Bargain hunters ventured out in chilly weather to buy Christmas gifts on Black Friday only to discover that many U.S retailers offered smaller price markdowns this year because of tight supplies.
COVID fears and less doorbuster sales thinned crowds the day after the U.S. Thanksgiving holiday, which kicks off the year-end holiday shopping season.
On the same day, the World Health Organization named the newly identified omicron variant of the coronavirus as a variant of concern, triggering worldwide alarm and a selloff in the U.S. stock market.
Cowen analysts said that stores on Black Friday had the lowest clearance goods for sale in five years or more. Most shoppers chose to pick up merchandise curbside rather than to venturing inside stores.
Black Friday retail sales are up 29.8% versus 2020 through 3 p.m. According to Mastercard SpendingPulse, ET.
Consumers spent $6.6 billion up to 9 p.m. According to Adobe Digital Economy Index, total spending would be between $8.8 billion and $9.2 billion for the day.
Cowen said Walmart and Target were ahead of other retailers in part because of their buy-online pick-up at-store services. Target added more than 18,000 drive-up parking spaces, more than doubled spots compared to last year. The company said that it had the most popular Black Friday deals, including $219.99 for a KitchenAid professional stand mixer that sells for $429.99, and savings of up to $60 on Apple Watches and AirPods.
Walmart, Target, and Best Buy are expected to post lower fourth-quarter profit margins because of tight inventory and higher costs for raw materials, freight and labor. Even though the holiday season should be okay from a sales standpoint, because retailers are discounting less - the margins won't necessarily be higher because of inflation, said Forrester Research analyst Sucharita Kodali.
The U.S. consumers are entering a holiday season flush with cash thanks to the savings from multiple rounds of government pandemic relief and double-digit wage increases as businesses compete for workers. The supply chain logjam has prevented retailers from replenishing year-end merchandise, which is why they lured shoppers to make holiday purchases as early as September this year.
A survey by Deloitte showed that people had spent 80% -- 85% of their holiday gift budgets before Black Friday. Online sales are estimated to hit a record $207 billion, up 10% from last year, according to the Adobe Digital Economy Index. The National Retail Federation forecasts combined brick-and- mortar and online holiday sales to be between $843.4 billion and $859 billion, 8.5% to 10.5% higher than last year.
Elver Gomez, a 21-year-old student in Chicago, said he didn't find the Apple and Microsoft laptops he wanted while shopping at a Best Buy store Friday morning. This year it seems like it's either out of stock or for sale at what he said was not that great of a price. Best Buy warned of limited qualities and no rain checks on its website. Electronics - in short supply due to a global chip shortage - had the highest out-of stock levels, followed by personal care and home and garden, according to Adobe.