It’s a rare thing these days: price cuts.
While the pace of price increases in the economy is beginning to slow, inflation was still at 7.7% last month, a level not seen in about four decades. So this holiday season, retailers are using deep discounts to entice Americans to shop in stores and online. Clothing, shoes, toys and electronics are among the items already hitting sales shelves ahead of Black Friday.
On early sales this season, J. Crew is 50% off and Levi’s is 40% off. Target advertises 50% discounts on toys and games, and some TVs at Best Buy are 60% off.
Shopping expert Trae Bodge, who tracks deals on her TrueTrae.com site, said discounts of 20% to 25% seem to be standard for Black Friday weekend, but the sales are even steeper. They are very widespread this year.
“I’m seeing so much activity right now that I think it’s a really exciting time for shoppers to get out there and shop and even stock up as well,” said Bodge, who earns commission on some of the sales marked on his site.
Retailers are getting more aggressive not only in deep discounts, but also in launching sales earlier than usual, hoping to attract consumers who want to space out their holiday shopping.
Footwear, men’s suits, women’s outerwear and children’s clothing experienced price declines ranging from 1% to 4% between September and October. according to government dataas retailers slashed prices ahead of the peak holiday shopping season.
During the same period, toy prices fell more than 1% and jewelry prices more than 3%. TV and smartphone prices may also be attractive this season, as both categories largely avoided the price increases seen in other areas over the past year.
And while consumers are facing higher prices across the board compared to 2021, some retailers say they are rolling out their steepest sales since the pandemic began.
“The promotional calendar looks as sharp as 2019, as deep as 2019,” Ross Stores chief executive Barbara Rentler said on an earnings call last week. “A couple of deals, you tell yourself: It’s a little deeper than 2019.”
One reason for early and aggressive discounting: supply chain trends.
Shipping delays and port delays from last year have eased significantly, but some big retailers including Gap, Target and Best Buy have said they still have excess inventory that is pushing them to discount deeper. As COVID-19-related overseas lockdowns and labor shortages disrupted supply chains in late 2021 and early 2022, many companies were saddled with delayed shipments that they are now desperate to move.
Shoe brand Toms, for example, had planned to receive shoes for the spring season in January, but ended up receiving shipments until May.
“The discount strategy we have now is to remove a lot of the late-arriving spring products, so you’ll see a lot of those products on sale,” Toms chief executive Magnus Wedhammar said. The company advertises a 30% discount on its website.
As is always the case during the holiday season, some products will continue to be in high demand and high prices. Bodge expects winter gear, latest smartphone models and the best toys to keep quite expensive this year.
Those hoping to get plane tickets may also have a hard time getting a deal. Airfares were 43% higher in October compared to last year, as consumers continue to eagerly book travel with airlines still short on pilots and under pressure from high fuel costs.
As shoppers plan their holiday budgets, Bodge suggests setting a spending limit to avoid splurging too much, focusing on gifts that get the biggest discounts and using deal sites to search for cash back and coupons. Americans are already racking up credit card debt as the season heats up, risking hurting their credit scores and bank balances as card interest rates top 30-year highs.
“It’s okay to be more conservative with your spending,” Bodge said. “Because you want to go into the New Year feeling really healthy and not dragging a bag of coal behind all your Christmas shopping.”