US Consumers Spent Record Highs on Black Friday, But Are They Really Thriving?
Despite record-breaking spending figures for Thanksgiving weekend, many economists are sounding the alarm that the economic picture may not be as rosy as it seems. According to Adobe Analytics, US consumers shelled out $6.4 billion on Thanksgiving Day and a whopping $11.8 billion online on Black Friday, marking new highs. But Salesforce data paints a different picture: order volumes actually fell by 1 percent year-over-year while average selling prices skyrocketed 7 percent – suggesting that much of the growth was fueled by inflation rather than an increase in shopping enthusiasm.
For consumer spending to be considered a barometer of how financially stressed shoppers are navigating the current economic climate, it's essential that spending is driven by genuine appetite for goods and services, not just a desire to keep up with prices. Unfortunately, this weekend's Black Friday sales figures may suggest otherwise. Experts point out that much of the growth was due to higher prices, which have become increasingly burdensome for consumers, rather than an uptick in shopping enthusiasm.
Consumer confidence remains weak, according to pre-Black Friday forecasts, and retailers had anticipated a decline in spending as "cost pressures and financial constraints" weighed on shopper behavior. Deloitte predicted record-high spending would be overshadowed by the impact of inflation and tighter budgets. However, despite this, many consumers did manage to spend big – but not necessarily because they're feeling flush with cash.
In fact, some analysts argue that much of the increase in spending was driven by higher-priced products, while actual volumes remained relatively flat. This phenomenon has been dubbed "higher prices, lower volume" and highlights a worrying trend: consumers are digging deep into their pockets to keep up with prices rather than enjoying a genuine shopping spree.
Buy now, pay later (BNPL) options have undoubtedly played a significant role in driving spending this year, particularly among high-income earners who use these services for discretionary purchases. However, lower-income groups are also relying on BNPL for essential items – creating an uneven playing field that threatens to polarize the retail economy between winners and losers.
As Neil Saunders, managing director of GlobalData Retail, noted: "The increased level of spending tells us that the consumer is not hibernating and that the retail economy is not in recession... However, it does reveal some underlying cracks. Growth is mostly being driven by middle- and higher-income households and is not a broad brush." In short, while consumers may be continuing to spend on Black Friday, they're doing so with caution, deliberation, and – crucially – a growing sense of financial restraint.
The implications for retailers and the broader economy are still unclear. As Caila Schwartz, director of consumer insights at Salesforce, pointed out: "Black Friday delivered an important signal for the U.S. economy... but with the average selling price for goods climbing 7 percent, U.S. shoppers continued to feel the bite of inflation." The jury is still out on how this trend will play out over the holiday season – but one thing's for sure: consumers are becoming increasingly savvy about their spending habits and retailers need to be ready to adapt.
As we head into the holiday season, it remains to be seen whether consumer spending will continue to defy expectations or if the underlying economic trends will begin to show. One thing is certain, however: the picture is far from rosy for consumers navigating the current economic climate.
Despite record-breaking spending figures for Thanksgiving weekend, many economists are sounding the alarm that the economic picture may not be as rosy as it seems. According to Adobe Analytics, US consumers shelled out $6.4 billion on Thanksgiving Day and a whopping $11.8 billion online on Black Friday, marking new highs. But Salesforce data paints a different picture: order volumes actually fell by 1 percent year-over-year while average selling prices skyrocketed 7 percent – suggesting that much of the growth was fueled by inflation rather than an increase in shopping enthusiasm.
For consumer spending to be considered a barometer of how financially stressed shoppers are navigating the current economic climate, it's essential that spending is driven by genuine appetite for goods and services, not just a desire to keep up with prices. Unfortunately, this weekend's Black Friday sales figures may suggest otherwise. Experts point out that much of the growth was due to higher prices, which have become increasingly burdensome for consumers, rather than an uptick in shopping enthusiasm.
Consumer confidence remains weak, according to pre-Black Friday forecasts, and retailers had anticipated a decline in spending as "cost pressures and financial constraints" weighed on shopper behavior. Deloitte predicted record-high spending would be overshadowed by the impact of inflation and tighter budgets. However, despite this, many consumers did manage to spend big – but not necessarily because they're feeling flush with cash.
In fact, some analysts argue that much of the increase in spending was driven by higher-priced products, while actual volumes remained relatively flat. This phenomenon has been dubbed "higher prices, lower volume" and highlights a worrying trend: consumers are digging deep into their pockets to keep up with prices rather than enjoying a genuine shopping spree.
Buy now, pay later (BNPL) options have undoubtedly played a significant role in driving spending this year, particularly among high-income earners who use these services for discretionary purchases. However, lower-income groups are also relying on BNPL for essential items – creating an uneven playing field that threatens to polarize the retail economy between winners and losers.
As Neil Saunders, managing director of GlobalData Retail, noted: "The increased level of spending tells us that the consumer is not hibernating and that the retail economy is not in recession... However, it does reveal some underlying cracks. Growth is mostly being driven by middle- and higher-income households and is not a broad brush." In short, while consumers may be continuing to spend on Black Friday, they're doing so with caution, deliberation, and – crucially – a growing sense of financial restraint.
The implications for retailers and the broader economy are still unclear. As Caila Schwartz, director of consumer insights at Salesforce, pointed out: "Black Friday delivered an important signal for the U.S. economy... but with the average selling price for goods climbing 7 percent, U.S. shoppers continued to feel the bite of inflation." The jury is still out on how this trend will play out over the holiday season – but one thing's for sure: consumers are becoming increasingly savvy about their spending habits and retailers need to be ready to adapt.
As we head into the holiday season, it remains to be seen whether consumer spending will continue to defy expectations or if the underlying economic trends will begin to show. One thing is certain, however: the picture is far from rosy for consumers navigating the current economic climate.
seems like people are just trying to keep up with prices rather than actually wanting what they're buying 
. Inflation's definitely a thing, but it feels like we're seeing more of a 'buy now or go hungry' situation rather than actual spending enthusiasm 
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. It sounds like people are just trying to keep up with prices and not actually enjoying themselves when they shop. Its like they're playing catch-up, you know? 
The data says that average prices have actually increased by 7% this year, so thats a big deal. I think its time for retailers to rethink their strategies and make sure theyre not just making money off of people who can afford it 
But seriously, it's concerning that most of the growth is due to inflation rather than actual enthusiasm for shopping. It just goes to show that people are barely scraping by and are feeling forced into spending more because they can't afford not to 
. And don't even get me started on buy now, pay later - it's like a never-ending cycle of debt 
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at the same time, experts are warning that consumer spending isn't a reliable indicator of how financially stressed people really are 
anyway, retailers need to be prepared for some tough times ahead 
. retailers need to be aware that this isn't necessarily a sign of economic growth, its more like consumers are being super cautious with their money 