NEW YORK (AP) — Retailers ushered in the unofficial start to the holiday shopping season yesterday with bigger crowds than last year in a closer step toward normalcy. But the fallout from the pandemic continues to weigh on businesses and shoppers’ minds.
Buoyed by solid hiring, healthy pay gains and substantial savings, customers are returning to stores and splurging on all types of items. But the spike has also resulted in limited selection across the board as suppliers and retailers have been caught flat-footed.
Shortages of shipping containers and truckers have helped to delay deliveries while inflation continues to creep. The combination of not finding the right item at the right price – in addition to a labour shortage that makes it more difficult for businesses to respond to customer needs – could make for a less festive mood.
Shoppers are expected to pay on average of between five to 17 per cent more for toys, clothing, appliances, TVs and others purchases on Black Friday this year compared with last year, according to senior sector advisor at Allianz Research Aurelien Duthoit. TVs will see the highest price hike on average, up 17 per cent from a year ago, according to the research firm. That’s because whatever discounts available will be applied to goods that are already expensive.
“I think it is going to be a messy holiday season,” said managing director at GlobalData Retail Neil Saunders. ”It will be a bit frustrating for retailers, consumers and the workers. We are going to see long lines. We are going to see messier stores. We are going to see delays as you collect online orders.”
For years, Black Friday has been losing importance. Since 2011, stores jumpstarted the holiday shopping season by opening their doors on Thanksgiving to compete with Amazon and other rising online threats. But the shift merely cannibalised Black Friday sales. The shopping bonanza was further diluted when stores started marketing Black Friday sales for the full week and then later for the month.
The pandemic further diminished the importance of the Black Friday event, though some experts still believe it will again be the busiest day of the year. Last year, retailers started to offer the big holiday sales earlier in October in an effort to spread out shopping for safety reasons and to smooth out online shipping peaks. They also got rid of the Thanksgiving Day in-store shopping event and pushed all their discounts online. This year, retailers are embracing a similar strategy, though they are now pushing holiday discounts in stores as well.
Despite all the challenges, experts believe that sales for the Thanksgiving week and overall season will be strong.
United States (US) retail sales, excluding auto and gas, from this past Monday through Sunday are expected to increase 10 per cent from last year and 12.2 per cent from the 2019 holiday season, according to Mastercard SpendingPulse, which measures overall retail sales across all payment types including cash and check.
Online sales are forecast to increase 7.1 per cent for that week, a slowdown from the massive 46.4 per cent gain in the same period a year ago when shoppers collectively pivoted to the internet instead of shopping in person, according to Mastercard. For the overall holiday season, online sales should increase 10 per cent from a year ago, compared with a 33 per cent increase last year, according to Adobe Digital Economy Index.
Sales on Black Friday are expected to surge 20 per cent from a year ago as store traffic comes back.
For the November and December period, the National Retail Federation, the nation’s largest retail trade group, predicts that sales will increase between 8.5 per cent and 10.5 per cent.
Holiday sales increased 8.2 per cent in 2020 when shoppers, locked down during the early part of the pandemic, spent their money on pyjamas and home goods.