Black Friday and Cyber Week sales: Discounts, what discounts?
Black Friday and Cyber Week sales: It’s crunch time for U.S. retailers as masses of shoppers return.
Black Friday and Cyber Week sales: It's crunch time for U.S. retailers as masses of shoppers return to in-person shopping after the long, pandemic-induced hiatus. This year is shaping up to be another record for overall spending. But there's a long list of concerns, which have been reinforced in recent weeks by a series of uneven earnings reports. Will retailers have enough products to meet high demand as shipping containers pile up at ports? Will consumers be willing to pay more for their merchandise amid rising prices and scarce discounts? And will companies have enough manpower to handle the expected rise in spending?
We'll be taking a look at the latest information as it becomes available through the day. All time stamps reflect the U.S. East Coast.
Salesforce Flags Lack of Big Discounts This Year (10:01 a.m.)
Consumers are finding some of the least-generous Black Friday and Cyber Week deals on record because of inflation, robust demand and diminished product availability.
“These are some of the lowest average discount rates that we've seen in recent history,” said Rob Garf, vice president of retail at Salesforce.com Inc. Globally, the average discount on products purchased during the past couple of days is 24%. That's lower than last year and below the average in recent years, too.
“If consumers see 25% off, they should feel really good about that,” Garf said in an interview. In previous years, shoppers could often snag a deeper discount if they waited to buy items after Cyber Monday, he said.
“This year, I'm cautioning and I'm encouraging consumers to not play the game of discount chicken,” Garf said. If consumers see a product that has a discount of as much as 50%, that's probably because it's only available in less popular colors or sizes, he said.
U.K. Spending Rebounds From Last Year (9:50 a.m.)
The volume of payments in the U.K. on Black Friday has jumped 23% from last year and 4% from 2019, according to Barclaycard Payments.
“Encouragingly, Black Friday this year is off to a strong start despite a challenging macroeconomic backdrop,” Rob Cameron, chief executive officer of Barclaycard Payments, said in a statement. He said that spending declined last year amid pandemic restrictions.
Retailers' sale volumes have recovered to pre-pandemic levels, he added.
However, consumers may not be getting many discounts -- a recent survey from the British Independent Retailers Association showed that 85% of its members won't be cutting prices because of rising costs and supply-chain disruptions.
Thanksgiving Spending Comes in at Low End of Estimate (9:42 a.m.)
The numbers are in for Thanksgiving online spending -- and the total is the low end of expectations. Shoppers spent $5.1 billion on Thursday, according to the Adobe Digital Economy Index. Adobe's initial prediction was for spending to be in a range of $5.1 billion to $5.9 billion, which was later lowered to $5.1 billion to $5.4 billion.
But Adobe reiterated its prediction that online spending from Nov. 1 through Dec. 31 will rise 10% to $207 billion, a record.
On Thanksgiving, the prevalence of out-of-stock messages fell to the lowest since June, Adobe said. That reflected efforts by retailers to focus their marketing efforts on in-stock merchandise amid global supply-chain hurdles.
PlayStation 5 Draws Crowds Amid Resale Frenzy (9:08 a.m.)
GameStop Corp. used the lure of Sony's PlayStation 5 to generate buzz and foot traffic on Thanksgiving. The video-game retailer alerted shoppers early Thursday on Twitter that a limited supply of PS5s would be available at select stores.
That came after the chain hinted earlier in the week that it might have some PS5s for sale at select locations. A year after its release, the console is still hard to find because production has been slowed by a lack of microchips and supply-chain disruptions. On resale sites, the hardware is being offered at twice the retail price or more.
One father said on Twitter that he waited 30 hours in line at his local GameStop to nab a PS5 for his son.
Now, many hopeful consumers are waiting to see if other stores like Best Buy or Target release in stores as well.
Doorbusters Still Haven't Come Back (8:45 a.m.)
The thinking last year was that the lack of doorbuster deals would be a one-time thing. So much for that.
