Retailers are gearing up for an unprecedented holiday shopping season that kicks off the traditional Black Friday and unfolds amid the COVID-19 pandemic.
Stores traditionally offer big discounts on the Friday after Thanksgiving, opening the month-long pre-holiday shopping season that is critical for the retail sector.
Consumer spending is expected to pick up overall during the holidays, but the rapid spread of the coronavirus in recent weeks has left retailers worried that new restrictions might push people away from shopping.
On Tuesday, executives at clothing brand American Eagle Outfitters said hotspots of the coronavirus are affecting store traffic.
Rival brand Gap has warned that the recent surge in coronavirus cases could reduce store traffic.
Abercrombie & Fitch expects sales volumes to decrease in the current quarter compared to prior years.
“There is still a lot of uncertainty about the magnitude and duration of the pandemic, and the economic impact of sustained high unemployment,” said Corey Barry, chief executive of Best Buy, an electronics and home appliance retailer.
In October, US consumer spending rose for the sixth month in a row, rising 0.5 percent, according to the US Department of Commerce.
However, last month, household income fell 0.7 percent, and consumer confidence declined amid a surge in morbidity.
Spending is expected to increase 3.6-5.2 percent year-on-year in November and December, according to the National Retail Federation.
“People don’t spend money on things like travel, sporting events or concerts. Research shows that as disposable income rises, people are more likely to buy our brands in advance of the holidays, ”suggested Sonia Singal, CEO of Gap.
Other retail executives point out that some shoppers remain wary of going to brick-and-mortar stores, preferring to shop online.
“We see that some consumers are still reluctant to shop in stores. Others may be cutting back on shopping this holiday season, ”said Ernie Herrman, CEO of TJX Cos retail chain, which includes stores such as TJ Maxx and HomeGoods.
Giant Macy’s fears tight restrictions in many cities will affect demand.
As a result of temporary store closings, Macy’s sales fell to $ 3 billion in the first quarter, but rose to about $ 3.6 billion and to $ 4 billion in the next two periods.
However, retailers say they are now better prepared than they were at the beginning of this year. In order to attract buyers, they actively advertise online ordering systems with the ability to receive goods in stores, as well as fast delivery of online purchases.