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U.S. retailers are looking to get U.S. consumers to keep spending, as data suggests the Black Friday boom that has driven economic growth is starting to wane. We’re extending our limited Black Friday discount offer into a multi-week sales event.
U.S. retailers like Walmart, Amazon, Target, and Macy’s were already offering big discounts in honor of Black Friday, long before it actually arrived this week.
Despite this, general merchandise sales prices fell 3% year-on-year in the week ending November 16, according to data from Circana, which compiles retail in-store data.
The National Retail Federation predicts that U.S. winter holiday sales will reach nearly $1 trillion in November and December, reaching an all-time high of $902 per person. However, spending is expected to grow by about 2.5% to 3.5%, the slowest rate since 2018.
“We’re seeing this lingering incentive to push the envelope within. [retailers] We can bring in more consumers,” said Gregory Daco, advisor and chief economist at EY Parthenon. “The likely reality this holiday season is that sales will be quite subdued as volumes are increasing, albeit slowly.[retailers have]Pricing power is much lower. ”
Retailers are “trying to incentivize higher-income consumers to buy during this broader period” while “incentivizing lower-income consumers through discounts and various forms of promotions,” he said.
The University of Michigan said in its monthly survey this week that while headline inflation is down from the historic highs of the past few years, consumers “remain extremely dissatisfied with persistently high prices.”
In recent months, consumer spending has been the main driver of strong economic growth in the United States. But sentiment surveys show consumer confidence remains well below its long-term average.
Economists have warned that the prospect of new tariffs under President-elect Donald Trump raises the risk that inflation will pick up again, adding another drag on sentiment.
“Donald Trump returns to White House with Republican majority [probably leads] This is due to higher inflation, slower GDP growth, and higher fiscal deficits,” Roland Fumasi, food and agribusiness analyst at Rabobank, said in a note.
He said that if President Trump were to raise tariffs, “it would lead to a pick-up in inflation and a slowdown in economic growth.”
“The negative impact on growth could be alleviated by tax cuts and deregulation by a Republican Congress. However, this would increase deficits and strengthen inflation, especially in combination with reduced immigration,” he said. added.
Black Friday is one of the busiest times of the year for consumer goods stores, and the period between Thanksgiving and Cyber Monday (the Monday after the holiday when electronics vendors discount their products) is one of retailers’ busiest times of the year. Very important to your bottom line.
Jack Kleinhenz, NRF’s chief economist, said household finances were “in good shape” and were “driving strong spending in the lead-up to the holiday season,” but that “households will be more cautious in their spending.” Deaf,” he said.
Target CEO Brian Cornell told analysts this week that consumers are becoming “increasingly resourceful” in the way they shop, “focusing on items on sale and stocking up when they see them.” He said he was there.
The store group, which disappointed Wall Street this week by predicting flat fourth-quarter sales, ran a three-day “Early Black Friday” promotion in early November. The company launched a promotion called “Black Friday Deals” on Thursday that will last until the end of the month, including half-off items such as Christmas trees and headphones.
Walmart, the world’s largest retailer, launched the first of its two-week “Black Friday Deals” event on November 11th. The second event begins on Monday and offers discounts on TVs, iPhones, toys, jeans, among others.
Amazon’s “Black Friday Week” began on Thursday. Home Depot’s “Black Friday Savings” campaign runs from November 7th to December 4th.
Additional reporting by Will Schmidt in New York and Madeline Speed in London
