Black Friday sales saw heavy discounts from US retailers to clear inventory backlogs. However, customers’ response was muted, leading to profitability doubts for several chains.
Very few shoppers were seen at Forever 21 and Kay Jewelers at the Centre Mall in Stamford Town in Connecticut. In San Francisco, shoppers were few in Stonestown mall.
According to initial reports by Sensormatic Solutions, in-store traffic increased 2.9% on Black Friday compared to 2021 in a turnaround for brick-and-mortar stores hit by Covid -19 lockdowns.
US consumers continue to spend but are more cautious due to high inflation. They are also looking for sharper deals, with retailers giving out the deepest discounts after misjudging demand and having to deal with a bloated inventory.
Modest Growth
Digital consultancy firm CI&T’s director of retail strategy, Melissa Minkow, said that break-even to modest growth is seen this holiday shopping season. Considering the high inflation rate, this is still positive, with many consumers backing out of Black Friday sales.
Though e-commerce sales rose to $9.12 billion, up 2.3% on Black Friday, the steep discounts will likely hit retailers the hardest, as per Adobe Analytics.
The US inflation rate during the 12 months ending October was 8%. According to Salesforce Inc. average consumer discount was expected to be more than 30% on Black Friday compared to 33% in 2019 and 28% in 2021. The most significant discounts were in health, beauty, apparel, and home appliances.
Lonely Middle
Most of the middle market in New York wore a desolated look. At the same time, at the Crossgates Mall in Albany, higher-end and low-cost retailers saw the most footfall.
At Gap Inc.’s Old Navy store, most items offered 60% discounts, resulting in a massive line with many shoppers returning. The higher-end segment that drew huge crowds included Lululemon Athletica Inc. and Aerie from American Eagle Outfitters Inc., popular with Gen Z consumers. Stores such as Banana Republic, Urban Outfitters Inc. and Macy’s Inc. had only a few shoppers.
Many cars arrived at the Best Buy Co. store close to the Dallas-Fort Worth International Airport and picked up large quantities of electronic goods, including television sets. Another discount mall, Grapevine Mills, was also overcrowded.
The checkout line at the toy section in Stamford’s Macy’s did not have any waiting as cashiers waited for more shoppers. A Walmart store in suburban Dallas had cashiers waiting with no lines.
The pandemic ended the era of Black Fridays, and it seems it is not coming back as more consumers hop online and spread out their spending throughout the year. The moderate crowds include people looking for stuff for daycare centers or gifts for nieces or nephews.
