Inflation Is a Big Worry for Black Friday Shoppers

Black Friday marks a return to familiar holiday shopping patterns, but inflation is weighing on consumers. Elevated prices for food, rent, gasoline, and other household costs have taken a toll on shoppers. As a result, many are reluctant to spend unless there is a big sale and are being more selective with what they will buy—in many cases, trading down to cheaper stuff and less expensive stores, the AP reports. Shoppers are also dipping more into their savings, turning increasingly to "buy now, pay later" services like Afterpay that allow users to pay for items in installments, as well as running up their credit cards at a time when the Federal Reserve is hiking rates to cool the US economy.

Isela Dalencia, who was shopping for household essentials like detergent at a Walmart in Secaucus, New Jersey, earlier this week, said she's delaying buying holiday gifts until Cyber Monday—the Monday after Thanksgiving—when online sales rev up. Then, she will wait again until the week before Christmas to get the best deals, unlike last year when she started buying before Black Friday. "I am shopping less,” Dalencia told the AP, noting she will spend about $700 on holiday gifts this year, one-third less than last year. This year's trends are a contrast from a year ago when consumers were buying early out of fear of not getting what they needed amid clogs in the supply network. Stores didn't have to discount much because they were struggling to bring in items.

But some pandemic habits are sticking around. Many retailers that closed stores on Thanksgiving Day and instead pushed discounts on their websites to thin out crowds at stores are still holding onto those strategies, despite a return to normalcy. Many moved away from doorbusters, the deeply marked-down items offered for a limited time that drew crowds. Against today's economic backdrop, the National Retail Federation—the largest retail trade group—expects holiday sales growth will slow to a range of 6% to 8%, from the blistering 13.5% growth of a year ago. However, these figures, which include online spending, aren't adjusted for inflation so real spending could even be down from a year ago.

(More Black Friday stories.)