Posted
ConsumptionIn the United States, runaway inflation casts a shadow over Black Friday
While Americans meet this Thursday around the traditional turkey for Thanksgiving, the Christmas shopping season is starting once morest a backdrop of rising prices that are worrying traders and customers.
Black Friday, introduced in the 1960s, falls the day following Thanksgiving Thursday. Americans generally make the bridge that day and begin their Christmas shopping.
REUTERS
The Christmas shopping season kicked off this Thursday, Thanksgiving Day, in the United States with the kick-off of Black Friday marked this year by significant discounts. But the concern remains strong among traders, concerned regarding rising prices while keeping the hope of seeing consumers at the rendezvous. The world’s largest economy has been struggling for several months with persistently high inflation, which is casting a shadow over the holiday season.
A year ago, concerns were quite different, with the sector facing supply difficulties due to the Covid pandemic. To avoid such a mishap this year, manufacturers have anticipated their orders, this time with a risk of overstock, while consumers are reducing their spending.
For many Americans, rising gas and food prices are a real challenge, but not everyone is equal when it comes to inflation. “Low incomes are clearly more affected by high inflation”, recalls Claire Li, analyst for Moody’s, “because they spend proportionately more on essential products”.
Savings are resisting the crisis, but for how long?
So far, American consumers have shown themselves to be insensitive to the various crises experienced since the start of the pandemic, spending more than expected, even when the confidence indicators underlined their concerns. Part of the explanation was to be found in unusually robust savings, as many households took advantage of government aid during the pandemic, when consumption was at its lowest.
But the cushion is starting to sag: After peaking at $2.5 trillion in mid-2021, U.S. savings fell back to $1.7 trillion a year later, according to Moody’s. And consumers with an annual income of less than $35,000 are the first to be affected, with a 39% drop in their savings over the first six months of the year. As a result, consumer credit is on the rise, according to data from the Federal Reserve.
Black Friday is so named because it allows merchants to take their accounts out of the red numbers into the black. Explanations.
20 minutes
Buy, yes, but on condition of getting a very good deal
The Target chain took the hit, facing a sharp drop in purchases in October, presaging a bad Christmas season to come, and which expects a “very promotional” period, according to its general manager Brian Cornell. “We have consumers who are dealing with persistent inflation quarter following quarter,” he explained during a conference call with analysts, “they are being very cautious, they are very attentive and say, ‘Okay, if I have to buy, I want to make a very good deal”.
But at its competitor Lowe’s, which specializes in decoration, the mood is quite different, with a “solid” third quarter and no signs of slowing down expected. “We are not seeing anything resembling a downturn in purchases,” said its managing director, Marvin Ellison.
Can’t afford to spend so much on family
Consumers, like Charmaine Taylor, remain vigilant. Her travel aspirations have been thwarted by skyrocketing ticket prices, and the daycare worker isn’t sure she’ll be able to spend that much on her family this year. “I try to give them little gifts but I don’t know if I can, inflation hurts a lot,” she laments.
(AFP)
