Black Friday deals start early, last longer with inflation

Black Friday is fast approaching, and for several days, several retailers in Water Tower Place will be advertising big discounts.

The American Girl store was advertising a 20% off Black Friday Early Access sale. Forever 21 was up to 70% off, American Eagle was up to 60% off, Hollister was 25% to 40% off, and Aeropostale was advertising 50% to 70% off. (Exclusions apply to most deals.)

But, despite the reduction in prices, not everyone who visited the Michigan Avenue Mall in recent days to shop. One resident of Moscow Region told “Tribune” that due to high prices this year there will be many more “showcases” for the holidays.

Marcha Miller, 41, and Mary Heinds, 38, of Uptown, were at Water Tower Place for an interactive Harry Potter exhibit at the mall. But Miller, a self-confident crafter, said she plans to make most of the couple’s holiday gifts this year, such as a Marvel-themed crochet blanket she plans to give her brother for Christmas.

“Everything has been so disrupted for two years because of COVID,” Miller said. “Now everything is open again and you still can’t do anything because everything is so expensive.”

Although the rate of inflation is cooling, consumer prices still rose 7.7% in October compared to the same period last year, according to the Bureau of Labor Statistics. Major retailers responded to inflation by offering significant price cuts and holiday deals that began as early as October.

As Americans grapple with higher prices for everything from rent to groceries, retailers are well aware that consumers have less money than last year. The National Retail Federation predicts that holiday retail spending will grow this year at about the same rate as inflation, or between 6% and 8%, to between $942.6 billion and $960.4 billion. Deloitte predicts a decline in holiday retail sales sales growth between 4% and 6%.

“Battling a 40-year record high inflation is certainly reducing the purchasing power of our customers,” The Children’s Place Chief Executive Officer Jane Elfers said in November on earnings. “Now our client is in a position where he has to choose between personal expenses and essential expenses. Food went up, gas went up.”

Nearly 60% of people surveyed by Chicago-based research firm Numerator said they worry about being able to afford holiday gifts. And 93% said they plan to adjust their shopping habits to accommodate price increases, such as looking for extra sales or buying gifts for fewer people.

“Consumers are experiencing increasing levels of stress, driven by persistently high inflation, rapidly rising interest rates and a heightened sense of uncertainty about their economic outlook,” Target CEO Brian Cornell told investors during this month’s earnings call.

Like many other retailers, the company responded by offering Black Friday deals early. During its earnings call in early November, Chief Development Officer Christina Hennington said Target was already offering some of the best prices of the season. The company also promises customers a price match if the price of an item they purchase at Target drops later in the season, up until Christmas Eve.

“People have been asking me, ‘What’s the trend, what’s the popular trend for the holiday season?'” said Gabriela Santaniello, founder of retail research firm A Line Partners. “Your budget is your trend.”

According to Deloitte’s annual holiday shopping survey, more than 30% of respondents in Chicago said they plan to start holiday shopping earlier this year, with nearly a quarter of respondents saying they plan to spend their holiday budget before the end of the year. October.

There are two reasons for the move to earlier holiday discounts, said Neil Saunders, managing director of GlobalData, a retail consultancy. One is that most retailers have too much inventory, in part because they order excessive inventory in an attempt to avoid duplication a deficit that plagued last season. Another is that price-conscious shoppers want to spread out their holiday spending rather than do it all at once, Saunders said.

However, nearly 70% of people surveyed by the National Retail Federation said they planned to shop on Thanksgiving weekend, and the same percentage of shoppers said they planned to shop on Black Friday. Thirty-eight percent of holiday weekend shoppers said they planned to shop on Cyber ​​Monday.

The best deals still start on Black Friday — and may continue into the following weeks, especially if sales aren’t strong on the day itself, Saunders said.

“Retailers could look at inventory after Black Friday and say, you know what, we’ve got a lot of stuff we need to sell,” he said. “So they could make a lot more discounts in those weeks after.”

The discounts are unlikely to be significantly better on Black Friday than on Cyber ​​Monday or vice versa, Santaniello said. “If a retailer is 40% off on Black Friday, it’s likely to be 40% off on Monday,” she said.

Santaniello also doesn’t expect shoppers to get as much financial benefit from Black Friday shopping in stores than online, though they may save money on shipping if the retailer doesn’t offer it for free, she said.

The NRF expects a slight increase in Black Friday shoppers in stores this year, with 67% of those who shopped that day saying they planned to do so in person, up from 64% last year.

Chicago Loop Alliance marketing and communications manager Kiana DiStasi said downtown holiday foot traffic could reach or exceed 2019 levels this year. According to the Loop Alliance, pedestrian traffic in the Loop increased by 28% last week compared to the same period last year.

Chicago-area shoppers plan to spend just over 60% of their holiday budgets online, according to Deloitte.

Experts say the days of lining up at the grocery store before Thanksgiving leftovers get cold are over.

“Part of it is economic; it just doesn’t make sense,” Saunders said. “But some of it is also because they recognize that their employees need a day off.”

In the Chicago area, Chicago Premium Outlets in Aurora will be open from 10 a.m. to 8 p.m. on Thanksgiving Day, up from last year when they were closed. But Water Tower Place, Oakbrook Center, Woodfield Mall, Northbrook Court, Orland Square and Gurnee Mills will be closed Thursday. On Black Friday, shopping malls will open as early as 6 a.m.

Other major retailers, such as Kohl’s, Target, Macy’s, Walmart, JC Penney and Best Buy, will be closed on Thanksgiving Day but will open as early as 5 a.m. or 6 a.m. on Black Friday.