The holiday shopping season shifts into high gear this week, but Thanksgiving Day and Black Friday sales aren’t likely to have quite the sizzle as in years past.
Many shoppers started earlier this year, mindful of possible inventory shortages stemming from supply chain issues. And with retailer costs rising along with inflation generally, industry analysts have been predicting fewer blockbuster deals centered specifically on Thanksgiving Day, Black Friday, the coming weekend or Cyber Monday.
“There will be some (deep discounts), but they might not be as enticing as in the past,” said Sabrina Helm, an associate professor of retailing and consumer sciences at the University of Arizona. “For certain products, supplies aren’t available, so there will be fewer promotions.”
Many people have gotten the message: Nearly two in five shoppers said they planned to start earlier this season, according to a survey of 4,000 consumers by consultant and professional-services company Deloitte. Retailers have been trying to spread out the season, partly to deal with their own store staffing issues.
Here are some themes to watch for:
Early store hours on Black Friday
A few years ago, it seemed that retailers were battling over who could keep their stores open the longest, including on Thanksgiving Day. That trend around Thursday hours has eased, partly out of concern for keeping employees content at a time when finding adequate staff has been difficult.
Retailers have been “trying to reduce the stress that comes with the holidays,” Helm said.
Most stores won’t be open Thanksgiving Day, although many will extend their Black Friday shopping by several hours.
For example, of 104 national retailers recently tracked by theblackfriday.com, only 14 were planning to open on Thanksgiving Day, and many of those are dollar stores or large drugstore chains. Others planning to operate on Thanksgiving Day, according to the website, include Cabela’s, Bass Pro Shops and Big Lots. However, many retailers planned online sales on turkey day. Many have started already.
According to theblackfriday.com, retailers planning to open at least some of their stores at 5 a.m. on Black Friday include Walmart, Best Buy, Kohl’s and Dick’s Sporting Goods.
Lowe’s, Macy’s, Home Depot and Bed, Bath & Beyond are among chains opening some stores at 6 a.m., while Target and Michaels will follow at 7 a.m.
Outdoor-equipment retailer REI will stay closed Thursday and Friday, as it has in past years.
Of the more than 1,000 consumers surveyed in September by JLL, a real estate and investment services company, many indicated they would spread their shopping around. Nearly 25% of the respondents said they planned to shop on Thanksgiving Day, 51% on Black Friday, 30% over the weekend and 46% on e-commerce focused Cyber Monday.
Shopper disappointments possible
Retail analysts have been warning for months that certain popular gift items could be difficult to find this holiday season. That’s a risk in any year, but supply chain bottlenecks caused by COVID-19 manufacturing shutdowns and temporary port closures make it a special worry now.
In addition, reduced inventory gives retailers less incentive to offer the kind of blowout discounts that shoppers are accustomed to seeing around Black Friday weekend.
It all adds up to potential disappointments for consumers.
“Deeply discounted deals may be harder to find, quantities even more limited than usual and — since fewer sale circulars are being leaked far in advance — planning will be more difficult,” said Edgar Dworsky, founder of Consumer World, a public service consumer-resource guide.
Rather than stake everything on Black Friday, Dworsky said many retailers have been spreading deals throughout November, offering fewer items, charging higher prices and keeping their best Nov. 26 bargains a secret as long as possible.
Support for small businesses
The typical start of the holiday shopping season around Thanksgiving has morphed into various special retail days. There’s Black Friday, of course, which traditionally marks the day, roughly, when retailers finally turn a profit, or go into the black, for the year. There’s also Cyber Monday, which focuses on online sales, and Giving Tuesday, which encourages donations to charities.
There’s also Small Business Saturday, two days after Thanksgiving, the date for focusing on sales of smaller retailers, as promoted initially by American Express. There’s a special emphasis on that this year, given supply-chain bottlenecks, staffing shortages and other challenges, said Chad Heinrich, Arizona state director for the National Federation of Independent Business.
Many small businesses, more than larger ones, have struggled to fill job openings and to get their inventory orders delivered. In a recent national NFIB survey, the percentage of small-business owners expecting better conditions fell to a nine-year low.
Shopping at small retailers helps the local economy more than patronizing larger businesses does, Heinrich argued. “Dollars spent at small, locally owned businesses are not sent to some out-of-state corporate parent,” he said. “Those dollars stay local and support the community.”
Worker safety, health concerns
A few years ago, when more retailers were opening stores on Thanksgiving Day, many employees voiced frustration about not being able to spend time with family members and friends. Now, with retailers easing up on that somewhat, frustration over long hours has given way to other concerns.
Safety and health issues top the list, especially after the smash-and-grab mob looting raid on a Nordstrom store Nov. 20 in northern California.
“Our members are eager to welcome customers back to stores this holiday season, but as incidents of harassment, violence and hate continue to rise in stores, workers are worried about their physical and mental safety,” said Stuart Applebaum, president of the Retail, Wholesale and Department Store Union, which represents 100,000 workers nationally.
Holiday shopping can be stressful in any year, but this time there’s potential for more unease given merchandise and staffing shortages, plus lingering frustration over mask policies and other COVID-19 precautions.
“Retail workers bear the brunt of shoppers’ frustration,” Applebaum said in a prepared statement. “Tempers quickly rise when customers hear that coveted holiday items are stuck on shipping containers at sea . . . especially if they’ve gone to multiple stores only to go home empty-handed.”
Helm at the University of Arizona encourages consumers to shop responsibly in stores with an eye on minimizing complaints and confrontations with employees while heeding social distancing and other health guidelines.
As Applebaum noted, retail workers face heightened stress and pressure this time of year, even in normal times. “Shoppers need to remember what this season is supposed to be all about – kindness,” he said.
A solid season on the horizon
Industry analysts have been expecting good if not record holiday sales marking an uptick from last year but still below the pace of 2019. That still appears to be in the offing with consumers generally appearing to be in the mood to spend.
On an ominous note, consumer confidence has declined in recent months, but it’s “more important to watch what consumers are actually doing with their money, rather than how they feel,” said Ryan Detrick, chief market strategist at LPL Financial.
“Excess savings, rising wages, a strong wealth effect from stock-market gains and high housing values should help to fuel strong spending this holiday season and into next year,” he predicted.
As a case in point, retail sales in October grew at their best pace since March, beating economists’ expectations. That was especially notable now that extended federal unemployment benefits, stimulus payments and many other types of pandemic aid have expired.
“Retail sales have now climbed in six of the past eight months, so far shrugging off worries that consumer demand would drop off,” Detrick said.
However, much of the sales momentum is being driven by upscale consumers. Holiday spending could be flat or down slightly for people at lower-income levels, many of whom continue to struggle.
The overall forecast “is looking better than last year, but it might not be up to the pre-pandemic normal,” Helm said.
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