Americans across the nation began lining up in the early hours of the morning for a chance to splurge on sales, which are expected to rise up to four percent on last year – despite credit card balances being at a 10-year high.
Retailers kicked off the unofficial start of the holiday shopping season on Friday with a bevy of discounts and other enticements. But executives are growing concerned over a spending slowdown that could temper sales on the day after Thanksgiving as well as throughout the holidays.
The National Retail Federation, the nation’s largest retail trade group, expects shoppers will spend more this year than last year, but that the pace will slow given all the economic uncertainty. The group has forecast that U.S. holiday sales will rise 3 to 4 percent for November through December, compared to 5.4 percent growth of a year ago.
Still, shoppers were out in force on Friday before the sun rose, with long lines outside of shopping malls in New York, Florida, Kentucky, Tennessee, and Washington D.C., among others.
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 (NRF) estimated.
Shoppers enter Macy’s department store during Black Friday shopping in Manhattan
People wait in line to make purchases during Black Friday deals at JCPenney department store at Roosevelt Field mall in Garden City, New York
People shop at Mall of America for Black Friday deals in Bloomington, Minnesota
U.S. shoppers plan to spend an average of $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 NRF.
But consumers are now coming under more pressure from dwindling savings, increased credit card debt and still stubborn inflation. In fact, shoppers cut their buying in October, ending six straight months of gains.
With many consumers 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.
Shoppers have had some relief from easing inflation, but many goods and services such as meat and rent are still far higher than they were just three years ago.
Shoppers were out early in Viera Super Target in Florida for door bluster Black Friday deals
Anna Cowan was first in line and first to check out at the Viera Super Target
The latest quarterly results from a string of retailers from Walmart to Best Buy have reported a weakening consumer. Walmart said it noticed shoppers cutting back in October and offered a muted annual sales outlook.
Best Buy, the nation’s largest retailer, said shoppers are trading down to cheaper TVs. And Target said shoppers are waiting longer to buy items. For example, instead of buying sweatshirts or denim back in August or September, they held out until the weather turned cold.
‘It’s clear that consumers have been remarkably resilient,’ Target’s CEO Brian Cornell told analysts last week. ‘Yet in our research, things like uncertainty, caution and managing a budget are top of mind.’
Meanwhile, online discounts should be better than a year ago, particularly for toys, electronics and clothing, according to Adobe Analytics, which tracks online spending.
Shoppers line up in front of supermarket for Black Friday deals in the early hours of the morning in New Jersey
New Yorkers are seen shopping at Macy’s
Shoppers wait to enter Macy’s department store in Manhattan before daylight broke on Friday
It predicts toys will be discounted on average by 35 percent, compared with 22 percent a year ago, while electronics should see 30 percent cuts, compared with last year’s 27 percent. On clothing, shoppers will see an average discount of 25 percent, compared with 19 percent last year, Adobe said.
Analysts consider the five-day Black Friday weekend — which includes the Monday after the holiday known as Cyber Monday — a key barometer of shoppers’ willingness to spend.
Black Friday is expected to be once again the busiest shopping day of the year, according to Sensormatic Solutions, a firm that tracks store traffic. On average, the top 10 busiest shopping days in the U.S are expected to once again account for roughly 40percent of all holiday retail traffic, Sensormatic said.
Stores have been increasingly pushing Black Friday-type deals all month to help perk up business.
Adobe Analytics reported that from November 1 through Monday, consumers spent $63.2 billion online, up 5 percent compared with the year-ago period and outpacing its estimate of 4.8 percent for the two-month holiday period.
Black Friday is expected to be once again the busiest shopping day of the year. New Yorkers are seen at Macy’s in New York City
Shoppers wait in line for a store to open at Twelve Oaks Mall in Michigan
Americans look at clothes inside a store at Twelve Oaks Mall in Novi, Michigan
The Black Friday tradition began in the U.S. but has gone global, as well as moving online.
In France, Italy, and Spain, most shoppers planned to buy clothing on Black Friday, with electronic goods coming second, according to a PwC survey. On average, shoppers in France planned to spend 295 euros ($322), PwC found, with 65% of purchases expected to be made online.
In the UK, transaction volumes were up just 1.4 percent in the week to Wednesday compared to a year ago, according to Barclays, a bank that sees nearly half the country’s credit and debit card transactions.
‘Recently, Black Friday hasn’t been the greatest,’ said Naomi Ojomo as she browsed for dresses in a Zara (ITX.MC) store in Canary Wharf in east London, adding that discounts are less enticing due to many other sales throughout the year.
A person picks out clothing as retailers compete to attract shoppers and try to maintain margins on Black Friday at Woodbury Common Premium Outlets in Central Valley, New York
Black Friday shoppers wait in line to go into a Gucci store at Woodbury Common Premium Outlets in Central Valley, New York
Black Friday shoppers walk to stores at Woodbury Common Premium Outlets in Central Valley, New York
The rise of online shopping has reduced the importance of Black Friday as a single-day event. Retailers from Macy’s to Amazon now launch deals as early as October, and often offer additional discounts closer to Christmas, Macy’s CEO Jeff Gennette told investors this month.
Shoppers spent a record $5.6 billion online on Thanksgiving Day, data from Adobe Analytics showed, a 5.5 percent increase in online spending compared to last year, in line with projections.
Thanksgiving Day discounts online peaked at about 28 percent for toys, while electronics had discounts as steep as 27 percent, Adobe said. Barbie dolls, Marvel action figures, Playstation 5 and video game Call of Duty: Modern Warfare III were hot sellers.
Adobe expects Black Friday to have the best deals on televisions, with discounts of 22 percent. Clothing, appliances, sporting goods and furniture will also have deep discounts but prices will go even lower by Cyber Monday.