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Inflation Threatens Black Friday Crowds

Black Friday is back, and many retailers are offering door-buster deals. However, some shoppers are skeptical about the quality of the deals being offered.

November 25, 2022
10 minutes
minute read

Black Friday is back, and many retailers are offering door-buster deals. However, some shoppers are skeptical about the quality of the deals being offered.

This year, many Americans are expected to return to brick-and-mortar stores on the Friday after Thanksgiving, as the Covid-19 pandemic recedes and people return to prepandemic habits. This is a reversal of the past two years, when people were largely stuck at home and did more shopping online. However, this year, many household budgets are pinched by high gas and grocery prices.

Retailers are preparing for a big surge on Black Friday, with sales expected to increase significantly compared to last year. According to Mastercard SpendingPulse, which tracks in-store and online retail sales, sales are forecast to rise 15% overall. Physical stores are expected to see an 18% increase in sales, while online sales are expected to rise 3.7%.

"We're finally seeing a return to a more traditional Black Friday this year," said Stephen Lebovitz, chief executive of mall owner CBL & Associates Properties. "It's been a few years since we've seen anything like this, so it's a welcome change."

Many retailers started offering big discounts in October to get rid of excess inventory as supply-chain bottlenecks eased. But some shoppers weren't tempted by the bargains because they were worried about inflation and the economy. Macy's Inc., Kohl's Corp. and other chains said sales slowed in October and early November as people delayed holiday purchases. But business picked up in recent weeks as cold weather blanketed the Northeast and other parts of the country.

The University of Michigan's consumer-sentiment index fell 5.2% in November compared with October, and is down 15.7% compared with November 2021. Joanne Hsu, the survey's director, said that rising borrowing costs, declining asset values and weakening labor-market expectations have weighed down consumer attitudes.

One casualty of the pandemic is the traditional door-buster sale. Shoppers often lined up for deals on big-screen TVs, electronic gadgets and other goods, but the crowds sometimes turned dangerous, as people stampeded into stores to get items before they sold out.

According to Marshal Cohen, chief industry adviser of market-research firm NPD Group Inc., door-busters scare people away. He notes that people don't want to fight the crowds and get up at 4 a.m.

Walmart, Target, Best Buy, and Macy's are among the retailers who have stopped doing doorbusters during the pandemic. With the need to limit the number of people in stores for health reasons, they have switched to promotions that run for longer periods of time - sometimes all day or even a week.

Target has been releasing new deals every Sunday since October, including Black Friday deals that are available this week. Walmart started offering "Black Friday Deals for Days" on November 7. Best Buy's Black Friday sale began on November 20. Macy's started offering early-access deals on November 7, with its entire Black Friday promotions available from November 20-26.

Macy's Chief Executive Jeff Gennette said that the store's door-busters were causing complaints from customers, who were coming in only to find that the item they wanted was sold out. He noted that people want to shop when they want to shop, and they don't necessarily want to come in during the morning window.

Arianna O’Dell, a 32-year-old songwriter who lives in Manhattan, bought a dishwasher in October for 30% off as a Christmas present for herself. “I thought, maybe I should wait until Black Friday,” Ms. O’Dell said. “But I didn’t want to be up until midnight on Thanksgiving.”Ms. O’Dell said that she decided to buy the dishwasher on October because she didn't want to miss out on the 30% off deal. She also said that she didn't want to be up until midnight on Thanksgiving waiting for Black Friday deals.

According to DealNews.com, Black Friday advertisements that use the word “door-buster” are running at about half the level of 2021. Julie Ramhold, a DealNews.com consumer analyst, said that the types of discounts are similar, but retailers aren’t restricting them to a narrow time frame.

Target is offering 40% off boots and coats and $60 off Beats Studio earbuds from Nov. 24 through Nov. 26. Walmart is discounting a Chefman espresso machine by $40 on Friday, while supplies last. And Macy’s is offering discounts on everything from handbags to bedding through Saturday.

Inflation is still near a four-decade high, making it difficult for people to stretch their dollars. Kate Lacroix of Boulder, Colo., is using the rewards points from her American Express card to buy gifts, including books, a bathrobe and a karaoke microphone. “I plan to use points for all my holiday shopping this year,” the 48-year-old food-marketing executive said.

Not all retailers are giving up on door-busters. Amazon.com Inc. is still offering them as part of its 48-hour Black Friday sale, which starts on Thursday morning. Some of the deals include children’s pajamas for $10 and ski gear for as low as $15.

The first 200 people to enter Kohl’s stores when they open at 5 a.m. on Friday will have the chance to win prizes such as Samsonite carry-on luggage or a trip to a Legoland resort.

JCPenney is bringing back its door-buster coupons after a two-year hiatus. The same-day coupons are available to the first people in line when stores open at 5 a.m. on Black Friday. Quantities vary by store, the company said. The coupons are for $10 off a $10 purchase, $100 off a $100 purchase and $500 off a $500 purchase and are valid for Black Friday only.

"We're getting ready for Black Friday to return this year," said Michelle Wlazlo, JCPenney's chief merchandising officer. "People will want to come out and shop."

Some retail executives said they are preparing for a back-end loaded season, particularly since Christmas falls on Sunday. This will allow people to snap up last-minute gifts on the preceding Friday and Saturday. The longer shoppers wait to buy, the more nervous retailers become and the more they will discount, executives said.

According to Jonathan Johnson, the chief executive of Overstock.com Inc., the current deals are good, but they will get even better.

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