buy now, pay later” services that allow installment payments. Some were also using their credit cards at a time when the Federal Reserve is raising rates to cool the US economy.
Sheila Diggs, 55, went to a Walmart in Mount Airy, Maryland early Friday, looking for a deal on a coffee maker and seeing what else was in the aisles. She said her family is being more cautious with their holiday spending this year. Usually, all the adults in the family exchanged gifts. But this year, everyone draws names and selects a person, because things cost a lot more, he said.
“Everything is going down minus your salary,” said Diggs, who manages medical records at a local hospital.
This year’s trends contrast with those of a year ago, when consumers were buying early for fear of not getting what they needed amid supply grid bottlenecks. Stores didn’t have to discount much because they were struggling to carry items.
This year, shoppers are looking for the best deals, said Rob Garf, vice president and general manager of retail at Salesforce, which tracks online sales. He said retailers finally responded this week, introducing more attractive offers online after offering mostly lackluster discounts earlier in the season.
Online discount rates were 31% on Thanksgiving, up 7% from a year earlier, according to Salesforce data. The biggest discounts were on appliances, general clothing, make-up and luxury handbags. Online sales during the holidays were up 9% over last year.
“Retailers have finally stepped up their discount game, and consumers are responding in kind,” Garf said.
Macy’s Herald Square in Manhattan, where discounts included 60 percent off fashion jewelry and 50 percent off select shoes, was packed with shoppers early Friday.
Traffic was “significantly higher” on Black Friday compared to the previous two years because shoppers feel more comfortable in the crowds, Macy’s CEO Jeff Gennette said.
She said bestsellers in Macy’s online sale, which began last weekend, included 50 percent off beauty sets. Last year Macy’s, like many other stores, had supply chain issues and some of the gifts didn’t arrive until after Christmas.
“Now we’re set and ready to go,” he said.
Sophia Rose, 40, a respiratory specialist visiting Manhattan from Albany, New York, was headed to Macy’s with big plans to splurge after cutting last year while still in school. She budgeted for food and gas to keep up with inflation, but she had already spent $2,000 on holiday gifts and plans to spend a total of $6,000.
“I’ll hit every floor,” he said. “That’s the plan.”
A Best Buy store in Manhattan had TVs piled high, including 50-inch Samsung TVs marked down to $297, a savings of $82.
Delmarie Quinones, a 30-year-old domestic helper from the Bronx, was only there to pick up a laptop and printer she ordered online for $179, down from $379, as part of a Black Friday sale.
Quinones said higher food prices and other expenses are causing her to cut back on her spending from a year ago, when she had money from government child tax credit payments.
“I can’t get what I had before,” said the mother of five, ages 1 to 13. “Even when I went back to school, it was hard to get them the basics.”
Major retailers, including Walmart and Target, stuck with their pandemic-era decision to close stores on Thanksgiving, turning away from doors and instead pushing discounts to their websites.
But people are still shopping for Thanksgiving, online. Garf said online sales spiked in the evening during the holiday, suggesting people switched from dining out to shopping by phone. And with holiday travel on the rise, he said a greater share of online shopping has taken place on mobile devices this year.
“The cell phone has become the remote control of our daily lives, and that led to an increase in couch shopping as consumers settled in after Thanksgiving dinner,” he said. Garf said.
In today’s economic environment, the National Retail Federation, the largest retail trade group, expects holiday sales growth to slow to a range of 6% to 8% from the blistering growth of 13 .5% from a year ago. However, these figures, which include online spending, are not adjusted for inflation, so actual spending could even be down from a year ago.
Adobe Analytics expects online sales to rise 2.5% from Nov. 1 to Dec. 31, a slowdown from last year’s 8.6% pace, when shoppers were unsure back to physical stores.
Analysts consider the five-day Black Friday weekend, which includes Cyber Monday, a key barometer of shoppers’ willingness to spend, especially this year. The two-month period between Thanksgiving and Christmas accounts for about 20% of the retail industry’s annual sales.
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Hadero reported from Mount Airy, Maryland. Olson reported from Arlington, Virginia. Associated Press personal finance writer Cora Lewis in New York contributed to this report.
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