As retail stores and online retailers get ready for the holiday rush that begins in earnest on Black Friday, they are faced with a conundrum that few had anticipated. Instead of spending their money on gifts and goods this year, many American consumers are headed more toward travel and experiences. After the pandemic forced everyone into their homes for years, people are coming out of their cocoons with their sights set on travel and fun. But no matter what consumers are spending their money on this holiday season, there is a sense of unease for shoppers and businesses alike, with the looming elephant in the room on everyone’s mind: a possible recession.
Drop Before You Shop (With Budget Worries)
The holiday season feels different this year. With all that consumers have been through in the last several years, and a recession on the horizon, there is a sense of worry. Supply chains are still in shambles, and the perfect holiday gift may be elusive this year. People are tightening their budgets because of the skyrocketing price of groceries, gas, and other necessities, which does not leave as much discretionary spending for the holidays.
Because of this unrest with the economic stress and decimated supply chain, businesses like Target and Amazon are holding early-bird sales, in the hopes of getting people out in the stores to spend their money.
“People are planning to spend less during the actual Black Friday, Cyber Monday and holiday season because of inflation,” said Andrea Woroch, a budgeting expert. “Even though people don’t want to spend more, the more sales you have, the more you get people out to shop, the more they’re going to end up spending.”
Experts just might be onto something. With the wonky supply chain, getting the perfect gift is paramount for consumers, and the time is now. “What consumers right now fear more than anything is not getting their hands on that perfect gift, so they’re going to buy it right now whether it’s on sale or not. They are afraid if they wait it may not be available,” Howard Dvorkin said. “Because of their limited supply, retailers will probably maintain the same pricing without discounts to move the merchandise.”