Consumers aren’t spending at the same pace they did during the past couple of years, when the holidays were marked by post-pandemic splurges. While estimates on brick-and-mortar Black Friday sales won’t be available for some time, Salesforce Inc. expects online US sales to grow 1% in November and December versus a year earlier, which would be the slowest growth in at least five years. Sales were in line with that figure on Thanksgiving Day and appeared to pick up speed on Black Friday, the software company said.

Some shoppers said they were unimpressed by the discounts on Friday — and are likely to hold out for retailers to offer better sales. At the Willowbrook Mall in Wayne, New Jersey, Alyssa Fanelli said she came up empty-handed while shopping at Macy’s for wedding shoes. The brand she likes was offering 25% off. “That’s not a Black Friday deal,” Fanelli said, “just a regular sale price.”

That’s in part because retailers have done a better job recently of whittling down the extra merchandise they had on hand. “Inventory is in line this year,” Jessica Ramírez, an analyst at Jane Hali & Associates, said in an interview. “There’s not as much pressure to move inventory as last year.”

Other data companies are forecasting a similarly sluggish holiday shopping season. Adobe Analytics expects online revenue growth in the US during the next two months to be 4.8% versus a year earlier. While that’s a faster pace than last year, it’s well below the average annual rate of 13% growth before the pandemic. Mastercard, meanwhile, sees US retail sales online and in-store up 3.7% this year versus last. That’s back to the pace of pre-pandemic growth.

Consumers are “now very price-conscious,” Vivek Pandya, lead analyst at Adobe Digital Insights, said in an interview. Preliminary data from Adobe showed that online sales on Black Friday rose 7.4% from last year, due largely to deep discounts on products like toys, apparel and computers. Those figures aren’t adjusted for inflation.

Adobe, Salesforce and Mastercard track different transactions, so the pace of growth is different, even if the general trajectory of their forecasts is similar. Most of the data tracks online sales, a reflection of the difficulty tracking in-store sales in real time as well as the continued growth of e-commerce and a shift away from the doorbuster sales of Black Fridays past.

Still, many shoppers turned out on Friday to celebrate the unofficial start to the holiday shopping season. At Westfield UTC, a high-end mall in San Diego, the parking lot was full by 11 a.m. local time. Stores including Gap, Abercrombie & Fitch, Sephora and Lululemon were packed with shoppers buying products including kids’ pajamas, skin-care gift sets and colorful leggings. At New York’s Hudson Yards shopping center, any store with an in-your-face sale sign was drawing a crowd. Uniqlo, Zara and H&M, with placards offering 30%, 40% and 50% off, were bustling.

Consumer Trade-Offs

Personal savings are dwindling from pandemic highs and while the rate of inflation is moderating, many items remain more expensive than they were a couple of years ago. Higher interest rates are also raising the price of buying homes and cars. That’s forcing consumers to make trade-offs.

Last year, Lyndsey and Tyler Manassa spent as much as $1,000 on gifts for their family. This year, they’re saving up for the baby they are expecting in January. “No Christmas gifts this year,” said Tyler while shopping for new-home essentials at a Target in the Logan Square neighborhood of Chicago.

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Still, some of the consumer pullback is a return to a more normal pace of shopping after the topsy-turvy shopping experiences of recent years, notes Michelle Meyer, US chief economist at Mastercard Economics Institute. This year’s sales forecast points to a “return to a more balanced economy,” she said in an interview. Unemployment remains low, she added. “Consumers have the ability to spend.”

In the immediate aftermath of Covid-19, consumers who felt flush with extra savings and stimulus payments splurged, allowing retailers to cut back on discounts. Then came the whiplash of supply-chain chaos, which meant that the merchandise that didn’t arrive on time for the 2021 shopping season was piling up ahead at the end of 2022. Retailers offered steep discounts to clear those items, which helped to juice sales.

Those deep discounts last year, though, appear to have conditioned some shoppers to expect even better sales this year. Mark Talty visited the American Dream megamall in New Jersey on Friday in the hopes of buying a jacket from North Face. “I don’t see the great sales that they talk about,” he said. He plans to spend about the same amount on holiday gifts this year as he did in 2022.

‘Not Realistic’

Melissa Minkow, director of retail strategy at digital consultancy CI&T, said she’s seen similar complaints from shoppers on social media. “There were expectations that discounts were going to be very, very deep,” she said in an interview. “That’s just not realistic.”

She said she saw great discounts, noting Madewell was offering 50% off of everything and Alo Yoga, 30%. “People are so cost conscious now that they are really looking to catch a break anywhere they can,” Minkow said. But retailers still need to protect their profits. The average discount rate is around 30% so far this holiday season, according to Salesforce, which is higher than 2019 and well above the rate in 2021 of 24%.

Sales are likely to get better — at least from shoppers’ perspective — in the coming days.

Shoppers who want to buy toys and apparel should wait until Sunday for the deepest discounts, according to Adobe. And for electronics and furniture, it’s best to wait until Monday. Retailers often cut their prices as the holiday shopping season progresses in order to boost sales or to ensure they sell down excess merchandise they have on hand. That could chip away at the profits of the companies selling that type of merchandise.

By contrast, companies that are expected to do well this holiday season include off-price retailers such as TJ Maxx owner TJX Cos. and Ross Stores Inc., which have good prices and wide assortments, and companies selling in-demand fitness and outdoor-gear items that tap into the wellness trend, Ramírez said. She said Nike Inc., Hoka owner Deckers Outdoor Corp., On Running parent On Holding AG, North Face Inc. and Lululemon Athletica Inc. are poised to benefit.

— With assistance from Daniela Sirtori-Cortina, Leslie Patton, and Kim Bhasin