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
Conclave to choose pope Francis’ successor could begin in early may
The conclave, which in the coming weeks must choose the successor to Pope Francis, will strictly follow a precise protocol refined over centuries.
The 135 cardinal electors, all under the age of 80, will cast their votes four times a day — except on the first day — until one candidate secures a two-thirds majority. The result will be announced to the world through the burning of the ballots with a chemical that produces the eagerly awaited white smoke, accompanied by the traditional cry of “Habemus Papam.”
The start date for the conclave could be announced today, as the cardinals are set to hold their fifth meeting since the pope’s passing. Luxembourg Cardinal Jean-Claude Hollerich suggested it could begin on May 5 or 6, following the traditional nine days of mourning. According to German Cardinal Reinhard Marx, the conclave could last only “a few days.”
Although the late Argentine pontiff appointed the majority of the cardinal electors, this does not necessarily ensure the selection of a like-minded successor. Francis’ leadership style differed significantly from that of his predecessor, Benedict XVI, a German theologian who was less fond of large public gatherings. It also marked a contrast with the popular Polish pope, John Paul II.
The Argentine Jesuit’s reformist papacy drew strong criticism from more conservative sectors of the Church, who are hoping for a doctrinally focused shift. His tenure was marked by efforts to combat clerical sexual abuse, elevate the role of women and laypeople, and advocate for the poor and migrants, among other causes.
International
Spain’s PM calls for calm and patience amid ongoing blackout
Spanish Prime Minister Pedro Sánchez said Monday evening he hoped the electric service would be fully restored across Spain “soon,” while urging the public to act with “responsibility and civility” amid the blackout that has affected the Iberian Peninsula since midday.
Sánchez explained that the outage was triggered by “a strong fluctuation (…) in the European power system, which led to a widespread supply interruption across the Iberian Peninsula and some areas of southern France.”
After more than six hours without power, “service has been restored in several northern and southern territories” of the Iberian Peninsula, Sánchez said, adding that “hydroelectric power plants across the country have been reactivated, which should allow us to fully restore electricity in Spain soon.”
“I call on citizens to cooperate with the authorities, to act responsibly and civilly, as we have done in past crises,” Sánchez urged, addressing the chaos unfolding in the streets, with people left without phones, metro services, or trains.
The Prime Minister also asked people to “minimize travel,” “avoid spreading unverified information,” rely solely on official sources for updates, and make “responsible use of mobile phones” by keeping calls brief.
“There are no security concerns,” Sánchez stressed, and “our hospital system is functioning properly.”
International
Madrid carries out 286 elevator rescues amid massive blackout
Emergency services carried out 286 rescue operations to free people trapped in elevators in Madrid following a blackout that has been affecting the Iberian Peninsula since midday Monday, the president of the Madrid region reported.
“What we are dealing with most frequently right now are cases of people trapped in elevators,” said Madrid regional government leader Isabel Díaz Ayuso in an interview with Antena 3. She added that Madrid’s extensive metro system, which transports around two million people daily, was evacuated “without incident.”
One man posted a video on social media saying he had been trapped in an elevator without phone service for over half an hour due to the power outage.
“By banging on the door and shouting, a neighbor heard me and called the police,” he explained, noting that it took officers about 30 minutes to free him.
Spain and Portugal share a highly integrated energy network that operates as an “energy island,” connected to the rest of Europe by only a small number of cross-border interconnections with France.
Conclave to choose pope Francis’ successor could begin in early may
Spain’s PM calls for calm and patience amid ongoing blackout
Madrid carries out 286 elevator rescues amid massive blackout
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