New data from Sensormatic Solutions shows that compared with the same period in 2019, the passenger traffic of retail stores on Black Friday this year has dropped by 28.3%. But the traffic of physical stores has increased by 47.5% over last year, when many shoppers were staying at home due to the epidemic.
However, consumers have not replaced nearby stores such as Best Buy or Target with online shopping.
According to Adobe Analytics’ holiday shopping report, online sales on Black Friday fell 1.1% for the first time to $8.9 billion.
Do shoppers wait until Cyber Monday to buy the latest gadgets and clothing? not completely.
The level of shopping on Cyber Monday has also fallen from last year. Adobe reported that Internet revenue fell 1.4% year-on-year to $10.7 billion. This is also the first time that sales have fallen on one of the biggest shopping days of the year.
Industry observers believe these figures are disappointing. But they pointed out that consumers did not concentrate their shopping around Thanksgiving this year. Many people put gifts under the Christmas tree as early as October.
“Due to the early transactions in October, consumers will not wait for discounts on major shopping days such as Cyber Monday and Black Friday,” said Taylor Schreiner, director of Adobe Digital Insights.
Other market analysts pointed out that the reduction of deep discounts and supply shortages may prevent customers from spending on gifts.
Is it the only reason? Do consumers feel inflation and the deterioration of their financial situation?
Inflation in the United States is no secret. Many working-class people feel this in their wallets.
Average hourly wages rose 0.4% in October, but the Consumer Price Index (CPI) rose 0.9% over the same period. As a result, inflation offsets the increase in wages.
More importantly, consumer spending exceeds their income. Personal income rose by 0.5% in October, while personal spending rose by 1.3%. In addition, since the implementation of large-scale stimulus measures in March, the U.S. household savings rate has been declining.
Obviously, Americans’ debt has increased, and total consumer debt has increased by US$800 billion, or 6%, starting in 2019.
These trends may benefit the retail industry and the wider economy in the short term. But trillions of dollars in private debt is unsustainable, especially when the Fed inevitably raises interest rates to combat inflation.
This is very similar to the economic situation of the entire country: the government borrows to support a weak economy.
Consumer spending, especially spending by clicking, inserting and swiping cards, cannot provide long-term economic value. Unfortunately, Keynesianism believes that consumption-not saving-is the driving force of the economy, a view that has been de facto policy for decades. They say that saving is not conducive to economic growth.
In fact, there is no problem with the demand itself, no matter how big or what the demand is. But demand is limited by supply. If supply decreases, consumption will decrease, and people will convert money originally used for consumption into savings for later use.
The government uses artificial measures to boost consumption, such as deficit financing stimulus and cheap credit driven by historically low interest rates, which distort the economy and provide shocks with only temporary positive effects.
It can be said that consumers are out of money. They rely on credit cards such as Visa or MasterCard for spending, and this will have a long-term impact on the health of the retail industry and the US economy. When borrowing is no longer affordable and the money printing machine can no longer run around the clock, how can the public consume?
A recent Deloitte survey found that due to rampant price inflation, many high- and low-income people spend more this Christmas. The current situation has caused 11.5% of people to become Dickens’s Scrooge (Scrooge) in their hearts, giving up their Christmas gifts.
54% of Americans live on salaries when the cost of living continues to rise. In addition, roughly the same number of people cannot pay $1,000 to deal with emergencies, so millions of Americans have reason to shout “Bah, liar this holiday.” Men!” (bah humbug, note: this is the mantra of the miser in Dickens’ novels).
Andrew Moran is responsible for reporting in the business, economic and financial sectors. He has been a writer and journalist in Toronto for more than ten years. He has published articles in Liberty Nation, Digital Journal and Career Addict. He is the author of “The War on Cash” (The War on Cash).
The original “Abysmal Black Friday Numbers a Sign of Things to Come?” was published in the English “Epoch Times“
This article only represents the author’s own views, and does not necessarily reflect the position of The Epoch Times.
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