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Black Friday faces off with inflation

Illustration of a retail shopping bag full of market trend arrows.

Illustration: Aïda Amer/Axios

While Adobe says online retail sales on Black Friday hit a record $9.12 billion, the figure was up only 2.3% versus last year.

Why it matters: That's well below inflation this year, with the Consumer Price Index up 7.7% in October alone.

What's next: Adobe, however, expects today's Cyber Monday online sales to increase to between $11.2 billion and $11.7 billion versus $10.7 billion last year.

  • That would also be a record for the history books and track closer to inflation.

Details: Top-selling items included Fortnite, Roblox, Bluey, Funko, Disney Encanto and Funko Pop.

  • Gaming was also at the top of wish lists, with Xbox Series X and PlayStation 5 devices selling well, as well as games such as FIFA 23, NBA 2k23, and Pokémon Scarlet and Pokémon Violet.
  • Apple MacBooks and Dyson products also sold well.

What they're saying: Holiday sales so far are in line with what analysts such as David Bassuk, a managing director at AlixPartners, and Nikki Baird, VP of Strategy at Aptos, expected.

  • Bassuk points out that consumers are cash-strapped, cautious and looking for deals, and Black Friday's results underscore that.
  • Consumers are eager to shop, however, with foot traffic returning to stores, he says.
  • Baird adds that on Black Friday traffic didn't really peak until the afternoon, which demonstrates that people wanted to shop as an experience, rather than getting in on can't-miss deals.

Yes, and: A more muted Black Friday is also in line with emerging shopping patterns as retailers encourage consumers to spread out their spending rather than concentrate it on one say, Baird says.

  • She notes, for example, that merchants made more of an effort to pull spending forward into the days leading up to Black Friday with early discounts.
  • And while Black Friday will always be a big event, consumers also know the more they wait, the better the discounts will be, Bassuk says.
  • He points out that this year there is an extra weekend between Thanksgiving and Christmas, which is unusual and is also having an impact.

Reality check: Holiday sales this season will still be somewhere between 20% and 30% above pre-pandemic 2019 levels, Baird emphasizes, indicating the consumer is still strong.

What we're watching: "We're kicking off the game of holiday chicken beginning today," Baird says.

  • Will it be consumers in need of presents who blink first and grab what deals are left or will it be the merchants that offer even deeper discounts to move inventory?
  • The bargains we've seen to date have already been baked into retailers' forecasts, with some marking up to then mark down and loss leaders to drive traffic.

The bottom line: "It’s not a one-day event anymore," Bassuk says of Black Friday.

Editor's note: This story has been corrected to reflect Nikki Baird's title is VP of Strategy, not VP of retail innovation.

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