Black Friday attracts U.S. buyers however many shun shops for on-line By Reuters

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© Reuters. FILE PHOTO: Vacation shoppers search for deals at the Pentagon City Mall in Arlington, Virginia, the United States, Nov. 29, 2019. REUTERS / Loren Elliott / File Photo

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By Richa Naidu and Arriana McLymore

CHICAGO (Reuters) – Bargain hunters ventured out to shop for Christmas gifts on Black Friday in cool weather, only to find that many U.S. retailers were offering smaller discounts this year amid shortages of supplies.

COVID fears and fewer “doorbuster” sales left the crowd thin on the day after the US Thanksgiving holiday, which ushers in the year-end Christmas shopping season.

On the same day, the World Health Organization described the newly identified Omicron variant of the coronavirus as a “worrying variant”, which triggered a worldwide alarm and a sell-off on the US stock market.

Black Friday stores had the lowest sales of clearance goods in five years or more, Cowen analysts said in a note. Many shoppers chose to pick up goods from the roadside rather than venturing into stores.

According to Mastercard (NYSE 🙂 SpendingPulse, retail sales on Black Friday were up 29.8% from 2020 to 3:00 p.m. ET.

Walmart (NYSE 🙂 and target (NYSE 🙂 was able to outperform other retailers in part because of their in-store online purchase-pickup, Cowen said. Target added more than 18,000 “drive-up” parking spaces, more than double the previous year. The company said its most popular Black Friday deals include $ 219.99 on a KitchenAid professional kitchen mixer, which regularly sells for $ 429.99, and savings of up to $ 60 on Apple (NASDAQ 🙂 Watches and AirPods.

Several retailers – including Walmart, Target, and Best Buy – are projected to see lower fourth-quarter profit margins due to reduced inventory levels and higher costs for raw materials, freight, and labor. “Even if the holiday season should be okay from a sales standpoint – because retailers are offering fewer discounts – margins are not necessarily going to be higher due to inflation,” said Forrester Research (NASDAQ 🙂 Analyst Sucharita Kodali.

U.S. consumers are heading into the Christmas season thanks to still substantial savings from multiple rounds of government pandemic aid and double-digit wage increases in the competition for workers with cash. Still, retailers had lured shoppers into Christmas shopping back in September of this year because the supply chain congestion prevented them from quickly replenishing their year-end merchandise.

A Deloitte survey found that people had already spent 80% to 85% of their Christmas gift budget before Black Friday. According to Adobe’s Digital Economy Index (NASDAQ :), online sales are estimated to have reached a record $ 207 billion in November and December, up 10% year over year. The National Retail Federation has forecast that combined in-store and online vacation sales will reach between $ 843.4 billion and $ 859 billion, up 8.5 to 10.5 percent from last year.

Elver Gomez, a 21-year-old student in Chicago, said he couldn’t find the Apple and Microsoft (NASDAQ 🙂 laptops he wanted while shopping at a Best Buy store on Friday morning. “It looks like it’s either sold out this year” or for sale at a “not-so-great price”. Best Buy has added a “limited quality” and “no rain controls” warning on its website.

According to Adobe, electronics, which are in short supply due to a global chip shortage, had the highest inventory, followed by personal care and home and garden. For most of November, out-of-stocks rose 261% from 2019.

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