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US retailers experienced what appears to have been a muted Black Friday as high inflation and sagging consumer sentiment erode demand for material goods.
(Bloomberg) — US retailers experienced what appears to have been a muted Black Friday as high inflation and sagging consumer sentiment erode demand for material goods.
Online sales rose 2.3% to a record this year, with consumers shelling out for electronics and smart-home items, Adobe Analytics said, as retailers offer steep discounts to clear out bloated inventories. Hot items included toys such as Fortnite, Roblox and Bluey.
Key Developments:
Bloomberg News is following the latest developments as information becomes available throughout the day. All time stamps reflect the US East Coast.
Adobe Reports Record $9.12 Billion in E-Commerce (8:30 a.m. ET)
Online sales during the US’s biggest shopping day of the year rose 2.3% to $9.12 billion, Adobe Analytics said Saturday. That was slightly ahead of the company’s initial projection of $9 billion, although the percentage increase lagged far behind the country’s inflation rate, which is running at almost 8%.
Shoppers spent their money primarily on electronics, smart-home items and audio equipment, while toys and sporting goods also performed well, Adobe said. Hot items included toys such as Fortnite, Roblox and Bluey. Shoppers also bought up Xbox Series X and PlayStation 5 devices, as well as drones and Apple MacBooks, Adobe said.
E-commerce purchases are expected to total more than $9 billion on a combined basis Saturday and Sunday.
Shopify’s Black Friday Sales Hit a Record (8:30 a.m. ET)
Canadian e-commerce firm Shopify Inc. said its Black Friday sales hit a record of $3.36 billion this year, marking a 17% growth from the 2021 edition, with apparels & accessories featuring among the categories most sought by consumers.
“The weekend that started it all is still one of the biggest commerce events of the year, and our merchants have broken Black Friday sales records again,” the company’s president Harley Finkelstein said in a statement.
Merchants saw sales peak at $3.5 million per minute, with cross-border orders representing 15% of total sales, Shopify added, citing London, New York and Canada as top-selling cities.
Cyber Monday Poised to Be Biggest Online Shopping Day (8:30 a.m. ET)
Some consumers are hoping for even better deals on Nov. 28 — or Cyber Monday. The biggest online shopping day of the year is poised to generate $11.2 billion, up 5.1% from last year, Adobe said.
“Cyber Monday will offer the best deals for computers (27%), as well as furniture (11%). Those looking to buy an appliance should consider waiting until Thursday (Dec. 1), when discounts are set to peak at 18% on average,” it said.
In-Person Shopping Appears Muted (Saturday, 7 p.m. ET)
While consumers shopped from their computers and phones on Friday, foot traffic at tradition brick-and-mortar retail establishments appeared muted. But deals were steep, including at Gap Inc.’s Old Navy, which was offering 60% off most items. Big box electronics chain Best Buy had Chromebooks as low as $79. Walmart Inc. offered deals on everything from televisions to apparel.
Even still, the overall outlook for the holiday is cautious amid a cost-of-living crunch. Overall spending this holiday season is expected to rise 2.5% from a year ago, compared with 8.6% last year and a whopping 32% in 2020, according to Adobe data.
For those who did venture out to shop, the crowds might have been thinner but some shoppers experienced longer wait times, likely due to the ongoing shortage of retail workers — one slice of the larger labor-supply issues that have been hitting the country since the pandemic, said Shannon Warner of consulting firm Kearney.
Retailers just “don’t have enough people to staff the full hours that they have historically had,” Warner said. She said she is encouraging retail clients to consider automation and other efficiency moves, rather than waiting for the possibility of a solution to the retail labor shortage.
Deals Sweeter This Year Than Last: Salesforce (Saturday, 12:30 p.m. ET)
Consumers are finding better deals this shopping season than last year, according to data from Salesforce Inc.
The average consumer discount rate for Thanksgiving Day shoppers online in the US was 31%, Salesforce says. That’s 7% higher than 2021, when retailers didn’t have to put as many items on sale because demand was strong and a lot of merchandise was held up at snarled ports.
But this year’s discounts are still slightly lower than 2019 levels, when the average rate was 33%, according to Salesforce.
Last year, US consumers shopped relatively earlier on concerns that supply-chain problems would lead to a lack of merchandise.
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