Reports on the beginning of the Christmas holiday shopping season do not look good for retailers. CNBC is reporting the Black Friday sales were down a significant 28.3% from pre-pandemic levels in 2019 [link]. The difference was not made up inside on-line sales as Cyber Monday had the first drop in sales in the history of tracking on-line sales [link].
The financial pundit spin, intended to protect the Biden administration, includes a talking point that U.S. consumers decided to make their holiday purchases early this year, therefore the holiday spending metric no longer applies.
As the narrative is built, people were concerned about shortages of products so they purchased them early in the year. While part of that is likely true, early shopping is not that unusual and cannot account for such a massive drop in purchasing.
The same narrative was used to explain the drop in Cyber Monday sales: “Shoppers nationwide spent nearly $11 billion on digital sales on Cyber Monday, a tracking firm said — a decrease of 1.4% from last year and the first decline ever for a major shopping holiday.” […] “It spread out e-commerce spending across the months of October and November.” There’s virtually no limit to how the financial media will avoid identifying the real motive for declining sales, inflation and the lack of disposable income.
Inflation continues to be a major issue for all middle-class workers, and there does not appear to be any end in sight for even more price increases. As gas, energy and food prices jump so significantly the amount of disposable income available for other non critical purchases becomes limited. This is a simple Main Street checkbook reality felt by most Americans and willfully avoided by the Wall Street pundits.
The question of spending and purchasing priority is best identified by asking consumers the question: Can you afford to spend more this year, and will you?
