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US retailers are expanding their one-day seasonal Black Friday sales into a weeklong sales event aimed at luring US consumers to keep spending, as data shows that the engine driving their economic growth is starting to falter.
Walmart, Amazon, Target and Macy’s are among the companies American retailer has been offering deep discounts under the Black Friday banner, long before it actually arrives this week.
Even so, general merchandise sales fell 3% year-on-year in the week ended November 16, according to data from Circana, which compiles retail point-of-sale data.
The National Retail Federation forecasts winter holiday sales will reach nearly $1 trillion in the US in November and December, a record $902 per person. But spending growth is expected to be around 2.5-3.5%, the slowest since 2018.
“We’re seeing a pullback of incentives to try to expand the opportunities within that [retailers] could attract more consumers,” said Gregory Daco, chief economist at consultancy EY Parthenon. “The likely reality this holiday season is that we see quite low sales because volumes are growing but at a moderate pace — and[retailers have]much less pricing power.”
Retailers, he said, are “incentivizing through discounts and various forms of promotions” those at lower income levels, while also “trying to attract individuals with higher incomes.” to make purchases during this wider period.”
In spite of headline inflation has declined from historic highs over the past few years, consumers “remain extremely frustrated by persistently high prices,” the University of Michigan said in a monthly survey this week.
Consumer spending has main driver about America’s strong economic growth in recent months. But consumer confidence remains lower than the long-term averageSentiment survey shows.
The prospect of a new round of tariffs under incoming President Donald Trump raises the stakes Inflation may rise againeconomists have warned – putting a fresh damper on sentiment.
“Donald Trump’s return to the White House with a Republican majority [probably leads] to higher inflation, slower GDP growth and widening budget deficits,” Roland Fumasi, food and agribusiness analyst at Rabobank, said in a note.
If Trump raises taxes, it would “lead to a rebound in inflation and a slowdown in economic growth,” he said.
“The negative impact on growth can be mitigated by tax cuts and deregulation by a Republican Congress. However, this will increase the budget deficit and increase inflation, especially when combined with reduced immigration,” he added.
Black Friday is one of those busiest time of the year for stores that sell consumer goods, and the period between Thanksgiving and Cyber Monday – the Monday after the holiday, when electronics vendors slash prices on goods – is important for sales every year by retailers.
NRF chief economist Jack Kleinhenz said household finances are in “good shape,” creating “motivation for strong spending ahead of the holidays,” although “households will spend more cautiously.”
Target chief executive Brian Cornell told analysts this week that consumers are becoming “increasingly resourceful” in how they shop, “focusing on deals and then stocking up when They found them.”
Group of stores disappointed Wall Street this week, by forecasting flat sales in the fourth quarter, pulled off a three-day “Early Black Friday” promotion in early November. On Thursday, it launched a The promotion called “Black Friday Deals” will run until the end of the month, including items like Christmas trees and headphones at half price.
Walmart, the world’s largest retailer, launched the first of two week-long “Black Friday Deals” events on November 11. The second event will begin on Monday, offers discounts on TVs, iPhones, toys and jeans, among other items.
Amazon’s “Black Friday Week” begins on Thursday. Home Depot’s “Black Friday Savings” offer runs from November 7 to December 4.
Additional reporting by Will Schmitt in New York and Madeleine Speed in London
