Retailers across the US are seeing significant drops in holiday sales as shoppers who spent early tighten their wallets in fear of a deepening recession despite a recent cooling.
Data from the Commerce Department (opens in new tab) [pdf] seems to confirm our forecast – that too much inventory would lead to “overstock shedding” and smaller profits for retailers – and the gloomy retailer outlooks, including that of online giant Amazon.
The Commerce Department reported that November’s monthly retail sales fell by 0.2%, the largest monthly decline in all of 2022. And factoring in auto sales, the drop was 0.6% in November, even with an earlier-than-usual launch to the holiday shopping season fueled by year Amazon Prime Day/“Black Friday” sale in October and other retailers – Walmart, Best Buy and Home Depot among them – launching their Black Friday deals in early November.
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There’s every chance that, as a result, retailers could be forced to drastically reduce prices in some categories to strengthen sales in the days leading up to Christmas. Matt Kramer of KPMG told CNN (opens in new tab) “it’s going to be very interesting because that inventory overhang is almost a bigger overarching risk. And they do want to keep their loyal customers, they want to excite them and keep them coming back.”
This will be a boon to all those last-minute shoppers scrambling to find gifts during Hanukkah and as Christmas Day approaches.
If you’re among those scramblers, we’ve dusted off some of our tips to save money and get the best deals during the sales, including using cash back cards and deals-searching browser extensions. You can also take advantage of some of Google’s new features that help you to shop smart and find the best deals.
You also may want to take yourself offline and out of the house. There are often last-minute in-store deals that won’t make it online before Christmas, so there could be an advantage in shopping the old-fashioned way. But, don’t forget the first rule of sales shopping – however good a deal is, if you don’t need it, don’t buy it.