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Black Friday OK, Still Not What It Once Was

No blockbuster but not a washout.

That was the early read on Black Friday traffic and sales from retail experts, giving some hope but no certainty that the holiday season will play out okay for the industry amid shopping slowdowns seen in October and early November, and inflationary pressures on consumers.

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“When we opened the doors at Herald Square at 6 a.m., there were bigger crowds than 2020 or 2021,” Macy’s Inc. chairman and chief executive officer Jeff Gennette told WWD on Black Friday. “There were lines at all of the entrances – Broadway, 34th Street and Seventh Avenue – but the biggest crowd was on Broadway.”

“We noticed encouraging traffic as shoppers return to stores and traffic appeared steady,” Oliver Chen, managing director and senior equity research analyst at Cowen financial services, wrote in a report issued Friday morning. Based on store checks, Cowen estimated Black Friday retail traffic could increase 7 to 9 percent, which would be “slightly above” the 3 percent month-to-date trends in November.

“Following Black Friday, we note retailers could likely benefit from the extra Saturday between Thanksgiving and Christmas,” Chen added.

“I’ve been doing my rounds around Atlanta. It seems the parking lots are full. It takes 20 or 30 minutes to find a spot, ” said Murali Gokki, managing director in the retail practice of Alix Partners consulting firm, who visited Phipps Plaza and Perimeter Mall shopping centers.

“The malls are lively, but there are very few people walking around with shopping bags despite sales of 30 to 60 percent,” observed Gokki. “The sales are much more broad in terms of offerings. There appears to be many storewide sales.”

He said that Sephora and Bath & Body Works were the busiest stores, while many others were not quite as busy.

“Many folks are together in family groups or together with friends and appear to be having a good time, but they also appear to be very targeted in terms of what they want to buy,” Gokki said. “One of our recent surveys points to many folks reporting they are browsing and searching online with intent to go to the store for a purchase. The crowds are hovering at certain stores, where they probably already knew what they were going to purchase.”

“Honestly, it looked like a normal shopping day to me. I had trouble discerning anything notable,” said Brian Ehrig, partner in the consumer practice at Kearney, the strategy and management consulting firm, who at 10 a.m. in Nashville, Tennessee, went shopping at the One Hundred Oaks mall housing offpricers including Ross, Burlington and TJMaxx, among other value-oriented stores. “To my surprise, the parking lot was half empty. Perhaps I got there after the real early crowd. But I also went to a Walmart in Nashville. It was the same story…Black Friday is not the traffic driver it once was,” said Ehrig, adding that the holiday season this year really began six weeks ago, with many retailers launching their holiday deals.

This fall there has been a chorus of retailers citing “normalized” shopping patterns, meaning Americans are increasingly returning in greater frequency to brick and mortar stores while spending less online than they did during the pandemic. Yet there’s also a sense that consumers are holding back on buying gifts, anticipating bigger markdowns closer to Christmas, and realizing they have an extra Saturday to shop this year, with Christmas Day falling on a Sunday.

“The holiday time frame is a long haul,” said Gennette. “It’s just too early to call which way the customer is shopping, but the team is ready,” having inventories under control and equipped with new pricing technology that can manage markdowns more effectively.

No one is expecting Black Friday or Cyber Week to be the blockbusters they were in past years, though Gennette did say he would expect some up tempo in purchasing for those periods, followed by a lull in shopping. “Then we come back stronger for the last ten days before the holiday.”

Gennette said that Black Friday promotions, which have been going on since last Sunday, continue through Saturday. On Sunday, Macy’s triggers Cyber Monday specials and then a friends and family event starts Tuesday.

The weather was conducive for shopping on Friday in most of the country, with a little rain on the East Coast in the morning, northern temperatures in the 50s, and heavier rain in Texas and other areas along the Gulf Coast. Weather conditions on Saturday are predicted as mostly clear, cooler, though rain Sunday could be heavy.

Macy’s best sellers for Black Friday included women’s cashmere sweaters reduced to $39.99; diamond studs at 60 percent off; Samsonite luggage at 60 to 65 percent off, and small kitchen appliances at 20 to 50 percent off. Popular toy and game brands were Pokemon, Barbie, Geoffrey the Giraffe and Lego as well as Sharper Image drones.

Other best sellers were cosmetics gift sets, fragrances; boots, and quilted outerwear.

According to the National Retail Federation, 166.3 million people in the U.S., almost eight million more than last year, are expected to shop from Thanksgiving Day through Cyber Monday. Holiday sales during November and December are forecast to grow between 6 and 8 percent over 2021, compared to the 13.5 percent last year, though some of the results may be skewed as deals and promotions continue to be pulled forward.

A survey by the ICSC found that shoppers expect to spend a total of $125 billion, a 10 percent increase over 2021, in the days between Thanksgiving Day and Cyber Monday. “Inflation and rising interest rates are still a concern, as 89 percent of consumers plan to shop for Thanksgiving Weekend’s deals and promotions. As consumers remain cognizant of economic factors affecting their wallets, 81 percent say that rising interest rates are likely to impact their shopping behaviors or payment methods throughout the holiday weekend.” The ICSC also found that 37 percent of U.S. consumers plan to cut back on their overall spending for holiday.

“Our top Black Friday holiday stocks are Macy’s Walmart and Ulta,” Cowen indicated. “Each will benefit from product diversification, trend right execution, gifting assortments at competitive prices, and value positioning. At Macy’s we like an expanding toy selection with the Toys R Us partnership and the selection of key gifting categories including outerwear, knits, and beauty. We expect Walmart to continue to benefit from the trade down at the high end, increasing penetration of Walmart+ members, competitive prices, and momentum in grocery and essentials. We believe Ulta will benefit from strong demand for beauty, and creative Black Friday deals should drive engagement with its (approximate) 38 million loyalty members…Bath & Body Works BBWI is another top pick given the company’s compelling value proposition and leadership in the self-care category.”