Retailers around the world are hoping millions of shoppers will take advantage of Black Friday discounts in the kickoff to the key holiday shopping season, against a backdrop of financial pressure on households in the US, Europe and elsewhere.
With many shoppers squeezed by persistent inflation and higher interest rates, US holiday spending is expected to rise at the slowest pace in five years. Most major retailers slashed their seasonal hiring.
"Consumers are still being very cautious, so if holiday sales do go up, we think it will be due to inflation raising prices," said Jessica Ramirez, a senior research analyst at Jane Hali & Associates.
US shoppers plan to spend an average $875 on holiday purchases – $42 more than last year – with clothing, gift cards and toys at the top of most shopping lists, according to a survey of 8,424 adults conducted in early November by the National Retail Federation, a US retail trade group.
A record 130.7 million people are expected to shop in-store and online in the US on Black Friday this year, it estimates.
Originally known for crowds lining up at big-box stores in the US, Black Friday has moved online and gone global.
A Global Shopping Event
In France, Italy, and Spain, most shoppers planned to buy clothing on Black Friday, with electronic goods coming second, according to a PwC survey. On average, shoppers in France expected to spend €295 ($322) on Black Friday, the survey found.
In the UK, spending was up just 1.4% in the week to Wednesday compared to the same period last year, according to data from Barclays, a bank that sees nearly half the country's credit and debit card transactions.
Executives say the rise of online shopping has made Black Friday less important as a single-day event. Retailers from Macy's to Amazon now launch deals as early as October and often offer additional discounts closer to Christmas, Macy's CEO Jeff Gennette told investors this month.
Most US stores were closed on Thanksgiving but opened to shoppers at 5 a.m. or 6 a.m. on Friday.
To be sure, some retailers hold their biggest markdowns for the Thanksgiving holiday weekend, and big-box players including Walmart, Lowe’s and Home Depot maintained or deepened their advertised discounts.
Whether those deals will persuade inflation-weary consumers to open their wallets is the biggest worry for retailers on Friday.
Several categories of merchandise that were top sellers on Black Friday in previous years have been hit hardest by the recent downturn in discretionary spending, said Mari Shor, a senior equity analyst at Columbia Threadneedle Investments.
Best Buy, for instance, is offering between $100 and $1,600 off electronics including laptops, flat-screen TVs and KitchenAid mixers after telling investors this week that shoppers are still holding off on big-ticket purchases.
A downturn in luxury spending has also prompted department stores, including Bergdorf Goodman and Nordstrom to offer steep discounts on items such as Balenciaga shoes and Oscar de la Renta earrings.
“Designer remains pressured, primarily in shoes and handbags, and we continue to right-size our inventory to meet that demand,” Nordstrom president Pete Nordstrom told investors earlier this week.
Mall owner Westfield said it expects more visitors to its shopping centres in Britain this year than in 2022, with footfall up more than 6% so far this week, according to Katie Wyle, head of shopping centre management UK at Unibail-Rodamco-Westfield.