US shoppers are coming out in force this holiday season, but the festiveness is being tempered by inflationary pressures that have abated but not completely faded.
After the sticker shock during the latter stages of the COVID-19 pandemic, a familiar frustration has settled in toward consumer prices that remain broadly elevated even if they have stopped rising rapidly.
Americans are “ready to open their wallets this holiday season,” said the Conference Board ahead of Black Friday — the day after Thanksgiving, which this year, falls on Nov. 28 — that traditionally sees US stores kick off the Christmas shopping season with steep discounts. “US consumers plan to spend more than last year, but inflation reduces how far their dollars can go.”
Photo: Samuel Corum, AFP
In this environment, nobody expects to pay the full price for items.
“Holiday shoppers are likely to increase their budgets this year versus last year but remain selective and are looking for discounts,” Morgan Stanley said in a note.
The investment bank’s survey found that 35 percent planned to spend more this holiday season. But nearly two-thirds would skip a purchase if an item is not adequately discounted, meaning a price cut of more than 20 percent.
“It’s gonna be a good year, but I don’t think that growth is going to be spectacular because consumers are still under pressure,” GlobalData managing director and retail analyst Neil Saunders said.
Inflation remains above the US Federal Reserve’s 2 percent long-term target, rising to 2.6 percent on an annual basis last month from 2.4 percent in September. But that’s significantly below the peak level of 9.1 percent in June 2022.
“There is still a perception among consumers that things are quite difficult,” Saunders said. “So people are being quite cautious and careful in their spending.”
How US president-elect Donald Trump’s looming presidency will affect inflation remains to be seen. Industry groups have warned that tariffs favored by the Republican could reignite pricing pressures.
The National Retail Federation (NRF) projected that a Trump tariff proposal floated during the campaign would dent US consumer budgets by as much as US$78 billion annually.
But while tough potential trade actions are already preoccupying Washington trade groups, tariffs are not on consumer radars for this shopping season, Saunders said.
One challenge this year will be the shortness of the season. Black Friday falls at the latest possible date on Nov. 29, shortening the stretch between Turkey Day and Christmas on Dec. 25.
But the impact of that dynamic on this year’s sales should not be overstated. Retailers in recent years have pulled the holiday shopping season ahead, with some vendors launching online “Black Friday” promotions as early as October.
Among the companies that have already begun discounts: the big-box chains Walmart Inc and Target Corp, electronics giant Best Buy Co and home-improvement retailer Home Depot Inc. Amazon.com Inc officially launched “Black Friday Week” on Thursday last week.
The NRF has projected holiday spending growth of between 2.5 and 3.5 percent in this season compared with the year-ago period, to as much as US$989 billion over the two-month period.
Economists with the trade group have pointed to an easing of gasoline prices as a supportive factor.
Online sales are projected to grow as much as nine percent this season, extending a long-term trend. Black Friday itself has become a big occasion for online shopping, along with “Cyber Monday” three days later.
“Over time, we’ve moved from a period where it was just Black Friday, and maybe a little of the weekend, to it being a period of discounting that starts very early,” Saunders said. “It’s seasonal discounts.”
There has been a diminishment of “doorbuster” sales that are known to draw hordes of waiting crowds, sometimes resulting in injury or worse. Instead, increasing numbers of consumers are spreading out their purchases or opting to click through Black Friday promotions at home.
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
Popular vape brands such as Geek Bar might get more expensive in the US — if you can find them at all. Shipments of vapes from China to the US ground to a near halt last month from a year ago, official data showed, hit by US President Donald Trump’s tariffs and a crackdown on unauthorized e-cigarettes in the world’s biggest market for smoking alternatives. That includes Geek Bar, a brand of flavored vapes that is not authorized to sell in the US, but which had been widely available due to porous import controls. One retailer, who asked not to be named, because
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce
STILL LOADED: Last year’s richest person, Quanta Computer Inc chairman Barry Lam, dropped to second place despite an 8 percent increase in his wealth to US$12.6 billion Staff writer, with CNA Daniel Tsai (蔡明忠) and Richard Tsai (蔡明興), the brothers who run Fubon Group (富邦集團), topped the Forbes list of Taiwan’s 50 richest people this year, released on Wednesday in New York. The magazine said that a stronger New Taiwan dollar pushed the combined wealth of Taiwan’s 50 richest people up 13 percent, from US$174 billion to US$197 billion, with 36 of the people on the list seeing their wealth increase. That came as Taiwan’s economy grew 4.6 percent last year, its fastest pace in three years, driven by the strong performance of the semiconductor industry, the magazine said. The Tsai
RSS