Retailers hoping shoppers relax spending this Black Friday

US retailers are facing picky buyers who are focusing on essentials like food and child care and cutting down on discretionary items like clothing and gifts. They are hoping Black Friday sales could reignite spending.

Retailers like Walmart, Gap, and T.J. Maxx have posted strong quarterly results, highlighting the importance of value-driven offerings. However, Target struggled, reporting a 21% stock drop after missing sales targets.

Amid cooling inflation, prices remain higher than pre-pandemic levels. Spending on clothing, accessories, and footwear declined by 4% in the first 10 months of 2024 compared to 2023, according to Consumer Edge. Fast fashion was an exception, showing a slight gain.

That said, Black Friday is still expected to be the busiest shopping day of the year, according to retail foot traffic tracking firm Sensormatic Solutions.

The National Retail Federation forecasts holiday sales growth of 2.5%-3.5%, the slowest pace since 2018. Warm weather and hurricanes have also slowed sales in some regions.

Overall, cautious shoppers are demanding good value and retailers face a challenging holiday season with modest growth expected. However, looming tariffs under the incoming Trump administration could drive consumers to buy big-ticket items like TVs and other electronics, before potential price increases in 2025.