Retailers across the United States are extending Black Friday deals over several weeks, aiming to sustain consumer spending amidst signs of economic slowdown.
Once a single day of frenzied discounts, Black Friday has now evolved into a prolonged sales season, with major retailers such as Walmart, Amazon, Target, and Macy’s offering deep discounts weeks before the traditional shopping day. The move reflects an effort to counteract sluggish sales, with data from Circana showing a 3% year-on-year decline in general merchandise unit sales during the week ending 16 November.
The National Retail Federation (NRF) projects winter holiday sales in the US to reach nearly $1 trillion this year, averaging $902 per person. However, the expected growth rate of 2.5-3.5% marks the slowest pace since 2018. Gregory Daco, chief economist at EY-Parthenon, explains that retailers are broadening the sales window to entice more shoppers. “The likely reality this holiday season is subdued sales growth, with modest increases in volume and reduced pricing power for retailers,” he said.
Retailers are employing a range of strategies to appeal to both low- and high-income consumers. For instance, Walmart launched its first week-long “Black Friday Deals” event on 11 November, followed by a second starting today, featuring discounts on electronics, toys, and apparel. Similarly, Amazon kicked off its “Black Friday Week” last Thursday, and Home Depot’s “Black Friday Savings” runs from 7 November to 4 December. Target, meanwhile, has been offering promotions since early November, with half-price deals on Christmas trees and headphones extending through the month.
Lingering Inflation and Consumer Sentiment
Although inflation has eased from historic highs, many consumers remain frustrated by persistently elevated prices. A recent University of Michigan survey revealed ongoing dissatisfaction, with consumer confidence still below the long-term average. Economists warn that potential policy changes, such as new tariffs under a Republican-led government, could rekindle inflation and dampen economic growth. Roland Fumasi, a food and agribusiness analyst at Rabobank, noted that tariffs could “trigger a rebound in inflation, slowing GDP growth, and increasing budget deficits.”
Despite these challenges, NRF chief economist Jack Kleinhenz remains optimistic, suggesting that healthy household finances could support robust spending this season. However, he cautions that consumers are likely to adopt a more cautious approach, prioritising value and searching for the best deals.
Black Friday’s Critical Role in Retail
The Black Friday period, including Cyber Monday, remains vital for retailers, often determining their annual revenue performance. Brian Cornell, CEO of Target, highlighted a shift in consumer behaviour, observing that shoppers are becoming “increasingly resourceful” by focusing on promotions and stockpiling items when prices drop. This shift reflects a broader trend towards strategic spending amid economic uncertainty.
As the extended Black Friday sales continue, retailers hope the expanded discount period will entice consumers to keep spending and help bolster the economy during the crucial holiday season.
Source: (FT.com)
