* With high prices for food, rent, gasoline and other household expenses weighing on wallets, consumers are being very selective about what they buy. Many shoppers hold back on big purchases like cars, televisions, and appliances.
* The combination of soaring consumer prices, rising borrowing costs and the growing likelihood of a recession in the world’s largest economy weighed on consumer confidence.
* Consumers are feeling much more hesitant given rising inflation and economic concerns, and the retail landscape looks grimmer.
by Xinhua Writers Pan Lijun, Zhang Mocheng
NEW YORK, Dec. 3 (Xinhua) — Black Friday, the Friday immediately following Thanksgiving, usually kicks off an annual sales event in the United States, kicking the shopping season into full swing. Holidays.
This year, however, consumers, strained by record inflation, have become more cautious about their spending.
People shop at a Macy’s store during Black Friday in New York, the United States, Nov. 25, 2022. (Photo by Michael Nagle/Xinhua)
“I’ve had more budget this year than previous years, so I’m paying more attention to pricing right now,” Jennifer Sabin, a sound engineer from New York, told Xinhua on Friday.
“I’m definitely spending less money on everything this year trying to save,” she said as she finished shopping at the flagship Macy’s department store, along with family members Jessick Sabin and Dax Sabin.
With high prices for food, rent, gasoline and other household expenses weighing on wallets, consumers are being very selective about what they buy. Many shoppers hold back on big purchases like cars, televisions, and appliances.
“I’m looking for the best deals,” Jessick said, adding that she’s been looking for ways to save money this year, like “getting refurbished items” instead of new.
The Sabines also said they had no plans to buy any big items, adding “we are working with what we already have currently and we are not going to do anything new at this time”.
“I haven’t done as much shopping as last year” because “everything is so much more expensive this year,” a Washington DC employee who identified herself as Casey told Xinhua.
The 22-year-old said she would ‘rather go on vacation’ to experience things than ‘spend money on things this year’ due to rising prices.
“We don’t really spend a lot…we’re very careful about looking for bargains,” said Rosa, a retired Georgia state real estate agent. “We just buy what we need and not extra stuff.”
People shop at a store during Black Friday in Los Angeles, California, the United States, Nov. 25, 2022. (Xinhua)
A combination of soaring consumer prices, rising borrowing costs and the growing likelihood of a recession in the world’s largest economy weighed on consumer confidence.
“Consumer sentiment is near all-time lows,” Joanne Hsu, director of consumer surveys at the University of Michigan, told Xinhua.
She said consumers are still ready to spend during the holiday shopping season, but they have adapted to high prices by reducing purchases with particularly large price increases and may turn to items cheaper than previous years.
A report from BlackFriday.com found that 70% of shoppers will consider inflation when shopping this holiday season and even more will be looking for deals.
Recent research from Michigan State University found that US consumers report consumer behaviors typically seen during an economic crisis.
Respondents said they expected to spend, on average, about US$700 this holiday season, significantly less than the approximately US$880 spent by consumers in each of the past three holiday seasons, it said. he reveals.
“Consumers think we’re in a recession and they behave accordingly,” Ayalla Ruvio, associate professor at Michigan State University and co-lead of the study, told Xinhua.
“More than half said they were very or extremely worried about inflation,” she said. “They take different measures to minimize the effect of inflation on their holiday shopping, which may result in lower sales during the holiday season.”
People line up for the opening of Black Friday sales at a Walmart store in Skokie, a northern suburb of Chicago, the United States, Nov. 25, 2022. (Photo by Joel Lerner/Xinhua)
Consumers are feeling much more hesitant given rising inflation and economic concerns, and the retail landscape looks bleaker, experts say.
In the current economic environment, many US retailers have leaned in early by starting their holiday sales in the early fall of this year. Amazon held a second Prime Day event in October; others like Walmart and Target have also held competing savings events.
Despite their strenuous efforts to attract consumers, many companies were unsure of the prospects.
In mid-November, Target warned of a bleak outlook for the holiday quarter with soaring inflation hitting sales as it announced plans to save up to $3 billion in price cuts. costs to consolidate its profits.
Overall, apparel companies are cautious about expectations for the fourth quarter, citing an uncertain environment and lower sales in late October and early November.
Forecasts from some trade groups and industry watchers pointed to a tougher holiday ahead for retailers.
The U.S. National Retail Federation expected holiday sales in November and December to rise 6-8% from a year ago, a sharp slowdown from 13.5% growth in 2021. These figures are not adjusted for inflation, which means that actual spending could even be down from a year ago.
Consulting firm Bain & Company predicts nominal growth of 7.5% in holiday retail sales in the United States, while AlixPartners recorded a timid increase of 4% to 7%, which is a decline given of inflation.
“It will be interesting to see if consumers succeed in their spending control plans. If they do, holiday sales will be less than optimal,” Ruvio said.
“A sales increase of less than 8% will indicate a decline in sales taking inflation into account,” she noted.
The US holiday shopping season is considered a key barometer of shoppers’ willingness to spend. The two-month period between Thanksgiving and Christmas accounts for about 20% of annual retail sales. (Video reporters: Pan Lijun, Zhang Mocheng; video editors: Chen Sihong, Huang Aiping, Zhu Jianhui, Ming Dajun, Liu Xiaorui)■