Amazon, Walmart start holiday sales with expected ‘huge’ deals

Bloomberg

Holiday deals are coming back, bringing a measure of relief for US shoppers squeezed by inflation.
Tech gadgets to sporting goods will see “massive” online discounts, with the best bargains likely in late November, Adobe Analytics said in a report. Walmart Inc is already touting deals on computers, toys and air fryers this week, while Amazon.com Inc will begin “early access” sale. Target Corp.’s weekly Black Friday deals have started.
Retailers are racing to tap seasonal demand as they struggle to reduce bloated inventories, and they have little choice but to dangle price cuts in stores and online to entice consumers who have been hammered by this year’s surge in inflation. That’s a big shift from 2021, when relatively flush shoppers snapped up goods amid fears that transportation snarls would lead to shortages.
Online holiday sales from November 1 through December 31 are projected to be $209.7 billion, Adobe said, up only 2.5% from a year ago. That pales in comparison to last year’s 8.6% gain. And when accounting for the expectation that annual US inflation rate will be around 8%, many retailers may actually make fewer sales this year, though at higher prices.
Part of the reason for the sluggish outlook for November and December is that retailers are trying to coax customers into starting their shopping early.
Amazon’s “Prime Early Access Sale” is expected to pull some spending forward, much as the company’s Prime Day in July fuelled a rising tide for all retailers, said Taylor Schreiner, senior director of Adobe Digital Insights.
Another drag on holiday spending is that shoppers have less money for discretionary purchases as inflation forces them to spend more on essentials such as fuel and groceries. Americans are also taking more trips this year as pandemic eases.
Adobe’s soft outlook for holiday sales is consistent with what other industry watchers have predicted. Deloitte is also predicting a slower season as inflation takes its toll.
Retailers hope price cuts will rekindle shoppers’ interest in items that have lingered on shelves, including electronics and housewares. Best Buy Co. is starting a two-day sale with discounts on televisions, headphones and Apple Inc. laptops.
More promotional activity will further pressure results at big retailers, many of which cut their profit forecasts. Some firms might get a little relief on costs as transportation bottlenecks ease, reducing the strain on margins. But it will be hard for them to avoid joining the rush to lure shoppers with discounts.