U.S. consumers have reason to be hopeful now that the holiday season has arrived because of the abundance of bargains available. Products priced at $35 or less are expected to be the focal point of retailers’ competition this year, according to retail executives, federal pricing data, and exclusive research on early Black Friday sales. Get ready for the most affordable shopping season in years, with deep discounts on everything from televisions and toys to dresses and sports equipment.
Reduction in the Cost of Recreational and Toy Items
For the first time since 2020, holiday prices are predicted to be lower for games, toys, and hobby gear. Sports goods prices have been falling for the first time since 2018, according to data from the Bureau of Labor Statistics (BLS). Several products, including men’s suits, outerwear, sports coats, women’s dresses, and audio equipment, are 8–14% less expensive than they were before the pandemic. The price of a television is also currently 3/4 of what it was in 2019.
Considering her increasing rent costs, Harlem resident Jill Lizzo was relieved to find bargains on toothpaste and Christmas decorations at Target.
Price-Relating Elements
Overall, prices are higher in 2023 as a result of slower price growth, but some categories do show signs of relief for shoppers. There was a 3.2% year-over-year increase in the consumer price index for October. The fact that the number didn’t change from one month to the next suggests that prices for certain holiday items might be sluggish to drop.
Some products’ price drops are due to supply chain interruptions caused by the pandemic and a marked change in consumer demand from services to goods in the previous two years. Many consumer goods, including eggs, butter, Barbie dolls, and tennis rackets, saw price increases due to this surge in demand.
Shops Adapting to Customer Wants
In response to customer demand, big-box stores like Target and Walmart are slashing prices on apparel, electronics, and furniture. Price drops in the low to mid-single digits compared to last year were reported by Walmart for general merchandise. Even though inflation has slowed, executives at Target have pointed out that they are still in a rational market where customers are seeking value.
Sales Event: Black Friday and Beyond
Major retailers typically offer Black Friday discounts ranging from 30% to 50%, with the possibility of even deeper sales occurring later in the season. Stores might respond to customers who put off buying Christmas presents until the weekend before the holiday by slashing prices by an additional 10%.
Jane Hali & Associates analyst Jessica Ramirez claims that companies are offering more aggressive discounts because customers are beginning to pull back. Many more product categories are now included in price promotions at stores like Macy’s, Dick’s Sporting Goods, and Lowe’s when compared to last year.
Difficulties Retailers Experience
Stores are having trouble keeping track of their inventory even as they cut prices to entice shoppers. Reuters found that after looking at inventory data, many big chains, like Macy’s and dollar stores, are seeing slower drawdowns of inventory. Their capacity to satisfy demand and keep the right amount of inventory on hand could be affected by this.
Online marketplaces like Temu and Shein have also jumped on the bandwagon, flooding the market with “value for money” sales and setting in motion a downward spiral of prices. But Capital Wealth Planning’s chief investment officer Kevin Simpson warns that stores should be careful to safeguard customer health and profit margins.
A Look at Past and Present Prices
When looking at prices from different years, you can see that there has been a decrease in many of them. Take the Barbie doll Clinic Play Set as an example; in December 2019, its selling price was $45 but it was $32.49 on Target’s website. On a similar note, the price of a Lego classic box at Walmart was $22.49, down from $27.99 the day before Thanksgiving in 2019.
See first source: Reuters
FAQ
What products are expected to have deep discounts during the holiday season?
Retail executives and federal pricing data suggest that products priced at $35 or less will be the focal point of retailers’ competition during the holiday season. This includes a wide range of items, from televisions and toys to dresses and sports equipment.
Are there specific categories where prices are predicted to be lower this holiday season?
Yes, several categories are expected to have lower prices compared to previous years. These include games, toys, and hobby gear, which are predicted to have lower holiday prices for the first time since 2020. Sports goods prices are also falling for the first time since 2018. Additionally, products like men’s suits, outerwear, sports coats, women’s dresses, audio equipment, and televisions are expected to be 8–14% less expensive than they were before the pandemic.
Why are some prices lower this year?
The price drops in some product categories can be attributed to supply chain interruptions caused by the pandemic and shifts in consumer demand from services to goods in the previous two years. Increased demand for certain consumer goods, such as eggs, butter, Barbie dolls, and tennis rackets, led to price increases. However, other factors like slower price growth have contributed to lower prices in some categories.
How much are major retailers discounting their products during Black Friday and beyond?
Major retailers typically offer Black Friday discounts ranging from 30% to 50%, with the possibility of even deeper sales occurring later in the season. Some stores may also slash prices by an additional 10% for customers who delay their Christmas present purchases until the weekend before the holiday.
Are online marketplaces also offering discounts during the holiday season?
Yes, online marketplaces like Temu and Shein have joined the trend by offering “value for money” sales, contributing to the downward pressure on prices. However, experts caution that stores should be careful to balance customer health and profit margins while offering aggressive discounts.
What challenges are retailers facing despite cutting prices?
Retailers are experiencing difficulties in managing their inventory, even as they reduce prices to attract shoppers. Some big chains, such as Macy’s and dollar stores, are seeing slower drawdowns of inventory, which could affect their ability to meet demand and maintain the right amount of inventory on hand.
Can you provide examples of price decreases in specific products?
Certainly, when comparing prices from different years, there has been a decrease in many products. For example, the Barbie doll Clinic Play Set was $45 in December 2019, but it is now available for $32.49 on Target’s website. Similarly, the price of a Lego classic box at Walmart was $22.49, down from $27.99 on Thanksgiving Day in 2019.
Featured Image Credit: Photo by Heidi Fin; Unsplash – Thank you!
