Black Friday can’t come soon enough for retailers
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Retailers are looking for Black Friday to reignite tepid demand from budget-minded shoppers, who have been hesitant to spend this year unless they’re getting a good deal.
Among the chains that reported quarterly sales gains this past week were Walmart, Gap and T.J. Maxx, a sign that shoppers are willing to spend when they see the right products at reasonable prices.
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Executives said shoppers are continuing to pull back on discretionary purchases like clothing and shoes, while spending more on food and other essentials. Although inflation has cooled, prices haven’t reverted to prepandemic levels and consumers are still frustrated that they are paying more for many things, including groceries and child care.
The coming Black Friday weekend is less important than it once was now that retailers roll out holiday deals in October to tempt shoppers to buy earlier. But the day after Thanksgiving is still expected to be the busiest U.S. shopping day of the year, according to Sensormatic Solutions, which tracks foot traffic at retail stores.
Retailers that disappointed shoppers in the latest quarter saw their stock price take a hit. Target shares fell 21% in a single day, after the company posted weak quarterly revenue and lowered its profit and sales goals for the year.
“Consumers tell us their budgets remain stretched and they’re shopping carefully as they work to overcome the cumulative impact of multiple years of price inflation,” Target Chief Executive Brian Cornell told analysts last week.
Walmart, which derives more than half its revenue from groceries, said it was entering the year-end shopping season with momentum, after strong back-to-school and Halloween sales. “Overall, we are feeling good about holiday” sales, said John David Rainey, Walmart’s finance chief. But he added that “consumers are still discerning.”
Shoppers spent 4% less on clothing, accessories and footwear during the first 10 months of 2024, compared with the same period a year ago, according to Consumer Edge, which tracks spending on more than 100 million credit and debit cards as well as other accounts. One of the few apparel categories to increase was fast fashion, which eked out a small gain as shoppers looked for low-price alternatives, Consumer Edge’s data showed.
