Black Friday spending slowdown expected, but some Long Island stores hope to beat trend
Katie Goulding, owner of AJ Sunflower Boutique in Center Moriches,said Black Friday and Small Business Saturday are the busiest days of the year. Credit: Danielle Silverman
Retailers are decking the halls with holiday lights, ornaments and sale signs in hopes that weak October sales mean customers will make up for lost time on Black Friday weekend.
The four-day period from Black Friday to Cyber Monday is considered the unofficial kickoff of the holiday shopping season and an indicator of how retail will perform in the two-month period.
But several factors, including consumers’ worries about high inflation and interest rates, as well as the end of the pandemic spending recovery spikes that occurred in the past few years, will likely lead to a slowdown in spending growth this holiday season, retail experts said.
Also, the lifting in September of the three-year pandemic moratorium federal student loan repayments will also weigh on holiday spending, experts said.
WHAT TO KNOW
- The period from Black Friday to Cyber Monday is considered the unofficial kickoff of the holiday shopping season and an indicator of how retail will perform in the two-month period.
- Holiday spending growth is expected to slow down as consumers worry about inflation, interest rates and student loan repayments resuming, retail experts said.
- Many major retailers started their holiday sales deals in October, yet spending was soft that month, so it’s possible that consumers were waiting for better deals.
“Consumer sentiment is pretty low … But inflation in general, even though … there has been some disinflation, it’s slowing down, prices for a lot of groceries are still 30% higher than they were a few years ago,” said Sarah Wyeth, sector lead of Consumer & Retail at S&P Global Ratings in Manhattan.
Retail spending growth is expected to be nominal, between 3% and 3.5% during the quarter, October to December, compared with the same period last year. But adjusted for inflation, the expected growth rate will be 1% to 1.5%, and most of that will be driven by online spending, according to Coresight Research, a Manhattan-based retail analysis provider.
The National Retail Federation is projecting that the spending increase in November and December will be consistent with the average annual holiday spending increase of 3.6% from 2010 to 2019.
Holiday spending this year will grow between 3% and 4% to between $957.3 billion and $966.6 billion, compared with the 5.3% increase to $936.3 billion last year, according to the Washington, D.C.-based trade group’s projections. The federation does not adjust its numbers for inflation.
‘Above and beyond’
Some local retailers are expecting the gift of big sales this weekend.
The busiest day of the year for AJ Sunflower Boutique, which sells women’s clothing in Center Moriches, is Small Business Saturday, followed by Black Friday, owner Katie Goulding said.
The store is offering a lot of doorbusters at prices ranging from $20 to $30 on apparel, and free bonus gifts with purchases of more than $125 this weekend, she said.
Goulding is not seeing or expecting a pullback on consumer spending because her store has a very active social media presence, constantly changes inventory, and provides a high level of customer service, she said.
“I think it’s going to be a strong holiday season for us because we definitely went above and beyond with our … giving” free gifts with purchases,” she said.
At TandyWear, a Commack-based store that sells clothing and accessories for women and teen girls, and its sister store, TandyGirl, which sells items for kids and tweens, sales this year have been the best since the small business was founded in 1995, said owner Tandy Jeckel, who said sales are up about 20% so far this year.
It’s because of “the consistency of new arrivals and keeping it fresh. Constantly posting on social media. Just being consistent on our brand … and customer service. We’re big with customer service,” she said.
Despite the national spending slowdown analysts are predicting, Jeckel expects this holiday season to bring record-high sales for her business, due to a new 8,000-square-foot location for TandyWear, and the fact that the business puts so much emphasis on Black Friday and doesn’t offer many other sales throughout the year.
The waiting game
Many major retailers started their holiday sales deals in October, yet spending was soft that month, so it’s possible that consumers were waiting for better deals — and hoping that pans out this weekend, Wyeth said.
U.S. retail sales fell in October for the first time since March, and most of the sales declines from September to October were in retail segments that are considered holiday-related, such as department stores, sporting goods and hobby stores, and furniture stores, said Scott Hoyt, senior director of consumer economics at Moody’s Analytics, a Manhattan-based economic research provider.
Tory N. Parrish covers retail and small business for Newsday. She has worked at the Pittsburgh Tribune-Review and Observer-Dispatch in Utica, N.Y.
