Survey Reveals Shoppers Intend to Reduce Black Friday Spending
As the holiday shopping season approaches, American consumers are preparing to scale back their spending during Black Friday and Cyber Monday sales. According to new findings from Deloitte, shoppers plan to decrease their expenditures by 4% compared to last year, driven by rising living costs and concerns about the economy.
Consumer Spending Trends
This marks a significant change in behavior. Previous Deloitte surveys have shown an increase in spending intentions since 2021, especially during the post-Thanksgiving weekend. However, a new trend indicates a pullback across various income levels:
- Consumers earning less than $50,000 a year are expected to spend 12% less.
- Shoppers with incomes over $200,000 anticipate an 18% reduction in spending.
Economic Concerns Affecting Consumer Sentiment
Many shoppers are feeling the pressure of the current economic climate. Consumer confidence recently hit one of its lowest levels, as reported by the University of Michigan’s consumer sentiment survey. This downturn comes just above the record low seen in June 2022, amid rising inflation rates.
Key concerns identified in the survey include:
- 69% of respondents expect a rise in unemployment over the next year.
- Worries about persistent high prices continue to weigh on financial confidence.
Inflation and Its Impact
Inflation has been accelerating again, reaching an annual rate of 3% as of September. Consumers predict inflation could rise to 4.5% by the next year, which places additional strain on household budgets.
Retail Performance Insights
Recent retail earnings reports reveal shifting consumer behavior. Walmart, for instance, reported strong results as shoppers increasingly seek discounts on essential items. The retailer noted a trend where higher-income families are shopping at discount stores, while lower-income households face heightened financial pressure.
In contrast, brands associated with luxury purchases, such as Target and Bath & Body Works, performed below expectations. This suggests that consumers are prioritizing essential purchases over discretionary spending.
The Rise of Financing Options
As shopping habits evolve, consumers are also turning to financing options to manage their expenses. A PayPal report indicated that half of shoppers plan to use “buy now, pay later” services for their holiday shopping. This trend is particularly popular among younger shoppers, where:
- 39% of Gen Z and millennials intend to utilize such services during Black Friday sales.
While these financing options help spread out the cost of purchases, experts warn that they can lead to overspending and unmanageable debt.
In conclusion, as Black Friday approaches, American shoppers are altering their plans in response to economic pressures. The expected reduction in spending highlights the significant impact of inflation and consumer sentiment on holiday shopping trends.
