By Amina Niasse
NEW YORK (Reuters) - U.S. in-store retail sales swelled last week by the most since December courtesy of aggressive discounts, but the year-over-year sales gain for the week covering the traditional Black Friday shopping season kick-off was the smallest in six years.
The Johnson Redbook Index, which samples about 9,000 U.S. general merchandise retailers, rose by 6.3% on a year-over-year basis in the week ended Nov. 25 from the prior week's 3.4% gain, Redbook Research said on Tuesday. Sales volumes increased for retailers during the Black Friday weekend where cost-aware consumers sought out larger discounts on expensive purchases, according to the report.
"Some reported that shoppers hesitated to buy higher ticket items and were more value-conscious as people compared prices and shopped online," the report said. "Others held off shopping and waited for deep discounts on the upcoming Cyber Monday."
Black Friday, the day after the Thanksgiving holiday, fell on Nov. 24 this year.
Buyers are experiencing the cheapest holiday shopping season in years with toys, games, and hobby gear dipping in price for the first time since 2020. Sporting goods prices also fell this holiday for the first time since 2018, data from the Bureau of Labor Statistics (BLS) showed.
Discounts have risen steadily since the pandemic, during which supply-chain difficulties and increased demand for goods pushed prices higher. The price cuts come on the back of the Federal Reserve's aggressive interest rate hikes, indicating tight monetary policy may finally be capping the aggressive price increases retailers had imposed since the COVID-19 pandemic.
Despite the sales gain, the increase is the smallest Black Friday-week gain since 2017's 4.8% year-over-year increase.
Another index published by Mastercard (NYSE:MA) indicated more shoppers opted to take advantage of deeper and earlier online discounts, with e-commerce sales on Nov. 24 growing by 8.5% on a yearly basis compared to a 1.1% increase for in-store sales.
“Consumers are navigating the holiday season well and taking advantage of holiday promotions, giving them ample choice as they hunt for gifts for everyone on their list,” said Steve Sadove, senior advisor for Mastercard. “Consumers are also shopping smarter, using all of their tools – from searching across channels to cross checking on apps and websites – to maximize value while they spend time with friends and family.”