By Ananya Mariam Rajesh and Bianca Flowers
(Reuters) -Black Friday spending in U.S. retail stores was muted this year in contrast to a more robust rise online, as bargain-hungry Americans skipped stores in favor of their phones and laptops, according to data from Mastercard (NYSE:MA) and other data providers.
Sales at brick-and-mortar stores grew just 0.7% year-over-year, according to preliminary estimates by payments processor Mastercard, and were lower according to data firm Facteus.
Yet U.S. e-commerce sales increased by a hefty 14.6% online, according to Mastercard SpendingPulse, a metric measuring U.S. retail sales across the Mastercard payments network combined with estimates for cash and check payments.
The estimates aren't adjusted for inflation. "If you layer in inflation, in-store (spending) is even lower," said Jonathan Chin, co-founder and head of data at Facteus. The firm looked at spending patterns on debit and credit cards online and in stores on a seven-day rolling basis year-over-year.
Facteus said online sales grew 11.1% and in-store sales fell 5.4%. With inflation, those numbers drop to 8.5% online growth and an 8% in-store decline.
Michelle Meyer, chief economist at Mastercard Economics Institute, noted that while overall inflation is running at more than 2%, popular holiday-related purchases, such as appliances, clothing, sporting goods, personal care products and jewelry, have been either declining in price, or increasing only modestly, over the last year.
Black Friday, the day after U.S. Thanksgiving, kicked off the holiday shopping season for retailers. Competition has intensified to win shoppers seeking discounts, such as Corey Coscioni, age 58.
Coscioni looked for bargains both online and in Chicago-area stores on Friday, seeking "gifts for everyone: my wife, my daughter, and myself." His stops included Bloomingdale’s, Macy’s and Anthropologie. “While we’re waiting in line, I’ll be shopping.”
MUTED SALES
Ahead of Black Friday, many shoppers visited stores to browse, taking in what merchandise and prices were available. "They were waiting," said Meyer, the Mastercard economist. "But then when the Black Friday sales hit, we had this big concentration of spending, which was really done online given that's where you have the greatest amount of power and choice as a consumer."
Department store chains such as Macy's (NYSE:M) and Kohl's (NYSE:KSS), as well as big-box retailer Target (NYSE:TGT), could see muted sales this season, which is shorter with only 26 days between Thanksgiving and Christmas.
Sales at Best Buy (NYSE:BBY) and Target on Friday were relatively flat year-over-year, according to Facteus.
U.S. shoppers' strong purchases online from mobile phones, laptops, desktops and other devices potentially favored e-commerce giants such as Amazon.com (NASDAQ:AMZN) and Walmart (NYSE:WMT). Walmart, which operates 4,700 U.S. stores, has invested heavily in store-to-home deliveries for its online shoppers.
E-commerce retailers including Shein, PDD's Temu, and TikTok Shop, of Beijing-based ByteDance’s TikTok social media platform, also showed strong growth in sales in the seven days through Friday, compared to a year earlier, Facteus said.
Overall spending on Friday rose 3.4% year-over-year, according to Mastercard SpendingPulse, which excludes automotive sales and is not adjusted for inflation. From Nov. 1 through Dec. 24, spending in stores and online is expected to be up 3.2% year-over-year, according to its earlier estimates.
A tally by Adobe (NASDAQ:ADBE) Inc on Saturday showed that Americans spent roughly $10.8 billion online on Friday, up 10.2% from a year earlier. Makeup, bluetooth speakers and espresso machines were top sellers, it said. Adobe keeps track of devices that use its software to help power more than 1 trillion visits to U.S. retail sites.
Separately, Salesforce (NYSE:CRM), a cloud-based software company that tracks a different array of spending categories, said U.S. online sales rose 7% on Friday to $17.5 billion. Shoppers bought more home appliances and furniture online, according to Salesforce, which said it analyzed the activity of more than 1.5 billion global shoppers.