UPDATE: U.S. retailers are gearing up for a crucial Black Friday, as consumer confidence fluctuates amid economic challenges. This year’s event, occurring on November 24, 2023, is expected to reveal whether the holiday shopping season retains its traditional allure.
Black Friday, once synonymous with frenzied in-store crowds and chaotic sales, is evolving. Shoppers are increasingly opting for online deals, with retailers launching discounts weeks before Thanksgiving. Despite this shift, Black Friday remains the most significant shopping day of the year, with millions flocking to stores across the country.
The urgency surrounding Black Friday is heightened this year due to a recent report from The Conference Board, indicating a drop in consumer confidence linked to the federal government shutdown, weak hiring, and persistent inflation. Retail executives are noticing a shift in shopper behavior—while spending continues, consumers are becoming more discerning and focused on finding the best deals.
Bill Adams, chief economist at Comerica Bank, commented on the contradictory nature of consumer sentiment: “Consumers have been saying the economy is terrible while continuing to spend for years now,” he stated. “But business surveys also report consumers are being more sensitive to prices and selective in spending.”
Compounding the situation, retailers have faced challenges due to President Donald Trump’s tariffs on imported goods, leading to increased prices on essential items. Market research firm Circana reported that 40% of general merchandise sold in September experienced price hikes of at least 5%. Toys and baby products saw some of the steepest increases, with 83% of toys sold in September affected.
Despite these hurdles, positive momentum is evident. At the Mall of America in Bloomington, Minnesota, foot traffic has surpassed pre-pandemic levels, according to Jill Renslow, the mall’s chief business development and marketing officer. “We’re seeing a very positive start to the holiday season,” Renslow remarked, highlighting strong visitor numbers on recent Saturdays.
Online shopping also shows robust growth. From November 1 to November 23, consumers spent an impressive $79.7 billion, representing a 7.5% increase from last year, far exceeding Adobe’s forecast of 5.3% growth for the season.
Looking ahead, Mastercard SpendingPulse predicts a 3.6% increase in holiday sales from November 1 to December 24, slightly below last year’s 4.1% rise. “Clearly, there’s uncertainty,” said Michelle Meyer, Mastercard’s Chief Economist. “But at the moment, it doesn’t seem like it’s changing how they are showing up for this season.”
Shopping strategies are also shifting. Adobe Analytics advises that while Thanksgiving Day was the best day to find discounts on sporting goods, Black Friday is the prime time for deals on TVs, toys, and appliances. Cyber Monday will offer the best apparel and computer discounts, with apparel prices expected to drop to 25% off.
As consumers prepare for Black Friday, the juxtaposition of economic anxiety and holiday spending creates a fascinating landscape for retailers. The next few days will be pivotal in shaping the future of retail as businesses adapt to changing consumer behaviors and preferences.
Stay tuned for further updates on Black Friday sales and consumer trends as the holiday shopping season unfolds.
