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Retailers will kick off the start of the Christmas shopping season on Friday
Retailers from Walmart to Best Buy have reported weakening consumer sentiment
Still, shoppers across the country lined up before the sun rose on Friday
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Americans across the country are lining up for a chance to spend on sales, which are expected to rise four percent since last year despite credit card balances hitting their highest level in a decade.
Retailers are kicking off the unofficial start of the holiday shopping season on Friday with a slew of discounts and other enticements. But executives are increasingly concerned about a slowdown in spending that could dampen sales on the day after Thanksgiving and during the holidays.
The National Retail Federation, the nation’s largest retail group, expects consumers will spend more this year than last, but that pace will slow given all the economic uncertainty.
The National Retail Federation has forecast U.S. holiday sales to rise 3 to 4 percent from November through December, compared to 5.4 percent growth a year ago.
Still, shoppers were out and about before the sun rose on Friday, with long lines outside malls in New York, Florida, Kentucky, Tennessee and Washington DC, among others.
Shoppers enter Macy’s department store during Black Friday shopping in Manhattan
Shoppers were out early at Viera Super Target in Florida for great Black Friday deals
Anna Cowan was first in line and the first to pay at the Viera Super Target
But consumers are now coming under more pressure from declining savings, increased credit card debt and still-persistent inflation. Shoppers even reduced their purchases in October, ending six straight months of gains.
Shoppers have gotten some relief from easing inflation, but many goods and services, such as meat and rent, are still much higher than they were just three years ago.
The latest quarterly results from a range of retailers, from Walmart to Best Buy, report a weakening consumer outlook. Walmart said it saw consumers cutting back in October and offered a muted annual sales outlook.
Best Buy, the nation’s largest retailer, says consumers are switching to cheaper TVs. And Target said shoppers are waiting longer to purchase items. For example, instead of buying sweatshirts or denim in August or September, they held out until the weather turned cold.
“It’s clear that consumers have been remarkably resilient,” Target CEO Brian Cornell told analysts last week. ‘Yet in our research, issues such as uncertainty, caution and managing a budget are paramount.’
Shoppers wait before daylight Friday before entering Macy’s department store in Manhattan
Meanwhile, online discounts should be better than a year ago, especially for toys, electronics and clothing, according to Adobe Analytics, which tracks online spending.
It predicts that toys will be marked down by an average of 35 percent, compared to 22 percent a year ago, while electronics will be cut by 30 percent, compared to last year’s 27 percent. On clothing, shoppers will receive an average discount of 25 percent, compared to 19 percent last year, according to Adobe.
Analysts consider the five-day Black Friday weekend – including the Monday after the holiday known as Cyber Monday – to be a key barometer of consumers’ willingness to spend money. And Black Friday is expected to once again be the busiest shopping day of the year, according to Sensormatic Solutions, a company that tracks store traffic. On average, the 10 busiest shopping days in the U.S. are again expected to account for about 40% of all holiday shopping traffic, according to Sensormatic.
Stores are pushing more and more Black Friday-type offers throughout the month, boosting sales.
Adobe Analytics reported that consumers spent $63.2 billion online from Nov. 1 through Monday, up 5% from the year-ago period and higher than the 4.8% estimate for the two-month holiday period.