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US ‘Black Friday’ overshadows sustained inflation

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Black Friday is a sale that originated in the United States when retailers offer discounts the day after Thanksgiving.

Black Friday is a sale that originated in the United States when retailers offer discounts the day after Thanksgiving.

In the US, heavy discounts are expected on ‘Black Friday’, the start of the traditional Christmas shopping season, but the challenge is getting consumers to attend the event amidst strong inflation.

A year ago, retailers faced product shortages in the wake of logistics delays and factory closures caused by the covid-19 pandemic.

To avoid a similar situation, the sector brought forward Christmas imports this year, but remained vulnerable to oversupply as consumers cut back.

“Yesterday’s problem was the lack of supply,” said Neil Saunders, managing director of consulting firm GlobalData Retail.

Sanders explained that retailers have been destocking inventory in recent months, but the oversupply has created exceptional conditions for bargain hunters in areas such as electronics, home appliances and clothing. ing.

Juameelah Henderson is always checking out what’s on sale.

The price was “pretty good,” he said.

Rising costs of basic commodities such as gasoline, meat and grains are a problem for the entire economy, but they don’t hit everyone equally.

“Low-income consumers (consumers) are clearly more vulnerable to high inflation,” said Claire Lee, an analyst at Moody’s.

decrease in savings

The price increase is also slowing down. Still, the November 10 consumer price index was 7.7% in his 12 months, high for an American.

So far, U.S. consumers have been resilient in the face of the various crises they have experienced since the start of the pandemic, spending more than expected even as confidence indicators showed concern. .

Part of the explanation is that many households took advantage of government assistance during the pandemic, when consumption was at record lows due to restrictions imposed to combat the spread of the virus, resulting in unusually solid savings. I have.

But the cushion is starting to shrink. According to Moody’s, U.S. savings peaked at $2.5 trillion in mid-2021 before falling again to $1.7 trillion a year later.

And consumers with annual incomes below $35,000 were the first to be affected, with their savings dropping by 39% in the first six months of the year. As a result, consumer credit is on the rise, according to Federal Reserve (Fed) data.

“The pressure continues,” said Michael Witinski, general manager of low-cost chain Dollar Tree, saying consumers’ “changes” are “to focus more on their needs and make sure they have enough money to last.” We are trying to secure it,” he said. Moon”.

mixed image

Recent retailer earnings reports offer mixed perspectives on consumer health.

The Target supermarket chain has been hit hard, with sales plummeting in October, which could herald a slump in the holiday season.

“Consumers have been dealing with very stubborn inflation quarter after quarter,” Chief Executive Brian Cornell said on a conference call with analysts. “They’re very cautious, very cautious, saying, ‘If I have to buy, I want to get a good deal.'”

But rival Lowe’s, which specializes in interiors, is optimistic, pointing to a “solid” third quarter with no signs of weakening. said Marvin Ellison of

Consumers like Charmaine Taylor, who frequently checks airline websites, are on the lookout. So far, Taylor has seen her travel aspirations frustrated by the exorbitant prices of plane tickets, and a woman who works at a daycare has decided to spend more on gifts for her family this year. I don’t know if I can spend the money on

“I’m trying to buy you a present,” Taylor said at a park in Harlem this week.

Source: Diario.Elmundo

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