UPDATED 11:44 A.M.
NEW YORK (Reuters) -The battleground for retailers this U.S. holiday season is over merchandise priced at $35 and less, setting the stage for the cheapest shopping period in years for TVs, toys, dresses, and sporting goods, according to retail executives, federal pricing data and exclusive analysis of early Black Friday discounts.
Toys, games and hobby gear are on track to be less expensive this holiday season for the first time since 2020, while sporting goods prices are down this holiday for the first time since 2018, data from the Bureau of Labor Statistics (BLS)showed.
The price of a TV is three-fourths of what it was in 2019, while men’s suits, outerwear, sports coats, women’s dresses and audio equipment are 8% to 14% cheaper compared with pre-pandemic levels, BLS data for October shows.
“The deals are really good on TVs,” said Theresa Forsberg, who picked up a 55-inch for $188 at Walmart in New Milford, Connecticut, on Black Friday. Jill Lizzo, in New York’s Harlem, found bargains on toothpaste and Christmas decorations at Target this year, a relief because her rent is more expensive.
To be sure, prices overall are higher in 2023 despite slowed price growth, with October’s consumer price index climbing to 3.2% year-over-year. The figure remained flat on a month-over-month basis, signaling some holiday item prices may be slow to come down.
Despite a dip in sporting goods prices, they continue to pace above 2019 levels. Girls’ apparel has also remained above pandemic-era levels, while the average price of furniture has steadily risen since September.
Certain prices are falling after pandemic-induced kinks in the supply chain and a huge shift in demand toward goods over services over the past two years pushed up prices for nearly every consumer good, from eggs and butter to Barbie dolls and tennis rackets.
Walmart said prices of general merchandise – clothing, electronics, furniture – had declined by low to mid-single-digit percentages versus last year, enabling the retailer to cut prices this holiday season.
Target executives said they have seen inflation moderate, but that it’s still a very “rational environment.”
“If there’s one thing that we’ve seen is in an environment where people are making choices and they might have some constraints with their budget, the motivation to buy is, really, is this going to add value to my life?” Target chief growth officer Christina Hennington said on a call last week.
Black Friday discounts are 30% to 50% at major retailers and could go deeper later in the season. Many shoppers may wait until the weekend before Christmas Monday to buy their gifts. Retailers could deepen discounts by 10%, analyst Jessica Ramirez at Jane Hali & Associates said in an interview.
“We are definitely seeing signs that the consumer is starting to pull back … and businesses know that,” Jeffrey Roach, chief economist at LPL Financial, said in an interview. “So they’re putting their best foot forward by trying to put fairly aggressive discounts.”
In the weeks leading up to Black Friday, retailers, including Macy’s, Dick’s Sporting Goods and Lowe’s, have extended price promotions to a broader range of categories than last year, according to Jane Hali & Associates.
Macy’s advertised half off on coats and dinnerware and up to 50% off on handbags, small appliances and men’s shoes.
An analysis of inventory data by Reuters found that Macy’s and many other major chains, including dollar stores, are struggling with slower inventory drawdowns.
Major e-commerce platforms Temu and Shein have also jumped on the deals bandwagon, engaging in a “value for money” frenzy, triggering a race to the bottom.
Kevin Simpson, chief investment officer at Capital Wealth Planning, said Walmart, Target and Home Depot are showing signs of caution when it comes to consumer health and may see weaker margins once the season ends.
For two years, “retailers have been in a Goldilocks world” of increasing sales despite price hikes, he said. “But you can only do that for so long.”
He expects retailers to dangle bigger discounts this year. “You’re going to see margin compression and potentially lower sales,” said Simpson, whose firm holds shares in Walmart and Home Depot.
Toys, including Barbie dolls, were below where they sold in 2019.
A Barbie doll Clinic Play Set was $32.49 on Target’s website on Wednesday. It sold for $45 on Dec. 3, 2019, and Nov. 18, 2021, according to a Reuters analysis of the Wayback Machine internet archive.
At Walmart, a Lego classic box was $22.49. It sold for $27.99 the day before Thanksgiving in 2019.
(Reporting by Siddharth Cavale and Amina Niasse in New York; editing by Jonathan Oatis)
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WASHINGTON, D.C. – The holiday season is now upon us, which means that it’s time to start checking things off your gift and shopping lists.
Holiday shopping deals have arrived earlier this year, with Amazon, Walmart and Best Buy all getting in on the action with shopping deals, while Target wraps up its weeklong event.
Experts tell Fox News, it’s easy to get drawn into a particularly good Black Friday deal on something you don’t need or plan on gifting, but you’ll save more money by not buying that item than you would by getting a discount.
Just because something is listed as a sale doesn’t mean the price is actually that good. Retailers will sometimes mark up a product before a sales event, only to return it to its normal price as a “discount.”
Most retailers will have extended return periods during the holiday season, so if you bought something and a better deal pops up, you’ll be able to send it back and buy it again at the lower price.
