Black Friday: Consumers still spending despite economic headwinds

Millions expected to flock to stores and make online purchases as holiday shopping season begins

A poster advertises a deal for Black Friday at a clothing store in Birmingham, England. Reuters
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Consumers in the US and around the globe are expected to spend big in stores and online on Black Friday despite inflation and high interest rates biting into shoppers' finances.

Retailers offer large discounts during Black Friday – an event that follows Thanksgiving Day in the US and kicks off the holiday shopping season – as consumers look for deals on electronics, toys, apparel and other big-ticket items.

But consumers continue to be hampered by inflation, even though it has climbed down considerably since reaching 7.1 per cent last year. And US interest rates – which sit at a 22-year high – will add to these burdens through credit card interest.

Despite this, a record 130.7 million people will shop on Black Friday in the US this year, accounting for the 182 million shoppers expected during the five-day Thanksgiving holiday period, according to the National Retail Federation.

Adobe expects that consumers will generate more than $221.8 billion for online retail from November to December, up 48 per cent year on year. The analytics company predicts holiday spend growth could fluctuate between 3.5 per cent and 5.5 per cent year on year.

Higher costs and inflation – which sits at 3.2 per cent – are playing a role as consumers go on the hunt for discounts.

Sixty-two per cent of survey respondents told Adobe that finding deals are important for their shopping. Separately, PwC found that three quarters of shoppers are looking for deals to counter higher prices they face elsewhere.

Black Friday in UK to be 'busiest one ever'

Black Friday's origins in the US date back to the 1980s, but retailers and shoppers worldwide have recently begun participating in the tradition.

And like in the US, British consumers are still spending on Black Friday even as they are faced with 4.6 per cent inflation.

British consumers had made 6.66 million transactions as of 2pm GMT on Friday, according to Nationwide Building Society. The number of purchases is 4 per cent higher than Black Friday last year and an 11 per cent increase from 2021.

“Despite cost-of-living pressures, shoppers are making the most of the deals on offer and grabbing a bargain,” said Mark Nalder, director of payment strategy at Nationwide.

He said that the data “suggests that this year’s Black Friday is going to be the busiest one ever”.

And transaction volumes were up 1.42 per cent year on year in the week leading up to Black Friday in the UK according to Barclays, which sees nearly half of credit and debit card transactions in the country.

The UK bank said it expects 34 per cent of its customers to shop on Black Friday and Cyber Monday, including a 50 per cent increase in shoppers aged between 18 and 34 years old.

In France, nearly two thirds of French citizens earning less than €20,000 see Black Friday as a chance to buy goods at a cheaper cost amid inflation, according to PwC.

The French consumer will spend an average of $259 on Black Friday, little changed from 2022.

Consumers in the UAE, Italy, Canada and elsewhere will also be looking to find deep discounts.

No longer a one-day event

Black Friday has traditionally been a one-day event, with customers queuing outside retailers on Thursday night hoping to secure big deals.

But the rise of online shopping has changed this dynamic, with shoppers looking for deals well before the holiday. Delays in shipping and snarled supply chains caused by the Covid-19 pandemic have gone to cement this new trend.

Amazon, for instance, began its holiday season on October 10 with its Prime Big Deal Days. And its Black Friday event – which offered steep discounts on products ranging from espresso machines to 4k smart TVS – began on November 17.

Best Buy, Target and Lowes also began their holiday discounts well before Black Friday.

The data shows that many holiday shoppers began their spending before season actually began.

Consumers spent $63.2 billion in online shopping from November 1 to 20, according to data from Adobe Analytics.

Updated: November 24, 2023, 7:37 PM