International
Inflation clouds ‘Black Friday’ kickoff of US holiday shopping season
| By AFP | John Biers |
Retailers unveiled a trove of fresh seasonal promotions Friday, as they try to coax sales from reticent shoppers whose holiday cheer has been tempered by inflation and worries over a softening economy.
“Black Friday,” the unofficial start of the US holiday shopping season, announced itself with the annual day-after-Thanksgiving deluge of online promotions and early store openings.
But industry experts have been cautious about this year’s prospects, in light of price pressures that have exacerbated concerns about an oversupply of goods.
A year ago, retailers faced product shortfalls in the wake of shipping backlogs and factory closures related to Covid-19. To avert a repeat, the industry front-loaded its holiday imports this year, leaving it vulnerable to oversupply at a time when consumers are cutting back.
“Supply shortages was yesterday’s problem,” said Neil Saunders, managing director for GlobalData Retail, a consultancy. “Today’s problem is having too much stuff.”
Saunders said retailers have made progress in reducing excess inventories, but oversupply will mean deep discounts in many categories, including electronics, home improvement and apparel.
Online shoppers spent $5.3 billion on Thanksgiving Day itself, according to an Adobe report early Friday, up 2.9 percent from a year ago.
Higher costs for gasoline and household staples like meat and cereal are a nationwide issue, and they do not burden everyone equally.
“The lower incomes are definitely hit worst by the higher inflation,” said Claire Li, senior analyst at Moody’s. “People have to spend on the essential items.”
Diminishing savings
Leading forecasts from Deloitte and the National Retail Federation project a single-digit percentage rise in sales, but this is unlikely to exceed the inflation rate.
Adobe has forecast an overall holiday sales increase of 2.5 percent, less than a third of the level from last year. Besides inflation, Adobe cited higher Federal Reserve interest rates and an uptick in brick-and-mortar shopping as factors.
European countries like Britain and France have been marking Black Friday for a few years now too, but with soaring inflation, merchants there face a similar dilemma.
“Retailers are desperate for some spending cheer but the worry is that it could turn out to be more of a Bleak Friday,” said Hargreaves Lansdown analyst Susannah Streeter.
US shoppers have remained resilient throughout the pandemic, often spending more than expected even when consumer sentiment surveys suggest they are in a gloomy mood.
Part of the reason has been the unusually robust state of savings, with many households banking government pandemic aid payments at a time of reduced consumption due to virus restrictions.
But that cushion is starting to whittle away. After hitting $2.5 trillion in excess savings in mid-2021, the benchmark fell to $1.7 trillion in the second quarter, according to Moody’s.
Accompanying this drop has been a rise in credit card debt visible in Federal Reserve data and anecdotally described by chains that also report more purchases made with food stamps.
Mixed picture
Recent earnings reports from retailers paint a mixed picture on consumer health.
Target stood on the downcast side, pointing to a sharp decline in shopping activity in late October, potentially portending a weak holiday season.
The big-box chain expects a “very promotional” holiday season, said Chief Executive Brian Cornell.
“We’ve had a consumer who has been dealing with very stubborn inflation for quarter after quarter now,” Cornell said on a conference call with analysts.
He added that customers are “shopping very carefully on a budget.”
But Lowe’s, another big US chain specializing in home-improvement, offered a different view, describing the same late-October period as “strong.”
“We are not seeing anything that feels or looks like a trade down or consumer pullback,” said Lowe’s Chief Executive Marvin Ellison.
Consumers like Charmaine Taylor, who checks airline websites frequently, are staying vigilant.
Taylor, who works in child care, has had her travel plans thwarted due to exorbitant plane ticket prices — and she is unsure of how much she can spend on family this year.
“I’m trying to give them some little gifts,” she said at a park in Harlem earlier this week. “I don’t know if I’ll be able to. Inflation is hitting pretty hard.”
International
Uribe requests freedom amid appeal of historic bribery conviction
Former Colombian President Álvaro Uribe on Monday requested that the Supreme Court restore his freedom while he appeals the historic 12-year house arrest sentence he received for bribery and procedural fraud.
Uribe, the most prominent figure of Colombia’s right wing, was convicted last week by a lower court for attempting to bribe paramilitary members into denying his ties to the violent anti-guerrilla squads.
Since Friday, the 73-year-old has been under house arrest at his residence in Rionegro, about 30 km from Medellín. The judge justified the measure by citing a risk of flight.
However, Uribe’s defense team rejected that argument and formally petitioned the court to immediately lift the detention order, claiming it lacks legal basis.
Uribe, a dominant force in Colombian politics for decades, is now the first former president in the country’s history to be convicted and placed under arrest, found guilty of witness tampering and obstruction of justice to prevent links to paramilitary groups.
He has repeatedly denounced the trial as politically motivated, blaming pressure from the leftist government currently in power.
His political party, Centro Democrático, has called for nationwide protests on August 7 in support of Uribe, who remains popular for his hardline stance against guerrilla groups.
Uribe has until August 13 to submit his written appeal. The case will then move to the Bogotá High Court, which has until October 16 to uphold, overturn, or dismiss the sentence. If the deadline passes without a decision, the case will be archived.
International
U.S. Embassy staff restricted as gunfire erupts near compound in Port-au-Prince
The poorest country in Latin America and the Caribbean is currently engulfed in a deep political crisis and a wave of violence driven by armed groups — a situation that an international security mission led by Kenya is attempting to stabilize.
Due to the worsening security conditions, the U.S. government has suspended all official movements of embassy personnel outside the compound in Port-au-Prince, the U.S. State Department announced Monday in a security alert posted on social media platform X.
“There are intense gunfights in the Tabarre neighborhood, near the U.S. Embassy,” the alert reads, urging the public to avoid the area.
Tabarre is a municipality located near Port-au-Prince International Airport, northeast of the Haitian capital.
According to a July report by the UN High Commissioner for Human Rights, at least 3,141 people were killed in Haitibetween January 1 and June 30 of this year.
International
Israel says 136 food aid boxes airdropped into Gaza by six nations
The Israeli military announced on Sunday that 136 boxes of food aid were airdropped into Gaza by the United Arab Emirates, Jordan, Egypt, Germany, and Belgium.
“In recent hours, six countries conducted air drops of 136 aid packages containing food for residents in the southern and northern Gaza Strip,” read the statement, which added that the operation was coordinated by COGAT, the Israeli defense body overseeing civil affairs in the occupied Palestinian territories.
The Israeli military emphasized that they will “continue working to improve the humanitarian response alongside the international community” and reiterated their stance to “refute false allegations of deliberate famine in Gaza.”
The announcement comes as UN agencies warn Gaza faces an imminent risk of famine. More than one in three residents go days without eating, and other nutrition indicators have dropped to their worst levels since the conflict began.
The agencies also noted the difficulty of “collecting reliable data in current conditions, as Gaza’s health systems —already devastated by nearly three years of conflict— are collapsing.”
Meanwhile, Gaza’s Hamas-run Health Ministry reported on Sunday that hospitals in the enclave recorded six deaths from hunger and malnutrition on Saturday, all of them adults.
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