Shoppers across the country began descending on stores early, with such retailers as Walmart, Target, Best Buy and Macy’s opening their doors by 6 a.m. Activity was mostly calm Friday, though a bomb threat in New Jersey briefly forced the nation’s second-largest mall to evacuate.
Operations resumed at the American Dream Mall in East Rutherford, N.J. after state police and K-9 units conducted sweeps for explosive devices and found none, according to the Associated Press.
Online spending this month has already outpaced projections, according to Adobe Analytics. Americans have been snapping up Squishmallows, Barbies and accessories, Lego sets, Nintendo Switch consoles, headphones, and makeup gift sets, the data show. And, of course, sweaters.
Now, retailers are waiting to see if the momentum will carry into Cyber Monday and through December. The average adult is expected to spend $923 on gifts this year, slightly less than in 2022 but in line with 2019 levels, according to a Gallup poll.
“It’s all going to depend on the discounts,” said Natalie Kotlyar, a retail analyst at BDO. “The big question is: How deep will those discounts need to be and are consumers holding out for those deep discounts?”
Samantha Greenberg, 32, and her extended family used to pile into their cars around midnight to line up for Black Friday. From her grade school years through high school, the game plan every year was the same: Target, Kohls and Old Navy.
“We really did it for the spectacle and the thrill of the experience,” said Greenberg, who works in marketing in Houston for a utility company. The tradition died down when store openings crept earlier, cutting into their Thanksgiving dinner.
Now, Greenberg barely feels the need to shop on Black Friday.
“These deals run on for days and weeks now, so you’re not bound to the same time frame that you were with Black Friday,” she said. “So the thrill is sort of gone.”
Adobe projects the best deals are rolling out now, with the five-day Thanksgiving weekend still promising the steepest discounts, particularly on televisions, apparel, toys and furniture. A Shopify-Gallup poll found that 86 percent of consumers plan to do their holiday — or personal — shopping those days.
Economists and policymakers, meanwhile, are watching for cracks in the exceptional resilience consumers have shown in the face of stubborn inflation, rising debt levels and higher interest rates. Analysts, industry groups and some of the nation’s largest retailers are seeing signs that Americans are scaling back.
Consumer spending this year was buoyed by a hot labor market, wage growth and a cache of savings accrued during the pandemic, said Aditya Bhave, an economist at Bank of America. But in October, hiring cooled and retail sales fell for the first time since March amid a pullback in big-ticket purchases like cars and furniture. Student loan payments also resumed last month.
Meanwhile, the National Retail Federation forecasts that consumers will drop $957.3 billion to $966.6 billion in November and December. That’s 3 to 4 percent higher than last year, but well off the 5.4 percent bump recorded in 2022. Moody’s projects even more modest growth, of 1 to 3 percent.
“Consumer confidence has weakened,” said Chedly Louis, a retail analyst and vice president at Moody’s, adding that there’s a lot of uncertainty in the macroeconomic environment and “consumers don’t like that.”
So far, online sales have surpassed Adobe’s forecasts. From Nov. 1 to Nov. 20, they climbed 5 percent year over year, to $63.2 billion. The analytics company projected 4.8 percent growth over the season. Almost half of those purchases were made on mobile devices.
“Adobe’s early read on the season shows that despite rising costs elsewhere (student loan repayments, interest rates), consumers are finding great bargains online and willing to spend,” the company said in a news release.
From Thanksgiving through Cyber Monday, Adobe expects shoppers to shell out another $37.2 billion online, 5.4 percent more than last year.
But executives from the nation’s largest retailers — many of which released third quarter earnings this month — are taking a more cautious stance. Best Buy, Lowe’s, and Kohl’s lowered their full-year financial forecasts.
Though Walmart raised its outlook, Chief Financial Officer John David Rainey noted Americans are continuing to pull back on discretionary spending, adding that health, wellness and grocery sales outperformed general merchandise.
Best Buy is anticipating a “customer who is very deals focused” this holiday season, chief executive Corie Barry told investors Tuesday. “We expect shopping patterns will look even more similar to historical holiday periods than they did last year with customer shopping activity concentrated on Black Friday week, Cyber Monday and the last 2 weeks of December.”
While retailers saw some relief on their margins thanks to lower supply chain costs, some are concerned about discretionary categories that haven’t sold as well this year and will need to be offloaded by the spring, Moody’s Chadha said. Categories like apparel, footwear and electronics are often ones consumers put off buying when facing inflationary pressure.
But this could work to the deal-hunting consumer’s advantage this holiday season, Kotlyar said. They’re shopping with more intention this year.
“They’re not necessarily being impulsive because they don’t have the wallet to be impulsive today,” she said. “They’re going in with the intention to buy if the right discount is there.”
