Home NewsStock Market News US retailers strive to exchange low discounts for high sales on Black Friday | Anue tycoon-US stock radar

US retailers strive to exchange low discounts for high sales on Black Friday | Anue tycoon-US stock radar

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US retailers strive to exchange low discounts for high sales on Black Friday | Anue tycoon-US stock radar

Major retailers are under intense pressure on Black Friday, with several earnings reports saying sales could slow heading into the “do-or-die” holiday shopping season.

Macy’s (M-US), Target (TGT-US), Kohl’s (KSS-US), Gap (GPS-US) and Nordstrom (JWN-US) all point to late October and early November sales stagnated.

Target lowered its forecast for the holiday season, while Kohl’s lowered its outlook, citing slow sales. Macy’s Chief Executive Officer Jeff Gennette said shoppers continued to visit its stores and website, but the browsing was not converting into purchases. Best Buy CEO Corie Barry said shoppers were more interested in the promotion than usual.

The results illustrate an emerging theme this season: Shoppers are waiting for the biggest and best discounts, especially as inflation hits wallets.

“People are willing to wait and are patient,” said Rob Garf, vice president and general manager of retail at Salesforce, a software company that tracks shopping trends.

The huge demand for discounts is driving even higher expectations for a bigger Black Friday weekend. Many major retailers, including Walmart (WMT-US) and Target, are closed for Thanksgiving. However, a record 166.3 million people are expected to shop between Thursday (24th) and Cyber ​​Monday (28th), according to an annual survey by the National Retail Federation (NRF) and Prosper Insights & Analytics.

That’s nearly 8 million more people than a year ago and the highest estimate since the NRF started tracking the data in 2017.

Retailers and industry watchers have been expecting a quieter holiday season, with sales more likely to be driven by higher prices than huge demand for merchandise. NRF forecast sales growth of 6% to 8%, including a boost from near-record inflation.

Travel and personal experiences are vying for Americans’ wallets more intensely as concerns about the coronavirus fade.

Retail executives who have reported earnings talk of returning to pre-pandemic gift shopping. Over the past two years, consumers have tended to shop ahead and spread out gift purchases amid concerns over surging online sales and port congestion that could lead to shipping delays and stock-outs.

This year, retailers are again starting sales early, but with the aim of clearing excess inventory and catering to more value-conscious shoppers. Amazon (AMZN-US) held a second Prime Day-like sale in October, while Target and Walmart launched around the same time.

So far, however, shoppers have been in no rush to make a purchase.

Best Buy CEO Barry said that compared with last year, the company’s October sales were the lowest this season. That’s a far cry from a year ago, when shoppers bought early and feared they might not get all the items they wanted, she said.

“There’s no such buying momentum this year,” she said. “The average consumer knows there will be plenty of inventory and prices will be competitive.”

Best Buy now expects customers to spend more on Black Friday, Cyber ​​Monday and the two weeks leading up to Christmas, she said. She said the company has extended hours, staffed stores with more staff and is even doing regular inventory checks to do so.

Other factors may also dampen demand in late October and November. On recent earnings calls, executives from Gap and Nordstrom cited unseasonably warm weather in the fall, which could prompt consumers to hold off on buying winter coats or thick sweaters.

In addition, some Americans are paying attention to the mid-term elections; Chris Horvers, an equity research analyst for retail at JP Morgan Chase, said that the intense campaign has drawn attention and may also lead to economic uncertainty.

But, he added, the weaker start to the holiday season also raised some alarms about consumer health. Retailers have been cautious in sharing their expectations for the current quarter; they signaled consumers were dipping into savings accounts and piling up credit card debt, even after better-than-expected third-quarter results.

“Consumers are not only shifting money toward travel and entertainment, they’re shifting money toward demand,” Hovers said.

Plus, it’s not all good news if people are out on Black Friday weekend, he said, “if consumers respond to promotions and stores this week, but then stop spending shortly afterwards, it will reinforce the concerns that retailers already have. That means consumers only shop when they need it, and only when there is a discount.”

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