With Covid-19 still lingering -- and a new variant emerging -- retailers have largely eschewed offers that would require customers to pack into stores to get them. But that doesn't mean Black Friday sales have completely disappeared, noted Poonam Goyal, Bloomberg Intelligence retail analyst.
“What we don't have again is doorbusters,” she said. “All the deals that are available in store are largely available online, which seems that you can go out if you want to enjoy the experience of Black Friday shopping but alternatively you can find everything still online from your home without stepping outside. I think online shopping will be a much bigger deal.”
Wall Street Worries About Black Friday Prospects (7:51 a.m.)
Investors seem awfully pessimistic heading into Black Friday.
Retail stocks are down pretty much across the board in premarket trading as U.S. chains start opening their doors to shoppers. Adobe may have spooked Wall Street after saying late Thursday that online sales on Thanksgiving likely came in lower than expected, while the rise of a new Covid-19 variant is also hurting stocks. Retailers have already been grappling with rising costs, stock shortages and a tight labor supply, so a decline in consumer demand would add to their woes.
Among the major names trending lower, Gap Inc. slipped 3.5% as of 7:51 a.m. in New York, Kohl's Corp. fell 4.4%, Macy's tumbled 5% and Bed Bath & Beyond Inc. was down 2.4%. Target Corp., Walmart Inc., Home Depot Inc. and Lowe's Cos. were each down 1% or more. Mall-based chains similarly struggled, with Abercrombie & Fitch Co., American Eagle Outfitters Inc. and Tapestry Inc. also declining.
Adobe Lowers Spending Estimate for Thanksgiving (12:01 a.m.)
E-commerce spending by U.S. consumers on Thanksgiving Day will probably climb to a record -- but sales may not be as strong as initially expected.
Consumers were on track to spend $5.1 billion to $5.4 billion online Thursday, according to an estimate from the Adobe Digital Economy Index. The top end of the estimate was lowered from a previous estimate of as much as $5.9 billion.
“What we've seen this afternoon is that we're on a trajectory in which the Thanksgiving Day total will be closer to the lower half of our originally proposed range,” Taylor Schreiner, director at Adobe Digital Insights, said in a statement. “This can be attributed to consumers spreading out their spending across November, which has shown up in more $3 billion online shopping days thus far.”
Small Businesses Face Staffing Hurdles (12:01 a.m.)
Small businesses are feeling “pretty optimistic” about the holiday season, said John Waldmann, chief executive officer of Homebase, a software company that helps small businesses manage their teams. But challenges still loom, particularly in regards to staffing, he said in a recent interview.
About 35% of small business owners said they are looking to hire at least one seasonal team member. This means that some companies will be understaffed, some will be short on experience, and some will suffer from both problems, Waldmann said. He said that more than 60% of small businesses reported they'll be paying workers more this year, compared with 2020.
Staffing shortages could mean a less-pleasant experience for shoppers. “Consumers, be patient and be kind,” he said.
Homebase recently surveyed 400 small business owners and 2,000 employees about their outlook for the holidays.
Macy's CEO Talks Store Traffic, Staffing (12:01 a.m.)
Macy's Inc. CEO Jeff Gennette said he doesn't see Black Friday foot traffic bouncing back to pre-pandemic levels this year, adding that traffic at stores remains below what it was in 2019. More of those who go in are actually making a purchase, however.
Like the rest of the industry, staffing has been a challenge.
“We've got some stores in great shape and some stores that are really lean,” Gennette said in an interview last week. The department-store chain said earlier this month it would raise the minimum wage to $15 an hour by May. Because of seasonal challenges, that pay boost has already gone into effect in more than 100 stores for the Christmas hiring season.
Hiring has improved,“but we still have some gaps and open jobs,” he said. “We're mitigating that by offering spot bonuses or premium pay for weekends. We're offering our colleagues opportunity for overtime and working six days.”
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