Black Friday sales have begun, and experts are expecting record spending
Diane Frassanito, co-owner of Frassanito Jewelers in Huntington, helps Ingrid Lea of Northport as she shops Tuesday. Credit: Newsday/Thomas A. Ferrara
Headed to stores or shopping online on Black Friday?
If so, be flexible, retail experts suggest.
Despite some large-chain retailers offering Black Friday deals days earlier, the five-day period between Thanksgiving and Cyber Monday still is considered the unofficial kickoff of the holiday shopping season, and a bellwether for how well retail will perform during the period.
Record-high spending is expected this holiday season, retail experts said.
But supply chain issues, including an insufficient number of truck drivers to make deliveries amid the COVID-19 pandemic, will mean delays in getting some items to stores, especially for small businesses.
There might also be less variety of some goods.
Some of the biggest shipping delays have been with large appliances, laptops and cars, according to Consumer Reports.
Friends Amelia Fuller of Blue Point, left, Kara Downing of Bayport and Madison McCurdy of Bayport take a break from shopping at Tanger Outlets Riverhead on Black Friday 2020. Credit: Newsday/John Paraskevas
"Black Friday and Cyber Monday are still good indicators of where the consumer is at. It may be that the timing is just getting more distorted, especially with supply chain issues and whether consumers are concerned about getting the products they want," said Raya Sokolyanska, vice president/senior analyst at Moody’s Corp., a Manhattan-based financial services company.
Jeweler stocked up early
Expecting supply chain issues, Frassanito Jewelers in Huntington village was able to buy merchandise from vendors earlier in the summer than usual and to overstock its inventory because it is a well-established business that could afford to do so, said Diane Frassanito, co-owner of the 86-year-old retailer.
"I feel sorry for a lot of up-and-coming or young businesses that don’t have the capital to do that," said Frassanito, who expects December to be a record-breaking month for the family-owned shop.
The supply chain issues will affect small businesses more than large chains, which have the ability to buy products early and in large volumes, as well as pay more for expedited shipping, said Mark Szakonyi, executive editor of The Journal of Commerce, part of IHS Markit.
"You have a lot of other levers to pull," he said.
Some big-box chains, including Walmart, Target and Home Depot, said last week that they had enough inventory to carry them through the holidays.
What makes this year different
High consumer demand is projected to spur record spending — and a record rate of spending growth — during the holiday season, as a continuation of strong retail sales that have taken place so far in 2021, retail experts said.
But the overall holiday shopping picture is different from typical seasons for several reasons.
In addition to the supply chain issues, retailers contending with labor shortages are having to pay higher wages to attract and retain workers. Those costs are getting passed to consumers.
The current inflation rate is 6.2%, the highest since 1990.
An estimated 158.3 million people, or 66 percent of holiday shoppers, are expected to shop from Thanksgiving to Cyber Monday, according to a November survey conducted by the National Retail Federation, a Washington, D.C.-based trade group.
That is about 2 million more people than the number who shopped during the five-day period last year, but less than the 165.3 million who shopped in 2019, before the pandemic.
Hey, big spenders
The National Retail Federation is projecting that holiday sales in November and December will rise between 8.5% and 10.5% to between $843.4 billion and $859 billion, compared to holiday spending in the 2020 season. The season will set records for spending growth and the dollar amount spent, the federation projected.
Other projections are more optimistic.
Sales in November and December are projected to rise 14% to $886 billion compared to the same two months last year, according to IHS Markit, a market information service headquartered in London. Online holiday sales, which will account for 23% of all holiday sales, are projected to rise 15% to $206 billion during the two-month period, IHS said.
Retail sales are strong this year due in part to stimulus check payments to the public.
"The other reason is just due to the pandemic and the shifting around of what people spend money on," said James Bohnaker, associate director and economist in the Boston office of IHS Markit.
As attendance at concert venues, sports stadiums, movie theaters and other entertainment venues was reduced — or eliminated — during the pandemic, consumers shifted their spending to goods, such as sports equipment, home decor and jewelry.
Thanksgiving Day closures
As with last year, most major retailers' brick-and-mortar stores will be closed Thanksgiving, due in part to the difficulty in retaining and attracting workers during the pandemic, industry experts said.
But retailers are also spreading out the deals.
Best Buy launched its Black Friday deals Friday, Target started Sunday and Walmart started Monday, said Kristin McGrath, shopping expert at BlackFriday.com.
"These retailers will release more deals on Thanksgiving. But Black Friday basically starts a week early now. … I think retailers want to extend the hype as long as they can," she said.
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.
