Nov 24, 2022
Retailers look for Black Friday comeback as inflation has shoppers hunting for deals
The Canadian Press,
Retailers are cautiously optimistic about Black Friday and holiday season sales: Retail analyst
Annie Titheridge's plan is to arrive at the mall before it opens, buy gifts for everyone on her list and beat the afternoon rush-hour traffic home.
"My husband and daughter think I'm mad going shopping on Black Friday," said Titheridge, who will drive from King City north of Toronto to the Yorkdale Shopping Centre for the day.
"It does get absolutely crowded but I still prefer to shop in stores," she said. "I prefer to touch and feel products before buying."
The biggest shopping event of the year arrives Friday, a sales bonanza heralded by a flurry of promotional emails, online ads and paper flyers.
Black Friday has evolved in recent years from a one-day event — when shoppers lined up overnight outside big box stores to snag doorcrasher deals — into an entire season of sales.
"It's less about a single day and more about a prolonged period," said Eric Morris, managing director of retail for Google Canada.
"It really has morphed in Canada from Black Friday and Cyber Monday into many, many weeks of heightened commercial activity."
Still, many Canadians plan to hunt for deals on Black Friday proper, with shopping in brick-and-mortar stores expected to make a comeback.
New research from professional services firm JLL suggests Canadian shoppers will be more frugal this holiday season but also eager to buy in stores.
A survey of 982 Canadians conducted from late October to mid-November found 90 per cent of respondents plan to spend time in shopping centres, though most will research online first.
"Shoppers are going to physical retail (stores) like it’s 2019," the JLL 2022 retail holiday survey report said. "Fewer shoppers are hesitant to shop in person."
Yet gift-giving budgets are expected to be down 13 per cent as Canadians spend more money on basics like rent, groceries and gas.
Indeed, two-thirds of respondents to a recent Chartered Professional Accountants of Canada survey said inflation will make it harder to buy gifts this holiday season.
More than one-in-five Canadians also expect to take on debt to pay for gifts, the poll of more than 2,000 Canadians by CPA Canada conducted by Ipsos earlier this fall found.
Titheridge is banking on finding some good Black Friday sales at the Yorkdale mall — one of Toronto's biggest shopping centres.
"I'm hoping to get some good bargains because things are more expensive now," she said. "My husband recently retired so we're trying to be more careful with how we spend our money."
In its 2022 holiday retail outlook, Deloitte Canada said overall holiday spending is expected to drop this year amid skyrocketing inflation, recessionary concerns and higher interest rates.
With less money to spend on gifts, Canadians will be more price sensitive than usual, said Marty Weintraub, a partner and national retail consulting leader at Deloitte.
"Deal hunting will be probably at a bit of an all-time high as Canadians look to stretch their holiday budget," he said.
Even on Black Friday, Canadians are expected to be more selective with their spending this year.
Canadians that encounter "frictions" while shopping, such as a hiccup with product availability or an uncompetitive price, will quickly move on, said EY Canada grocery and consumer packaged goods leader Elliot Morris.
"The cost of that friction today is people delaying or actually forgoing a purchase altogether," he said. "Pricing and availability are critical ... it won't take much for people to move on."
Meanwhile, many retailers have more inventory on hand than expected — a hangover from the supply chain headaches earlier in the year that prompted stores to order goods earlier than usual just as high inflation began to depress consumer demand.
The situation could lead to strong promotional activity throughout the holidays, including into December and even after Christmas.
"As the economy slows, there are areas of inventory which clearly have built up with retailers," Morris said. "As we get through the balance of the holiday season, if that inventory continues to sit on shelves ... you will see deeper discounts."
Meanwhile, Titheridge has about 15 people on her shopping list she plans to buy for on Black Friday.
Many of them are relatives in the U.K., where she'll be spending the holidays, she said.
"I'm hoping Roots and Hatley will have some good sales, those are brands that are difficult to get in the U.K.," she said. "I'm also planning to get some gifts for my husband at Banana Republic, hopefully they'll do a big percentage off."
And if the price is right, she just might buy a little something for herself as well, Titheridge added.
"If the deals are good and something jumps out at me, what can I do?"