US retailers are about to see if Black Friday benefits from a holiday halo effect
NEW YORK– NEW YORK — Black Friday deals no longer entice people to leave Thanksgiving tables for midnight runs through malls. Brawls in store aisles over limited-time discounted toys and TVs are sights of holidays past. Online shopping and retailers launching discounts weeks before Turkey Day have dampened that kind of fervor.
But the sales event still has enough enthusiasts to make the day after Thanksgiving the one where American stores attract the most buyers. For this reason, Black Friday still serves as the unofficial start of the holiday shopping season.
This year’s kickoff comes as consumer confidence in the U.S. economy has plummeted this month following a federal government shutdown, weak hiring and stubborn inflation, according to a report released Tuesday by the Conference Board.
Many retail executives have reported that customers are becoming more discerning and increasingly focused on bargains, while remaining willing to spend on important occasions like back-to-school and winter vacation, creating a halo effect.
“Consumers have been saying the economy is terrible while continuing to spend for years now, so the outlook is probably better than what they’re telling us,” Bill Adams, Comerica Bank’s chief economist, said this week about the mood of shoppers heading into Black Friday. “But business surveys also reveal that consumers are more price sensitive and more selective in their spending.”
As they planned for the spring and summer holidays, retail companies grappled with the volatility of President Donald Trump’s sweeping tariffs on imported goods. Many expedited shipments of certain goods before tariffs took effect or decided to absorb part of the costs of import taxes instead of raising prices for customers.
Market research firm Circana said 40% of all general merchandise sold in September saw prices increase by at least 5% compared to the first four months of the year.
Toys, baby products, household goods and team sports equipment were among the hardest hit categories. For example, 83% of toys sold in September saw an increase of at least 5%, Circana said. Industry group The Toy Association says nearly 80% of toys sold in the United States are made in China, a country that the Trump administration has hit with particularly high tariffs several times this year.
Still, analysts and mall executives spoke of strong momentum heading into Black Friday week. At the Mall of America in Bloomington, Minnesota, foot traffic in recent weeks has exceeded pre-pandemic 2019 numbers, said Jill Renslow, the mall’s director of business development and marketing.
“We are seeing a very positive start to the holiday season,” Renslow said. “The last Saturdays of November were very strong.”
Online sales growth has also been robust so far. From November 1 to 23, consumers spent $79.7 billion, according to web tracking and analytics platform Adobe Analytics. This represents a gain of 7.5% from the previous year and is higher than Adobe’s 5.3% growth forecast for the season.
Mastercard SendingPulse, which tracks spending across all payment methods, predicts a 3.6% increase in holiday sales from November 1 to December 24. This compares to a 4.1% increase last year.
“Obviously there is uncertainty,” said Michelle Meyer, Mastercard’s chief economist. “Clearly, consumers are feeling nervous. But right now, that doesn’t seem to be changing how they present themselves for this season.”
According to Adobe Analytics, Thanksgiving Day was the best time to shop online to get the biggest discount on sporting goods. But Black Friday will be the best time to buy TVs, toys and appliances online.
Cyber Monday, however, should be the best time to buy clothes and computers. Clothing discounts peaked at 12.2% of the manufacturer’s suggested price between November 1 and 23, but are expected to reach 25% on Cyber Monday, Adobe said.
