Shops started on Black Friday but the epidemic problems remain

Shops started on Black Friday but the epidemic problems remain

New York Retailers are expected to make the unofficial start to the holiday shopping season on Friday with larger crowds than last year in a step closer to normalcy. But the fallout from the pandemic continues to weigh on the minds of businesses and shoppers.

With strong hiring, healthy gains, and big savings, customers are returning to the stores and flaunting all kinds of items. But the rise has also led to limited choice across the board as suppliers and retailers have been caught.

A shortage of shipping containers and truck drivers has helped delay deliveries while inflation continues to rise. The combination of not finding the right item at the right price—plus a lack of labor that makes it difficult for companies to respond to customers’ needs—can make for a less festive mood.

Shoppers, on average, are expected to pay 5% to 17% more for toys, clothing, home appliances, televisions and other Black Friday purchases this year than last year, according to Orelene Duthwaite, senior sector advisor at Allianz Research. TVs will see the highest price hikes on average, up 17% from last year, according to the research firm. That’s because any available discounts will be applied to already expensive items.

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“I think it’s going to be a chaotic holiday season,” said Neil Saunders, managing director at GlobalData Retail. It will be a bit disappointing for retailers, consumers and workers. We’ll see long lines. We’ll see messier stores. We will see delays while collecting online orders.”

For years, Black Friday has been losing its relevance. Since 2011, stores have kicked off the holiday shopping season by opening their doors on Thanksgiving to compete with Amazon and other growing online threats. But that shift was just a cannibalization of Black Friday sales. The richness of shopping was further weakened when stores began marketing Black Friday sales for the full week and later in the month.

The pandemic has downplayed the Black Friday event, although some experts still believe it will be the busiest day of the year again. Last year, retailers began offering big holiday discounts earlier in October in an effort to publicize shopping for safety reasons and to ease peak shipping times online. They’ve also ditched the Thanksgiving Day in-store shopping event and paid all of their discounts online. This year, retailers are adopting a similar strategy, although they are now pushing holiday discounts in stores, too.

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Despite all the challenges, experts believe Thanksgiving week and season sales will be strong.

U.S. retail sales, excluding auto and gas, are expected Monday through Sunday to increase 10% from last year and 12.2% from the 2019 holiday season, according to MasterCard SpendingPulse, which measures total retail sales across all payment types including Criticism and check.

Online sales are expected to increase 7.1% for the week, slowing from a whopping 46.4% increase in the same period last year when shoppers switched en masse to online rather than in person, according to Mastercard. For the overall holiday season, online sales should increase 10% from last year, compared to a 33% increase last year, according to the Adobe Digital Economy Index.

Black Friday sales are expected to be 20% higher than last year as traffic returns to stores.

For the November-December period, the National Retail Federation, the nation’s largest retail group, expects sales to increase by 8.5% to 10.5%. Holiday sales increased 8.2% in 2020 when shoppers, who were closed during the first part of the pandemic, spent their money on pajamas and home goods.

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