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Here's Why Retailers Are Not Freaking Out About Black Friday This Year

While inflation is at an all-time high, analysts are still predicting a record high shopping period.

Amid the highest inflation seen in decades, whispers around Black Friday are getting hard to ignore. 

Will retailers offer steep discounts to make up for customers having less money to spend? Or will the desire to take advantage of the sales actually end up working in the big stores' favor?

In October, inflation rose by 6.2% — the biggest one-year jump since 1990. 

While a much of that jump can be attributed to rising fuel, a snarled supply chain and energy costs, everything from food and clothes to the raw materials needed to make popular gadgets have seen price increases over the last year. 

Some analysts predict that this will inevitably trickle down into the biggest shopping period of the year as retailers have to contend with a buyer with less money to spend.

"[Consumers] have only so much money and room on their credit cards," Marshal Cohen, chief industry advisor of The NPD Group, told TheStreet in an email. " ... Higher prices, less promotions and cost of living increases mean less money to spend on gifts."

But even so, number of Americans planning to shop during the weekend after Thanksgiving has risen by nearly 2 million from last year. 

According to a recent report released by the National Retail Federation, an industry lobbying group, 30.6 million plan to shop online or in-store on Thanksgiving Day, 108 million on Black Friday and 62.8 million on Cyber Monday. 

That number is up from 156.6 million in 2020 but not at the 165.3 million seen in 2019.

Between supply chain issues caused by the pandemic and a dollar that stretches less far, Cohen believes that big retailers like Amazon ( (AMZN) - Get Amazon.com, Inc. Report) or Best Buy ( (BBY) - Get Best Buy Co., Inc. Report) may offer discounts smaller than in years past in order to make up for selling fewer units.

"There will be some products that are hot and sell out like always and some because there are shortages," Cohen said. "But then there are products that are already mounting with surplus. Watch for the need to manage these and the deeper discounts [that] will be needed."

Joel Goldstein, president of the Mr. Checkout network of distributors and retail owners, said that inflation is not yet at a level that truly affects the retailer.

He says that's because everything but the most perishable food items has been calculated and ordered months ahead of time to prepare for the weekend between Black Friday and Cyber Monday.

"A lot of the information that's coming through on the raw goods is not selling at the retail level yet, because a lot of the retailers have stocked and all of the cold inventory is still there," Goldstein told TheStreet.

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Goldstein said he expects prices to start rising sometime in 2022 but, for now, widespread talks around inflation can actually have the opposite effect.

Spooked by the prospect of rising prices, many buyers may wish to take advantage of Black Friday sales to get the things they need before that happens.

"I think a lot of people are going to be spending healthfully knowing that the numbers are going to be going up," Goldstein said, adding that stores like Walmart ( (WMT) - Get Walmart Inc. Report) are working with this knowledge by offering longer-term sales until the end of December.

Gabriella Santaniello, who founded retail consultant firm A-Line Partners, said that the biggest challenge facing retailers is not inflation but supply-chain disruption and inventory shortages.

A recent estimate by the American Trucking Association found that the industry is short over 80,000 drivers at a time when demand for many goods is at an all-time high after the pandemic.

"Inventories were low to begin with but now you've got supply chain disruption and retailers scrambling to get products into stores and as a result not promoting," Santianello said. "There's an extreme lack of promotional activity out there."

Inventory shortages will, Santianello said, be made up for with perks like free shipping, curbside and other different types of pickup, along with discounts on what is available that will be marketed at the last minute. 

She brought up the example of makeup chain Ulta ( (ULTA) - Get Ulta Beauty Inc Report) partnering with DoorDash ( (DASH) - Get DoorDash Report) to offer same-day delivery in certain cities. 

On the other side, smaller stores may focus on making their locations extra-nice with various displays and activities to drawn in in-person shoppers after the pandemic.

"However this is going to wash out, we're still setting up for a holiday shopping season that seems pretty positive," Santianello said.

In-person shopping will have a much bigger effect on this year's Black Friday shopping trends than many realize, Michael Baker, a retail analyst for D.A. Davidson, told TheStreet. 

After last year's lockdowns forced everything to move online, there is now a customer desire to be inside a store.

"People will be out in stores and that's helpful for margins because you don't have to absorb the shipping cost," Baker said. "You also have more opportunity for add-on purchases that will help retailers at a time when the economy is [already] on more solid footing than a year ago."

But while inflation is predicted to worsen and eventually affect not just the consumer but the corporation, the consensus is that it will not happen soon enough to affect the upcoming shopping period.

"I think we're still going to see some very low prices but come early next year, it's definitely going to be affecting a lot of people," Goldstein said.