How inflation will affect this year's Black Friday shopping
A MARTÍNEZ, HOST:
It is officially the holiday shopping season. It's Black Friday. And this year, it has a bit of a shadow hanging over it because inflation is near record highs. So how does this bode for holiday gifts? Well, we have NPR's Alina Selyukh here for an update. All right. Let's talk inflation. How is it changing up the way people shop?
ALINA SELYUKH, BYLINE: It is by far the No. 1 issue people bring up. Retailers themselves, actually, like Target and Kohl's, have said that they are seeing people pull back from discretionary shopping because they're spending so much on necessities like food and gas. And that means this year, people are hunting for discounts more than even before, intensely chasing sales and deals. I talked to Krish Thyagarajan at the analytics firm DataWeave. It tracks prices. And he says, basically, stores and shoppers are kind of in this standoff where stores are lowering prices, trying to keep people shopping, while many shoppers are kind of waiting for even bigger discounts.
KRISH THYAGARAJAN: Consumers want better price, so they are sitting on the side. So it's going to really boil down to, do consumers blink first, or do the retailers blink first?
SELYUKH: So if retailers blink first, the discounts in December might bring some inflation relief because this year, some people seem to only shop if they find something on sale.
MARTÍNEZ: So glad you mentioned that because I've had my eye on these sneakers, Alina, that I've held off...
MARTÍNEZ: I've held off on buying, but my resolve is weakening. So are these big sales happening any time soon?
SELYUKH: You know, it always depends on the store. But here's what I learned from Vivek Pandya, who tracks online shopping at Adobe.
VIVEK PANDYA: Computers and electronics - they're going to have some of the strongest discounts on record. We're expecting down to around 32%. Other categories, like toys, apparel, home furniture, are seeing very good discounts.
SELYUKH: Not sure on the footwear front. But I just want to explain that for some of these things, like clothes and home goods, for example, there's been a big story of inventory glut. We had shoppers buying like crazy last year. That meant stores ordered more and more and then shoppers decided they were over it just as many of these shipments were still arriving because of supply chain issues. So now if stores have too much of the wrong stuff, a lot of it is likely to be on sale. Pandya says the big question is whether people will actually decide to spend their money on all these extra things.
MARTÍNEZ: So do we have an answer to that question?
SELYUKH: Well, people are definitely still shopping. Holiday spending is expected to increase. The National Retail Federation predicts about 6 to 8%. That's actually more than your average year, although if you account for inflation, it does mean we are buying less stuff while spending more money. And it really depends on who we're talking about when we talk about shoppers because there's this growing divergence between shoppers who are wealthier and those who are less so. Many people are entering this holiday season with the lowest savings they've had in a while. They're shopping with credit cards. A government report this month found credit card balances have recently jumped the most in 20 years. Meanwhile, luxury goods, for example, have actually seen little change from inflation. Even Best Buy said that while shoppers with lower incomes are buying cheaper TVs, shoppers with higher incomes are upgrading electronics, getting fancier versions.
MARTÍNEZ: While you were talking, I was checking on the sneakers. They're still the same price. I'm not buying them.
SELYUKH: Still the same price.
MARTÍNEZ: NPR's Alina Selyukh. Thanks a lot.
SELYUKH: Thank you. Transcript provided by NPR, Copyright NPR.