Shoppers at a Target store ahead of Black Friday in Clifton, New Jersey. — Bloomberg
THE lure of US$10 gift cards wasn’t enough to draw big early-bird Black Friday crowds at the Macy’s Inc flagship New York City location in Herald Square.
Andre Langer, 26, and Nicole Galler, 25, were visiting from Germany and arrived at Macy’s when it opened at 6am, hoping to see people storm through the entrance.
There were fewer shoppers than they expected, though, and they weren’t impressed with the deals. “They’re not that good,” Langer said.
Macy’s and other retailers that cater to middle-income consumers went into the holiday shopping season hoping that exclusive products and special promotions could help revive demand in an otherwise humdrum year.
Their efforts spoke to the high stakes that many retailers are facing after a year of sluggish sales with consumers fatigued by the higher prices that dogged the post-pandemic period.
Some retailers are kicking off the biggest shopping holiday with new chief executives, raising the bar even higher to generate stronger sales. To add to challenges, the shopping season is five days shorter this year than it was in 2023 due to a late Thanksgiving.
For the most part, their efforts didn’t appear to be enough to draw early crowds. A Best Buy in Mt Vernon, New York, was nearly empty a little before 8am, with traffic much slower than expected, according to a security guard stationed there.
Soft expectations
US retailers garner about 20% of their annual sales during the holiday season, and early projections have pointed to this year being softer than those past.
Online and in-person US holiday sales are expected to rise between 2.5% and 3.5% this year, according to the National Retail Federation, an industry group.
That’s behind last year’s growth of 3.9%. Those figures reflect sales for November and December and aren’t adjusted for inflation.
Some of the slowdown may stem from early gift buying that’s not captured in holiday sales data.
Various sales events in October – such as Amazon.com Inc’s Prime Day – likely pulled forward shopping demand, according to Coresight Research, affecting traditional holiday sales days like Black Friday. About 52% of consumers began holiday shopping before November, higher than last year.
US online sales rose 7% year-over-year to US$17.5bil on Black Friday, according to Salesforce. Growth is slower than last year, when US online sales increased 9% to US$16.4bil during the same period.
The average discount rate fell to 28% in the United States, according to Salesforce.
At the King of Prussia mall in Pennsylvania last Friday, business owner Carla Schiavo said she hadn’t seen many good deals. “I got better deals the last two weeks online,” Schiavo, 49, said.
At Walmart, many shoppers have been buying Black Friday deals online since last Monday, according to chief merchandising officer Latriece Watkins. Apple AirPods, 65-inch Roku TVs and men’s denim were among the bestsellers in stores on Black Friday.
While all retailers look to the holidays for a boost, those that cater to middle-income shoppers are feeling particularly pinched by a slowdown in discretionary spending.
Under Macy’s chief executive officer Tony Spring, who took over in February, the largest department store in the United States by revenue and number of stores is trying to draw more shoppers.
Macy’s discounts this year were roughly in line with last year, including 40% to 50% off some boots and shoes and 50% off select handbags and wallets, but it’s betting newer products from different brands will attract shoppers.
Traffic at the Herald Square Macy’s picked up as the day continued.
Target, which cut its annual forecast last week citing slowing demand for discretionary products, saw an early rush of shoppers who came to buy Taylor Swift’s The Eras Tour Book, which the company said is already its bestselling title of the year.
The company said sales of all three exclusive Swift products – the book, vinyl and CD – have exceeded expectations so far.
Items were exclusively sold in stores last Friday and will be available online starting last Saturday.
At 8.45am, Sasha Drozdetski of Ardsley, New York, was already on her second Target trip of the day, wearing a full Swift-themed sweat suit.
Drozdetski, 34, had first arrived at the White Plains, New York, store at 5.30am, she said. By 5.58am she and about 50 other Swifties were let in to buy the items. In line, she said, “we were trading friendship bracelets.”
Home Depot Inc, which has seen a pullback in demand for big-ticket home improvement purchases in recent years, said traffic and demand on Black Friday were meeting expectations, thanks to favourable, dry weather in most areas of the country and an expanded assortment of in-store doorbusters.
The pace of shoppers visiting stores in person had been expected to slow somewhat this Black Friday versus last year, according to Grant Gustafson, head of retail consulting and analytics at Sensormatic Solutions, a retail technology provider. — Bloomberg
Jaewon Kang and Jeannette Neumann write for Bloomberg. The views expressed here are the writers’ own.
