What: This Black Friday should expose US customers’ fatigue with inflation, as the hunt for bargains has increased

Why it is important: The US market is not specific when it comes to price issues, and it might mean that all retailers across the planet are facing the same dilemma: more promotions and price decreases, less margins.

Amid inflation and economic strain, American consumers, fatigued by higher prices, are expected to turn out in record numbers for the US holiday season, particularly during Black Friday. The National Retail Federation predicts a significant increase in shoppers, with average spending also expected to rise. However, this season's spending is only anticipated to match inflation rates, reflecting consumers' cautious approach.

Retailers are responding to this shift by offering more substantial discounts, especially in categories like apparel and electronics. Despite easing inflation, the pandemic's savings buffer is dwindling for many households, influencing purchasing decisions. Large retailers like Home Depot, Lowe’s, Kohl’s, and Best Buy have reported a drop in spending on non-essential items and large projects, indicating a more cautious consumer attitude.

Walmart, the nation's largest retailer, foresees a potential period of deflation, and nearly 80% of consumers are considering trading down for cheaper alternatives or forgoing purchases altogether. This year has also seen a rise in the use of flexible payment options like buy now, pay later, especially among younger shoppers.

Retailers are focusing more on affordable private label brands to cater to the price-sensitive market. Consumers are adapting by becoming more selective and value-conscious in their shopping, seeking substantial discounts and prioritizing necessary items over luxury goods. The mood in shopping centers reflects this cautious approach, with many adjusting their holiday budgets due to increased everyday expenses.

Inflation puts US Black Friday crowds in a bargain-hunting mood