Home CE Retail Black Friday Deals Should Look More Familiar in 2023  

Black Friday Deals Should Look More Familiar in 2023  

Black Friday Deals Should Look More Familiar in 2023
Retail struggles over the past year have pushed Bed Bath & Beyond into bankruptcy and Walmart to close 23 stores.

Black Friday, the brick-and-mortar retail craze taking place a day after Thanksgiving that has traditionally marked the beginning of the holiday shopping season, is set to take place this year on November 24 with Cyber Monday, the eCommerce version of Black Friday, following on November 27.   

Before the pandemic, Black Friday was the Super Bowl of discounts and conjured up images of people camped out in front of retail outlets stampeding over each other in their rush to load up shopping carts.  

However, in 2022, the holiday shopping season was anything but normal with retailers battling excessive inflation, north of 7 percent, and issues with too much inventory, a product of lingering supply chain issues. This dynamic was reflected in the timing of last year’s Black Friday sales, which were far more aggressive and began as early as September.   

Coming off the heels of such an atypical Black Friday shopping season in 2022, expectations are murky for the coming retail season. Will early sales become the norm in 2023? Or, will the retail sector correct toward pre-pandemic shopping dynamics?   

Consumers have traditionally braved the elements to be the first to claim in-store deals. 

Consulting the Numbers   

Comparing current inflation and inventory levels with that of previous years is a good place to start when it comes to setting expectations for 2023. At the moment, the consumer price index (CPI), a metric that measures national inflation, is at 2.97 percent, which is down from 4.05 percent in May, and 9.06 percent in June of 2022.   

While inflation has shown a definite improvement over the past year, it has likely not recovered enough to promote a significant increase in holiday spending among consumers. According to the CNBC Supply Chain Survey as of May 2023, 71 percent of retailers surveyed expect consumers to cut back on holiday shopping. As a result, 69 percent of retailers are planning on making equivalent or smaller purchase orders in comparison with 2022. Moreover, of the 43 percent of retailers planning on stocking fewer goods, over 79 percent are planning to cut ordering by more than 6 percent.   

Out of the retailers surveyed by CNBC, including organizations such as the National Retail Federation, the Council of Supply Chain Management Professionals, and the United National Consumer Suppliers, 67 percent expect consumers to be on the lookout for discounts. These statistics all point to weak spending this holiday season   

What this Means for 2023 Black Friday Expectations in the Independent Channel  

Overinventory was lethal to the entire retail sector in 2022, forcing big box stores such as Target and Walmart to embark on aggressive liquidation campaigns that in Target’s case cut profits by as much as 90 percent and forced Walmart to close 23 outlets. The crisis also put the final nail in the coffin for Bed Bath & Beyond, which declared bankruptcy on April 23.   

“Much as we all thought that the retailers learned their lesson — that they’re better off ordering less, chasing demand a little bit, and having very clean, profitable sales, meaning fewer markdowns — they all fell into that trap of: ‘Oh, if we just have more, we’ll sell it’… And then they got caught.” said Joe Feldman, senior managing director with Telsey Advisory Group, in an interview with Retail Dive.   

Excess inventory caused big box stores to embark on aggressive liquidation campaigns in 2022

As a result of these massive liquidation campaigns, the independent channel was forced to navigate an extremely competitive retail landscape, which forced markdowns and slimmer profit margins.  

However, the good news for the 2023 holiday shopping season is that the majority of large retailers plan to retain or cut ordering levels in comparison to last year. So, it is unlikely that big box stores will have as much excess inventory in desperate need of liquidation. As a result, while the independent channel can expect weak spending during the 2023 holiday season, Black Friday sales are likely to look significantly more normal than in 2022.   

Paul Gagnon, Vice President and Industry Advisor of Consumer Technology at Circana said in an exclusive interview with Dealerscope: “We are expecting a return of early October promotions this year, like 2022. However, according to Circana pricing data, promotions have become less effective in recent months which points to consumers waiting for the shopping periods that are expected to offer the largest discounts. This would suggest that Black Friday proper and the usual big shopping periods during the holidays will see a return to greater emphasis.”