After almost two years of pandemic gloom, American consumers appear primed to spend generously for the holidays in spite of worries over inflation and item availability.
“All indications are that US consumers are looking to celebrate the holiday season,” Target's chief executive Brian Cornell said last week.
“They are anxious to get together with family and friends.”
But petrol prices are up more than 60 per cent from a year ago and this year's Thanksgiving feast will cost an estimated 14 per cent more, said the American Farm Bureau Federation, an agricultural lobbying group.
Shortages are another concern.
In an earnings conference call last week, Target, Walmart and other big-box retailers offered reassurances that they would have sufficient inventory after recent worries that supply chain snafus would leave Christmas stockings empty.
The US supply chain backlog, explained
US President Joe Biden said that co-ordination between the government and private companies will help keep shelves.
“That's good news for those mums and dads worried about whether their Christmas gifts will be available. It goes for everything from bicycles to ice skates,” Mr Biden said.
But there will certainly be gaps, with popular gaming consoles and some electronics from Apple and other companies especially hard to find.
Worries about shortages began building significantly in October, when the White House announced an initiative to shift key supply chain infrastructure to 24-hour service following delays at West Coast ports.
Mr Biden said that the number of containers blocking docks are down by a third, while shipping prices are down by a quarter.
There have been some signs of progress since then. The Port of Los Angeles last week reported a 35 per cent drop in the number of containers that have been stuck there for nine days or longer.
The National Retail Federation projects holiday sales will grow between 8.5 and 10.5 per cent, noting that a “stellar” season rests in part on whether retailers can replenish merchandise.
Retailers have taken extraordinary steps this season, such as importing and storing items earlier than usual, ordering shipments by air freight and in some cases even chartering their own vessels.
A prolonged 'Black Friday'
Retailers started promoting online holiday “deals” as early as September this year, as the supply chain logjam threatened to block them from bringing new merchandise from Asia into the US in the weeks before the Christmas holiday.
Also, some merchants have reduced Black Friday store hours as shoppers turn to online shopping.
A Reuters/Ipsos poll of about 1,000 people showed that more than a fifth of shoppers said they planned to buy gifts primarily online this year, while only 12 per cent said they would mainly shop in stores.
Online sales on Black Friday itself are expected to increase by 5 per cent to $9.5 billion, the Adobe Digital Economy Index reported.
Walmart and Target both said they would invest more in same-day options, including the ability for shoppers to pick up merchandise ordered online.
To be sure, some retailers said they are preparing for brick-and-mortar stores to make a comeback.
“We’re seeing our customers return to in-store shopping,” William White, Walmart's chief marketing officer, told Reuters. Mr White also said Walmart has expanded its toy assortment by “more than double".
For Marc Ivan, a 23-year-old student in Philadelphia, going to stores is not a tradition he plans to give up, even though he said he will do most of his shopping online as early as possible this week.
“I'll still go out on Black Friday, just to do some casual shopping and hang out with friends,” he said.
Agencies contributed to this report
