Bargain hunters ventured out in cold weather to buy Christmas presents on Black Friday, only to find that many US retailers offered smaller price reductions this year with tight supplies.
COVID fears and fewer “doorbuster” sales thinned out crowds the day after the American Thanksgiving holiday, which begins the shopping season at the end of the year.
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On the same day, the World Health Organization called the newly identified omicron variant of the coronavirus a “variant of concern”[ads1];, which triggered worldwide alarm and a sale on the US stock market.
Stores on Black Friday had the lowest level of retail sales for five years or more, Cowen analysts said in a note. Many buyers chose to pick up goods at the front edge instead of going into stores.
Black Friday retail sales are up 29.8% compared to 2020 to 3pm ET, according to Mastercard SpendingPulse.
Consumers spent $ 6.6 billion until 9 p.m. ET Friday, according to the Adobe Digital Economy Index, which expected total spending between $ 8.8 billion and $ 9.2 billion for the day.
Walmart and Target were to outperform other retailers in part because of their buy-online-pick-up-in-store services, Cowen said. Target added more than 18,000 “run-up” parking spaces, more than doubled spaces compared to last year. The company said the most popular Black Friday deals included $ 219.99 for a KitchenAid professional stand mixer that regularly sells for $ 429.99, and savings of up to $ 60 on Apple Watches and AirPods.
Several retailers – including Walmart, Target and Best Buy – are expected to have lower profit margins in the fourth quarter due to tight inventory and higher costs for raw materials, shipping and labor. “While the holiday season should be ok from a sales standpoint – because retailers are discounting less – margins will not necessarily be higher due to inflation,” said Forrester Research analyst Sucharita Kodali.
US consumers enter the holiday season with cash thanks to a continued hefty pile of savings from several rounds of government pandemic assistance and double-digit wage increases when companies compete for workers. Nevertheless, retailers had enticed customers to make holiday purchases already in September this year, because the supply chain has prevented them from quickly replenishing goods at the turn of the year.
A Deloitte survey showed that people had spent 80-85% of their Christmas gift budgets even before Black Friday. For November and December, online sales are estimated to reach a record high of $ 207 billion, up 10% from last year, according to the Adobe Digital Economy Index. The National Retail Federation has predicted combined physical and mortar sales and online vacations of between $ 843.4 billion and $ 859 billion, 8.5% to 10.5% higher than last year.
Elver Gomez, a 21-year-old student in Chicago, said he did not find the Apple and Microsoft laptops he wanted while shopping at a Best Buy store Friday morning. “It seems like this year it’s either sold out” or for sale to what he said was “not so good.” Best Buy added a message on its website warning of “limited qualities” and “no rain control.”
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Electronics – in short supply due to global chip shortages – had the highest sold-out levels, followed by personal care and home and garden, according to Adobe. Throughout most of November, it was sold out in stock up 261% compared to 2019.
(Reporting by Richa Naidu and Arriana McLymore; Further reporting by Lisa Baertlein and Maria Ponnezhath in Bengaluru; Editing by Nick Zieminski and Leslie Adler)