Nov 29, (V7N) - As the annual Black Friday shopping event approaches, retailers are bracing for a US consumer more focused on value than ever before, driven by persistent inflation concerns and stretched household budgets. While inflation has stabilized since the peak of the Covid pandemic, consumers are still feeling financial pressure, leading to a shift in their shopping behavior.

Increased Focus on Discounts and Bargains
Vivek Pandya, leading insights analyst at Adobe Digital Insights, notes that holiday shoppers in 2024 are "even more preoccupied and very focused around value and discounts." He attributes this to a heightened price sensitivity, with consumers increasingly responsive to deals and event-tied promotions. Consumers have already demonstrated this trend in earlier discount events like Prime Day and Memorial Day, and now, with Black Friday marking the start of the holiday shopping season, retailers are preparing for a more bargain-driven crowd.

Early Promotions and Shifting Strategies
Retailers, such as Target, have been adjusting their strategies by pulling Black Friday promotions ahead of time. With inflation continuing to affect budgets, consumers have learned to wait for the best deals. As Target’s CEO Brian Cornell noted, shoppers are becoming more resourceful, waiting until the last moment to make purchases and stocking up when they find discounts.

The increase in price sensitivity is pushing major retailers like Best Buy to launch Black Friday deals earlier in the season, with the electronics chain starting its promotions a week before Thanksgiving. Best Buy has also revived its "Doorbuster" sales—events once abandoned due to crowd-related incidents—by offering them both in-store and online.

Consumer Spending and Economic Context
Despite these challenges, the National Retail Federation has forecasted holiday spending growth of 2.5 to 3.5 percent in 2024, reaching as much as $989 billion for the two-month holiday period. This projection is partly supported by the easing of gasoline prices and the reduction in some food item costs, though the inflationary environment continues to disproportionately affect lower-income households.

Interestingly, Burlington Stores, a discount retailer, has reported strong sales in low-income areas, suggesting a potential recovery for this demographic as real incomes are beginning to edge upward. Burlington's CEO, Michael O'Sullivan, noted that for the first time since 2021, income growth appears to be improving for lower-income consumers, which may help drive sales in the sector.

Shorter Shopping Season in 2024
This year’s shopping season is shorter by five days due to Thanksgiving falling on its latest possible date, which has forced retailers to accelerate their sales. This has contributed to early online sales growth, with Adobe Digital Insights reporting a 9.6 percent increase in online sales during the first 24 days of the holiday season, surpassing the projected 8.4 percent growth for the entire period.

As the season continues, the focus on value and discounts is expected to remain central to consumer behavior, with retailers competing to meet this demand and navigate the ongoing challenges posed by inflation.