COVID anxiety set to shake up how Americans shop on Black Friday

From the fear of infection to financial insecurity, the COVID-19 pandemic is changing how Americans shop on Black Friday.

Worried about catching COVID-19, more Americans will shop online than in stores for the first time this Thanksgiving Day weekend, according to Deloitte [File: Eduardo Munoz/Reuters]
Worried about catching COVID-19, more Americans will shop online than in stores for the first time this Thanksgiving Day weekend, according to Deloitte [File: Eduardo Munoz/Reuters]

Black Friday is the day after the Thanksgiving holiday and the traditional start of the holiday shopping blitz in the United States.

In past years it was something of a national sport, characterised by “doorbuster deals” that saw consumers fresh from turkey feasts line up for hours to get a head start on grabbing the best deals of the year.

Shoppers were even known to come to blows.

This year, shoppers face a new kind of danger.

Black Friday is happening during a pandemic and right now, COVID-19 is breaking records for new infections and hospitalisations in the US.

Perhaps it is not too big of a surprise then that anxiety surrounding COVID-19 is changing the way Americans plan to shop this Thanksgiving Day weekend.

More consumers are tightening their belts and – for the first time ever – more people are planning to shop online than in person on Black Friday, a survey by consultancy Deloitte finds.

Deloitte’s pre-Thanksgiving pulse survey offers an immediate snapshot of what retailers can expect during the crucial holiday shopping season.

And what it is finding is a lot of anxiety over the virus.

Some 57 percent of consumers questioned by Deloitte between October 29 and November 2 said they feel anxious about shopping in-store during the holiday season – a full 6 percentage points higher than in September.

That means the number of people who plan to shop online on Black Friday – 58 percent, according to Deloitte – has overtaken the number of people who plan to do their shopping inside a real bricks-and-mortar shop by some 20 percentage points.

“More people will be shopping online on Black Friday than in stores, which is the first time that has ever happened,” Stephen Rogers, executive director at Deloitte Insights Consumer Industry Center, told Al Jazeera.

A jump in holiday sales during a troubled year

The economic fallout of the pandemic has fallen hardest on customer-facing service industries – like retail stores – disrupting millions of livelihoods as a result.

Consumer confidence has also taken a dive. The latest reading from the Conference Board released on Tuesday showed consumer confidence fell in November after staying relatively flat in October.

“The resurgence of COVID-19 is further increasing uncertainty and exacerbating concerns about the outlook,” said the Conference Board’s senior director of economic indicators Lynn Franco.

That is a troubling sign for the US economy because two-thirds of growth is driven by consumer spending.

Anticipating a tough climate, retailers were early out of the gate this year, launching promotions in late October to jump-start holiday sales.

The degree to which shoppers are responding to elongated promotional periods is unclear.

But spending over Thanksgiving Day weekend – the Thursday-to-Monday period – is projected to decline by more than 3 percent compared with last year with the average American slated to dole out $401 on average, Deloitte found.

Across the entire holiday season, the average consumer is slated to spend $1,387 – a 7 percent drop from last year.

Angst about finances is running rampant through millions of American households this holiday season.

More than one in four, or 28 percent, of Thanksgiving shoppers are anxious about making rent, mortgage and car payments, and paying off their credit card debt, Deloitte found.  And some 44 percent of Thanksgiving shoppers are delaying large purchases that they would have otherwise already made.

Gifts and gift card sales are projected to tumble 5 percent, while sales of home decor and non-gift clothing is expected to spike 12 percent during the entire shopping season.

“People are trying to deck the halls and make things festive at home because they know they’re not going to travel,” said Rogers.

Local and state governments continue to impose lockdowns, curfews and business-sapping restrictions as COVID-19 infections surge throughout the US.

And it shows in the data: retail sales in the US rose a measly 0.3 percent last month, according to the Commerce Department.

Some 15.1 million people said they did not work last month because their employer had closed up shop or lost business to the pandemic.

And there is more pain looming on the horizon with key pandemic emergency aid programmes such as the moratorium on evictions and freeze on student loan debt repayments set to expire at the end of next month.

A Citadel Outlet shopping mall reopens amid the outbreak of coronavirus in Commerce, California, US [File: Mike Blake/Reuters]
With Washington still gridlocked over a new round of federal virus relief aid, American families are unlikely to see another government check in their mailboxes this year.

“Congress has recessed for Thanksgiving without progress on fiscal relief measures, further reducing the odds that Congress will pass a major fiscal package before year end,” Goldman Sachs analysts wrote in a note. “As a result of these delays, we expect Congress to approve $700bn in additional fiscal support versus the $1 trillion previously.”

Anxiety and avoiding crowds: How and where we spend

Fear of COVID-19 infections has driven more consumers to buy groceries and basic essentials online.

Mega online retailers such as Amazon, home improvement store Home Depot and other mass merchants have done well because they were able to make early investments to adapt to the new retail reality, Rogers said.

“Big box stores have embraced curbside pick-up which has increased two and half times since the pandemic hit,” he added.

Despite all the challenges the pandemic is serving up, the National Retail Federation said on Monday it expects holiday sales in November and December to increase between 3.6 percent and 5.2 percent over last year.

It did warn, however, that more shutdowns could derail that cheerful forecast.

Source: Al Jazeera

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