New York CNN Business —
Black Friday isn’t what it used to be. But many Americans are still expected to spend on the holiday.
Mastercard projects that sales will grow 15% on Black Friday compared with last year. Spending will be driven by shopping in stores, which was more muted last year due to a winter Covid-19 surge. In-store sales will grow 18% this year, Mastercard estimates.
“Expect Black Friday shopping to be in full force across channels this year,” Steve Sadove, senior advisor for Mastercard, said in a news release.
Adobe Analytics projects that online sales on Black Friday will increase just 1% from last year as shoppers head back to stores.
But Adobe said that shoppers spent a record $5.29 billion on Thanksgiving Day, up 2.9% from a year ago.
The holiday shopping season looks much different than it once did. Instead of doorbuster deals on Black Friday, retailers began their holiday sales in early fall. Amazon (AMZN)held a second Prime Day event in October this year, and Walmart (WMT), Target (TGT) and others held competing savings events.
By spreading out their holiday deals online, retailers have reduced the draw of Black Friday.
But shoppers are returning to many of their pre-pandemic routines and retailers expect a more typical holiday season than the last two years in the pandemic. Shoppers are once again expected to buy around key holidays like Black Friday and also buy later in the season, hoping to land deals.
“Shoppers purchasing behavior appears to be more closely timed to holiday dates,” Dollar Tree (DLTR) finance chief Jeffrey Davis said on a call with analysts this week.
This year, inflation has squeezed many shoppers’ budgets. Retailers say customers are pulling back on discretionary spending like furniture and electronics and are being more selective about what they buy.
Lower and middle-income families in particular have been strained by inflation and have shifted their spending to groceries and paying for other daily essentials.
“More and more of their household budget goes towards the needs of the family, which limits the amount available for discretionary purchases,” Christina Hennington, Target’s chief growth officer, said earlier this month.
Chains are also overstocked on many categories and are offering more discounts than they did last year to clear out merchandise and entice shoppers to spend.
Overall, holiday sales are expected to grow this year, but at a slower pace than last year. Many shoppers will lean on savings and credit to afford gifts.
Holiday sales will increase by up to 8% this year, the National Retail Federation projects.