Farkhund Yousafzai
NEW YORK: US retailers braced for their biggest business test of the year at whether consumers would widely spend their money in the Black Friday sales that started the holiday shopping season.
The consumers’ confidence has been rattled by increasing inflation in the United States, the world’s largest economy, casting doubts over the festivity season that starts after Thursday’s Thanksgiving holiday.
Last year, retailers faced products shortfalls after shipping backlogs and Covid-19 pandemic-related factory shutdowns. The industry front-loaded its holiday imports this year, in a bid to avert a repeat. But, now the concerns of oversupply have disturbed them as consumers are cutting back due to soaring inflation.
Today’s problem is over-supply
The Managing Director of the GlobalData Retail consultancy Neil Saunders said that Supply’s shortages was an old problem. What the industry is facing today is oversupply.
Juameelah Henderson, a buyer in Old Navy store in New York told AFP that she always checked for sales but “more so now”. She said that the clothing chain’s prices were very high. She would prefer to avoid shopping if it was not on sale.
Higher prices of household staples like cereal and meat and gasoline are an economy-wide issue, but do not disturb everyone “by the same token”.
As a senior analyst at Moody’s, Claire Li said that the lower income classes are definitely worst by the soaring inflation and they are forced to spend only on the essential items. –APP/AFP
