Bargain hunters will be unhappy this holiday season, as retailers hold back on discounts
S E E D E D C O N T E N T
Amid a supply chain crunch and shipping snarls that have kept retailers scrambling to keep shelves stocked, shoppers panicking about not finding enough gifts will face another shortage this season — deals.
Across the board, retailers including Best Buy, Kohl's and Macy's have limited the number of discounts at their stores as billions of dollars of merchandise sits on container ships at American ports.
Rising prices, increased disposable income driven by stimulus money and record retail bankruptcies have also led retailers to roll out fewer promotions, according to company earnings calls and retail analysts.
"Our goal is not to accelerate in promotional activity, but we'll also see where the landscape goes and make sure that we're continuing to gain share," Ulta Beauty CEO Dave Kimbell told investors last month. "But we won't be leading promotional activity."
This year's promotional levels have been at historic lows, Macy's Chief Financial Officer Adrian Mitchell told investors in September. The company is focused on items with higher average price points, he said, adding that Macy's has "been more thoughtful about the categories that need promotion."
Holiday spending is expected to grow by as much as 10.5 percent, compared to 2020.
According to recent forecasts from the National Retail Federation, holiday spending is expected to "shatter previous records," with sales growing between $843.4 billion and $859 billion, an 8.5 percent to 10.5 percent growth rate from 2020. While much of this growth may be attributed to retail's emerging pricing power, it is shaping up to be a heavier hit on shoppers' wallets as they head in to the holiday season.
"Retailers will be careful to manage inventory based on shortages as well as oversupply," Marshal Cohen, retail chief industry adviser at NPD market research firm, told NBC News in an email. "Look for promotions to match last year's, just not as big or with as many deep discounts. As long as consumers spend early, retailers will promote less."
Already, shoppers have been paying more. This year, Labor Day and Memorial Day sales saw price drops of between 2 to 7 percent across electronics, toys, and furniture and bedding — a slim discount compared to 2020 and 2019 when prices dropped by between 5 and 11 percent, according to Adobe Analytics.
"You will find retailers look at early signals of how consumers are shopping to see about pricing," said Rod Sides, Deloitte vice chairman and lead of the firm's U.S. retail and distribution practice. "We will see how inventory plays out and retailers might cut back on promotions because of inventory."
As long as consumers spend early, retailers will promote less.
Matthew Shay, president and CEO of the National Retail Federation, told reporters in a media call Wednesday that despite ongoing supply chain challenges, retailers are prepared for the holiday season with plenty of inventory. Retailers are focused on nudging shoppers toward in-stock items when they find an item they were looking for is no longer available, he said.
Still, retailers have announced holiday deals at a rapid clip well before Halloween even took hold. Walmart already ran two Black Friday ads, which include deals on Apple AirPods, Roku streaming sticks and Lego bricks. Kohl's recently announced its holiday sales campaign and already wrapped an early holiday shopping event last week that included deals on Ninja kitchen appliances, Vans sneakers and Calvin Klein intimate apparel. Lowe's announced the Season of Savings event, which began Thursday, where it plans to drop new savings every week.
But this year, promotions may not be focused across a broad sector of items or free shipping but price matching guarantees, said Kristin McGrath, shopping editor and expert at RetailMeNot, in an email to NBC News.
"Take Best Buy as an example — these are promos that allow shoppers to get a refund of the difference if something they bought early goes on sale for a lower price before Black Friday," McGrath said. "Whereas, in the past, retailers enticed shoppers with free shipping, this year, they're trying to instill confidence in early shopping."
Target is also offering price matching. Between now and Dec. 24, shoppers can request a price match if the price of a purchase goes lower later on at Target.
Shoppers have already begun to refine their shopping strategies to nab deals while they are available. Marvinette Hale, a professional discount shopper based in Hanover, Pennsylvania, told NBC News that more shoppers are staying up until midnight stalking deals online to scoop up a discounted item before it's gone.
"The wow factor deals are just not out there anymore, especially right now," she said. "I definitely do think people are looking for discounts now and trying to save more money."
Instead of coupons and browsing online and in-store sales, she's leaning more on rewards credit cards to get deals and gas discounts.
"Always by now you're hearing about that one hot toy — and you're not even hearing about that right now," she said. "It's dead."
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Consuming less imported plastic crap is a good thing.
I still have some presents I did not give last year, so half of my list is ready to go.
Calendar store, ABC store, Hickory Farms and I think I will get my cousin who has everything a title as a Scottish Lord, shopping planning is done
I don’t have much to buy either. All my nieces and nephews are about grown so they like money. My son and his wife are getting dinner, a movie and an overnight babysitter on us. My husband and I always just buy something for the house as our gift to each other. Now as for the new granddaughter, I started that shopping a few months ago, hehehe.
lol, you can never over do it for the grandkids.
No you can’t and it’s so much fun picking things for them
A retailer's paradise. With limited advertising and sales incentives, the shelves will be laid bare and lotsa money paid via reduced inventory. No after Holiday sales to clear shelves, until the supply chain returns to normal. That will be the real hurdle, imo.
Retailers wish they had full shelves right now- so long as they were the only retailer that did. They could name their own price; and literally lock out the competition. There is plenty of money to be made right now for those that have product.
I just bought stock in several major online gaming companies. Many kids (and overgrown kids) play online games that are pay for performance enhancing mods; faster character development; or gear. People with nothing else to purchase for family members or friends will be making online gifts purchases for these games; or just buying prepaid credit cards for people to use. Everything will guaranteed to be in stock; and these games even conduct holiday sales specials.
All my grandson ask for the last few years are gift cards for the games. Last year I bought my daughter a subscription to ebooks. My future son-in-law likes to gamble on line so he will get something for that.
I plan to just give grocery gift cards.
Let the tire hoarding begin...