Black Friday: US shoppers see fewer ‘doorbuster’ deals amid market selloff
Bargain hunters ventured out in chilly weather on Black Friday, only to discover that many US retailers offered smaller price markdowns this year amid tight supplies.
Covid fears and fewer “doorbuster” sales thinned crowds the day after the Thanksgiving holiday, which kicks off the year-end holiday shopping season.
On the same day, the World Health Organization named the newly identified Omicron variant of the coronavirus as a “variant of concern”, triggering worldwide alarm and a selloff in the US stock market.
Stores on Black Friday had the lowest level of clearance goods for sale in five years or more, Cowen analysts said in a note. Many shoppers chose to pick up merchandise curbside rather than venturing inside stores.
Consumers had spent $6.6bn by 9pm ET, according to Adobe Digital Economy Index, which expected total spending of between $8.8bn and $9.2bn for the day.
Walmart and Target stood to outperform other retailers in part because of their buy-online-pick-up-atstore services, Cowen said. Target added more than 18,000 “drive-up” parking spaces, more than doubling spots versus last year.
Several retailers – including Walmart, Target and Best Buy – are expected to post lower fourth-quarter profit margins because of tight inventory and higher costs for raw materials, freight and labor.
“Even though the holiday season should be OK from a sales standpoint – because retailers are discounting less – the margins won’t necessarily be higher because of inflation,” said Forrester Research analyst Sucharita Kodali.
Consumers are entering the holiday season flush with cash thanks to multiple rounds of government pandemic relief and double-digit wage increases as businesses compete for workers. Yet retailers lured shoppers to make holiday purchases as early as September this year, because the supply chain logjam has prevented them from quickly replenishing year-end merchandise.
A Deloitte survey showed people spent 80% to 85% of their holiday gift budgets before Black Friday. For November and December, online sales are estimated to hit a record $207bn, up 10% from last year, according to Adobe Digital Economy Index. The National Retail Federation has forecast combined brick-and-mortar and online holiday sales to reach between $843.4bn and $859bn, 8.5% to 10.5% higher than 2020.
Elver Gomez, a 21-year-old student in Chicago, said he didn’t find the Apple and Microsoft laptops he wanted while shopping at a Best Buy store Friday morning.
“It seems like this year it’s either out of stock,” he said, or for sale at “not that
great of a price”. Best Buy added a message to its website, warning of “limited qualities” and “no rainchecks”.
Electronics – in short supply due to a global chip shortage – had the highest out-of-stock levels, followed by personal care and home and garden, according to Adobe. Through most of November, out-of-stocks were up 261% versus 2019.