By ANNE D’INNOCENZIO, HALELUYA HADERO and ALEXANDRA OLSON
AP Retail Writers
NEW YORK (AP) — Cautious shoppers hunted for the best deals at stores and online as retailers offered new Black Friday discounts to entice consumers eager to start buying holiday gifts but weighed down by inflation.
Due to elevated prices for food, rent, gasoline and other essentials, many people were being more selective, reluctant to spend unless there was a big sale. Some were dipping more into savings, turning to “buy now, pay later” services that allow payment in installments, or running up their credit cards at a time when the Federal Reserve is hiking rates to cool the U.S. economy.
Sheila Diggs, 55, went to a Walmart in Mount Airy, Maryland early Friday looking for a deal on a coffee maker. To save money this year, she said the adults in her family are drawing names and selecting one person to shop for.
“Everything’s going up but your paycheck,” said Diggs, who manages medical records at a local hospital.
This year’s trends are a contrast from a year ago when consumers were buying early for fear of not getting what they needed amid supply-network clogs. Stores didn’t have to discount much because they were struggling to bring in items.
Early shopping turned out to be a fleeting trend, said Rob Garf, vice president and general manager of retail at Salesforce, which tracks online sales. People this year are holding out for the best bargains, and retailers responded this week with more attractive online deals after offering mostly lackluster discounts earlier in the season.
The average discount rate in the U.S. across all categories online was 31% on Thanksgiving, up from 27% the previous year, according to Salesforce data. The steepest discounts were in home appliances, general apparel, makeup and luxury handbags.
Macy’s Herald Square in Manhattan, where discounts included 60% off fashion jewelry and 50% off select shoes, was bustling with shoppers early Friday.
The traffic was “significantly larger” on Black Friday compared to the previous two years because shoppers feel more comfortable in crowds, Macy’s CEO Jeff Gennette said.
He said that bestsellers from Macy’s online sale, which started last weekend, included 50% off beauty sets. Last year Macy’s, like many other stores, had supply chain issues and some of the gifts didn’t arrive until after Christmas.
“Right now we are set and ready to go, “ he said.
Sophia Rose, 40, a respiratory specialist visiting Manhattan from Albany, New York, was heading into Macy’s with big plans to splurge after scrimping last year when she was still in school. She put herself on a budget for food and gas to cope with inflation but had already spent $2,000 for holiday gifts, and plans to spend a total of $6,000.
“I am going to touch every floor,” she said. “That’s the plan.”
Customer traffic was also higher than last year at Mall of America in Bloomington, Minnesota, according to Jill Renslow, executive vice president of business development of the shopping center. She said 10,000 people were at the sprawling mall during the first hour after the 7 a.m. opening, though inflation prompted many shoppers to figure out what to buy before showing up.
“With the economy, people are planning a little more,” she said.
Delmarie Quinones, 30, went to a Best Buy in Manhattan to pick up a laptop and printer she ordered online at $179, down from $379. Quinones, a health home aide, said that higher prices on food and other expenses are making her reduce her spending from a year ago, when she had money from government child tax-credit payments.
“I can’t get what I used to get,” said the mother of five children, ages 1 to 13. “Even when it was back to school, getting them essentials was difficult.”
Major retailers including Walmart and Target stuck with their pandemic-era decision to close stores on Thanksgiving Day, moving away from doorbusters and instead pushing discounts on their websites.
But people are still shopping on Thanksgiving — online. Garf said Salesforce data showed online sales spiked in the evening during the holiday this year, suggesting people went from feasting to phone shopping. And with holiday travel up, he said a greater share of online shopping occurred on mobile devices this year.
“The mobile phone has become the remote control of our daily lives, and this led to an increase in shopping on the couch as consumers settled in after Thanksgiving dinner,” Garf said.
But with more shoppers visiting stores this year, growth in online sales slowed.
Shoppers spent $5.3 billion online on Thanksgiving Day, up 2.9% from the holiday last year, according to Adobe Analytics, which monitors spending across websites. Adobe expects that online buying on Black Friday will hit $9 billion, up just 1% from a year ago.
Black Friday saw some of the labor unrest that has rippled through the retail industry over the past year. A coalition of trade unions and advocacy organizations are coordinating strikes and walkouts at Amazon facilities in more than 30 countries under a campaign called “Make Amazon Pay.” Among other places, hundreds of workers at a facility near the German city of Leipzig staged a protest Friday, calling for better working conditions and higher pay.
And at Walmart stores, some employees had Wednesday’s deadly shooting at a company store in Virginia in the back of their minds.
Jude Anani, a 35-year-old who works at a Walmart store in Columbia, Maryland, said the company offers training on how to react in such circumstances but he would like to see more protection. He was happy to see a police officer standing outside the store, as is typical on Black Friday, and wished that was the case “most of the time during the year.”
Against today’s economic backdrop, the National Retail Federation — the largest retail trade group — expects holiday sales growth will slow to a range of 6% to 8%, from the blistering 13.5% growth of a year ago. However, these figures, which include online spending, aren’t adjusted for inflation, so real spending could even be down from a year ago.
Analysts consider the five-day Black Friday weekend, which includes Cyber Monday, a key barometer of shoppers’ willingness to spend. The two-month period between Thanksgiving and Christmas represents about 20% of the retail industry’s annual sales.
Hadero reported from Mount Airy, Maryland. Olson reported from Arlington, Virginia. Associated Press Personal Finance Writer Cora Lewis in New York contributed to this report.
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