Bustling crowds and early morning lines were back as this year’s Black Friday weekend kicked off — a hopeful sign for retailers as they head into the critical holiday shopping season with consumers still grappling with inflation and economic uncertainty.
Shoppers plan to spend an average of $650 during the four-day consumer sprint from Black Friday through Cyber Monday, according to a Deloitte survey, up 15% from last year. Eight out of 10 people said they planned to do some sort of shopping during that stretch, when retailers try to jumpstart holiday sales with deals, the survey found.
The National Retail Federation also made encouraging projections, saying it expects as much as $989 billion in sales during the holiday shopping season, which would mark a 3.5% jump over last year’s total.
While that would be a slower pace of growth compared to holiday shopping in previous years, NRF Chief Economist Jack Kleinhenz said, “We remain optimistic about the pace of economic activity and growth projected in the second half of the year.”
“Household finances are in good shape and an impetus for strong spending heading into the holiday season, though households will spend more cautiously.”
While consumers in all income groups plan to spend more than last year, those in the highest and lowest brackets are expected to increase their spending the most, the Deloitte survey found. Shoppers who make $50,000 or less per year plan to spend $422 over the weekend, up 22% from last year, while those who earn $200,000 or more are expected spend $1,257, up 20% from last year, according to the survey.
Spending is expected to be highest among millennials, who are also more likely than other age groups to buy gifts for themselves. They will spend around $750 according to the survey, while baby boomers will spend about $485.
Commerce’s Citadel Outlets was bustling Friday morning, with many families saying they’d been scouring the massive shopping center for hours scouting for deals.
“Honestly, you’ve got to come in with the mentality: It’s Black Friday,” said Gus Aguirre, a Simi Valley barber, who said his family never misses the biggest shopping day of the year. “It’s going to be busy, there are going to be lines, and people are going to be frustrated.”
He said the family tradition is more of a way to work off last night’s meal than get the best deals, which he says don’t feel all that special compared to what’s offered online.
An aerial view shows a packed parking lot at Citadel Outlets in Commerce on Thursday, as early Black Friday shoppers arrive at the mall.
(Jae C. Hong/AP)
“I feel like everybody started earlier in terms of releasing deals,” said Aguirre. “Last year was a little bit more hectic.”
By 9 a.m., he’s walked almost two miles — 5,830 steps, according to his partner’s tracker —and had the shopping bags full of of Christmas gifts to show for it. He said business at his barber shop this year has been better than last, and he’s feeling less pressure to save.
Griselda Maldonado, meanwhile, came to the outlet with a hard spending cap. She and her 14-year-old daughter, Valentina, were going to stay until they spent $300.
They hit it quickly, she said, with the deals proving more lackluster than the family had hoped. Maldonado got some cosmetics and her daughter a jean skirt from Hollister. The 14-year-old said she’d been hoping for Samba shoes from Adidas, but they’d sold out by 6 a.m., when they arrived.
“We’re done,” said Maldonado. “There’s no extra money. This is it.”
Monique Carver and Gilbert McDonald said they were also feeling overwhelmed by the prices, but determined to get through some of their Christmas list — especially tiny Ugg boots for their baby granddaughter. They suspected they could get the same sort of deals during other times of the year, but shopping in person on Black Friday felt “festive.”
“I like hands-on shopping,” said McDonald. “The sales are alright.”
Big-box retailers prepare for months for the day after Thanksgiving, which for many marks the start of the holiday shopping season and serves as an indicator of consumer confidence.
High hopes about the economy, an increase in e-commerce activity and significant Black Friday participation among Gen Z and millennials will contribute to record spending this year, said Summer Taylor, a retail managing director at Deloitte. Shoppers will also have a strong focus on value, she said, and many will prioritize saving money over brand loyalty.
To prepare, major retailers have lined up discounts and offered early sales in the days leading up to Thanksgiving. Walmart unveiled online deals starting Nov. 25, including $250 off a Dyson vacuum and $600 off a Sony television. Target announced discounts beginning Nov. 21, offering 50% off a range of items from holiday decor to toys and appliances.
Consumers nationwide will spend 56% of their holiday budget between Black Friday and Cyber Monday, Deloitte found. Many start spending sooner.
“For the last 10 years or more, Black Friday sales have started creeping in earlier and earlier,” said Lars Perner, a professor of clinical marketing at the USC Marshall School of Business. “It becomes an arms race to offer the big sales sooner,” he said.
Early spending may drive future spending, Perner said, which could bolster retailers trying to unload holiday-themed goods before the end of the season.
“The economy is, to a very large extent, driven by psychology,” Perner said. “When consumers do spend, that tends to spur on the economy.”
Target reported underwhelming third-quarter results earlier this month and lowered their fourth-quarter outlook, while Walmart posted strong sales and a 27% increase in e-commerce.
“Saving money remains a top priority for our customers,” Walmart said in a statement provided to The Times. “We think we’re in a strong position to serve our customers throughout the holiday season.”
Retailers have to walk a fine line between attracting customers with discounts and maintaining healthy margins, said George Noceti, a wealth advisor at Morgan Stanley. Consumers are wary of high prices amid inflation and will shop around to seek out discounts, he said. The Deloitte survey found that 45% of shoppers reported experiencing higher prices for holiday gifts this season.
“The retailers know that they have to promote and discount,” Noceti said. “Those that do will benefit the most by having greater sales, but if they promote and discount too much, they’re going to have lower profitability.”
Noceti said he expects Black Friday sales to be on par or slightly above last year’s numbers. Despite data from Deloitte that shows Angelenos are more optimistic about the economy than last year, the average American consumer is still operating cautiously, he said. Shoppers may be hesitant to spend due to high prices of everyday goods such as groceries and may feel unsure about the economy amid global conflict and the recent election.
“California is different from the rest of the nation,” Noceti said. “Consumer confidence isn’t sky high and people won’t spend their whole wallet on Black Friday.”
Consumers will split their spending evenly between in-person and online purchases, according to the Deloitte survey, but online shopping is growing at a faster rate. While Black Friday foot traffic is expected to remain flat year over year, online spending could rise up to 15%.
The National Retail Federation also expects online sales to climb, saying in its holiday sales report that online and other non-store sales are expected to increase between 8% and 9%.
Online-only merchants are expected to be a popular destination this Black Friday weekend, with 69% of Deloitte survey respondents planning to stay home to shop at online-only retailers. Shoppers will spend an average of $195 on online purchases through Cyber Monday.
Retailers are relying more and more on so-called omnichannel shopping, which allows customers to browse products across in-person and online platforms.
“We aim to engage our customer where they are with an omnichannel strategy that puts product storytelling at the forefront across digital, social and in store,” said Gap Chief Marketing Officer Faby Torres.
Gap’s online platform offers customers Black Friday deals of 50% off sitewide, with some exclusions.
“Black Friday and Cyber Monday are all about value,” said Stephen Rogers, a managing director at Deloitte. “This year, all income levels and age groups are looking for deals. Consumers are relying on this week to stretch their dollars.”