Black Friday: Why it’s OK to Delay Your Holiday Shopping This Year
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Here's your money briefing for Friday, November 24th. I'm J.R. Whelan for The Wall Street Journal. It's Black Friday, the unofficial start of the holiday shopping season. But if you're not in the mood to battle the crowds this weekend or haven't made a gift list and checked it twice, rest assured, this year, it's okay to procrastinate.
Typically, there's a bit of a lull between Thanksgiving and Christmas where, you know, shoppers take a break and retailers raise prices before dropping them again right before Christmas.
We'll talk with Wall Street Journal reporter Suzanne Kappner after the break.
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Millions of Americans will rush out today and over the weekend to start their holiday shopping. But for others, it might make financial sense to wait. Wall Street Journal reporter Suzanne Kappner joins me. So, Suzanne, economists and some big companies are expecting almost no growth in holiday sales this year. Why is that?
consumers really splurged the last few years.
What is the episode's headline message about Black Friday timing?
You know, as they were coming out of the pandemic, leaving their homes for the first time, refreshing their wardrobes, they really, really spent a lot. And retail sales over the past three years were up considerably. So compared to that growth, this year looks a lot more modest and much more in line with the pre-pandemic norm.
Americans have been running up credit card balances since they paid off their debt during the pandemic. Wouldn't that mean that they're in the mood to spend?
Well, actually, the consumer has been under a lot of pressure this year. They had stockpiled savings during the pandemic. Then they use that money to pay down their balances. But they've been running up balances now more recently as they faced more pressure from inflation. They're spending more on food, gas and other necessities, and they just don't have as much bandwidth to spend.
Last year, merchants began cutting prices well in advance of Black Friday. What should shoppers expect this year?
So far, we haven't seen the steep price cuts early in the season the way we did last year. But there is a big expectation that prices are going to drop today and through the weekend as retailers really pull out the stops and try to get people spending.
Why have merchants been slower to reduce prices this year?
Retailers are just not sitting on as much inventory. There was a real glut of merchandise in the market last year due to some supply chain backlogs that happened during the pandemic. And they had to really discount to move those excess goods.
Are there particular products where people should expect deep discounts?
Well, toys are one because toy sales are down 8% so far. And toy merchants are likely getting nervous because they really do the bulk of their business around the holiday season. And with sales so weak, there will be an incentive for them to drop prices.
So what does that mean for people who put off their shopping?
This is a year to procrastinate. There's no reason to shop early this year.
Between this coming weekend and Christmas, do you expect that retailers will steadily bring prices down?
You know, typically there's a bit of a lull between Thanksgiving and Christmas where shoppers take a break and retailers raise prices before dropping them again right before Christmas.
How important is it to retailers that we have one additional weekend before Christmas, the 23rd and 24th of December?
It is significant because a lot of shoppers are going to wait until that last weekend. It gives them a full weekend to do any last minute gift buying. And that means that it's going to be a much more back and loaded season this year.
But if people wait, do they run the risk of products being sold out?
Not so much because the supply chain is back to normal.
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