Black Friday sales are expected to increase this year, but not at the same rate they did last year, with consumers indicating that they do not feel comfortable spending more this holiday season, according to surveys by the leading retail forecast firms.
Americans plan to spend an average of $706 on gifts this year, an 8 percent drop from $770 last year, Gallup reported last week. Upper- and middle-income households are scaling back the most: They plan to spend $87 and $80 less this year, respectively.
“Americans are now feeling more restrained about holiday shopping.… What looked to be a relatively solid holiday season shaping up for retailers now runs the risk of being a less than merry one,” Gallup said in a statement.
Similarly, Nielsen’s annual holiday spending study, released earlier this month, shows that 68 percent of consumers say they feel like they’re still living in a recession, with 30 percent saying they will spend between $250 and $500 this holiday season. The company says holiday spending will increase 2 percent compared with 2012.
The slowdown reflects a turbulent autumn when a government shutdown in Washington and anxiety over the Affordable Care Act added to a sense of economic stress for many Americans. While consumer confidence is increasing slowly, it remains well below mid-September levels, when confidence ratings plummeted.
The modest bump in sales is primarily related to the increase in holiday hours, the growth of online shopping, and the spike in retailer promotions, analysts say. IbisWorld, a market-research firm in Santa Monica, Calif., reports that Friday sales will increase 3.9 percent over last year, reaching $13.6 billion. While this is good news for retailers, the rate of increase is lower than last year, when sales went up 5.9 percent over 2011.
Spending growth is expected to decrease through the weekend. As for Cyber Monday, the day when online retailers offer their big sales, the day will yield $1.8 billion, a 13 percent increase over last year – which also falls short of the 21 percent spending growth from 2011 to 2012.
Despite pushing back store hours into the Thanksgiving holiday, IbisWorld predicts that the rate of sales growth for Thursday will drop by more than a third this year; spending is forecast to grow 3.7 percent to $8.2 billion, a drop from 6 percent growth in 2012.
Spending projections for the season are linked to the relatively small time window for shoppers to head to the malls. There are only four weekends between Thanksgiving and Christmas this year, which is one weekend fewer than in 2012. ShopperTrak, a market research firm in Chicago, says the best days to shop for deals won’t be this weekend, but next week once the heavy crowds disperse, and retailers keep discounted items on their shelves.
“There’s a reason Black Friday and the Saturday before Christmas attract the heaviest crowds – retailers flood consumers with discounts and special offers on those days. But quieter shopping days also present their fair share of deals for consumers, along with more attentive customer service and a leisurely shopping experience,” ShopperTrak founder and Executive Vice President Bill Martin said in a statement.