Retailers ready to kick off Black Friday as consumers slowdown on spending

Stores have been kicking off the holiday shopping early this year and will continue to do so on Black Friday even though shoppers seem to slowing down on the spending.

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The National Retail Federation is expecting that shoppers will spend more money this year than last year, according to The Associated Press. However, it says that the pace at which shoppers spend may slow down due to inflation and economic uncertainty.

Walmart said that it has noticed people cut back in spending in October based on the latest quarterly results. People are choosing to buy cheaper items like televisions, Best Buy said. And accoridng to the AP, Target said people are waiting longer periods of time to buy things they may eventually need.

The National Retail Federation says they believe holiday sales in the United States to go up 3% to 4% in November through December, the AP reported. It is a confident pace with the average annual holiday increase of 3.6% which was made between 2010 and before the pandemic in 2019.

“Americans ramped up spending during the pandemic, with more money in their pockets from federal relief checks and nowhere to go during lockdowns. For the holiday 2021 season, sales for the two-month period surged 12.7%,” the AP reported.

“Consumers are still spending, but pressures like higher interest rates, the resumption of student loan repayments, increased credit card debt and reduced savings rates have left them with less discretionary income, forcing them to make trade-offs,” Target CEO Brian Cornell told analysts on a call last week, according to CNBC.

“As we look at recent trends across the retail industry, dollar sales are being driven by higher prices with consumers buying fewer units per trip. In fact, overall unit demand across the industry has been down 2% to 4% in recent quarters, and the industry has experienced seven consecutive quarters of declines in discretionary dollars and units,” he continued, according to CNBC.

“We’re taking a measured approach. There’s been some softening,” said Marc Metrick, CEO of Saks Fifth Avenue’s standalone online business, Saks, according to the AP. “I don’t think (the holiday season) is going to be some horrible business nor is it going to be some kind of explosive holiday season.”