Saturday, December 7, 2024

US Black Friday spending at stores inches ahead as Americans spend more online

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By Ananya Mariam Rajesh and Bianca Flowers

(Reuters) -Black Friday spending in U.S. retail stores was muted this year in contrast to a more robust rise online, as bargain-hungry Americans skipped stores in favor of their phones and laptops, according to data from Mastercard and other data providers.

Sales at brick-and-mortar stores grew just 0.7% year-over-year, according to preliminary estimates by payments processor Mastercard, and were lower according to data firm Facteus.

Yet U.S. e-commerce sales increased by a hefty 14.6% online, according to Mastercard SpendingPulse, a metric measuring U.S. retail sales across the Mastercard payments network combined with estimates for cash and check payments.

The estimates aren’t adjusted for inflation. “If you layer in inflation, in-store (spending) is even lower,” said Jonathan Chin, co-founder and head of data at Facteus. The firm looked at spending patterns on debit and credit cards online and in stores on a seven-day rolling basis year-over-year.

Facteus said online sales grew 11.1% and in-store sales fell 5.4%. With inflation, those numbers drop to 8.5% online growth and an 8% in-store decline.

Michelle Meyer, chief economist at Mastercard Economics Institute, noted that while overall inflation is running at more than 2%, popular holiday-related purchases, such as appliances, clothing, sporting goods, personal care products and jewelry, have been either declining in price, or increasing only modestly, over the last year.

Black Friday, the day after U.S. Thanksgiving, kicked off the holiday shopping season for retailers. Competition has intensified to win shoppers seeking discounts, such as Corey Coscioni, age 58.

Coscioni looked for bargains both online and in Chicago-area stores on Friday, seeking “gifts for everyone: my wife, my daughter, and myself.” His stops included Bloomingdale’s, Macy’s and Anthropologie. “While we’re waiting in line, I’ll be shopping.”

MUTED SALES

Ahead of Black Friday, many shoppers visited stores to browse, taking in what merchandise and prices were available. “They were waiting,” said Meyer, the Mastercard economist. “But then when the Black Friday sales hit, we had this big concentration of spending, which was really done online given that’s where you have the greatest amount of power and choice as a consumer.”

Department store chains such as Macy’s and Kohl’s, as well as big-box retailer Target, could see muted sales this season, which is shorter with only 26 days between Thanksgiving and Christmas.

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