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
Iranian leader warns foreign powers have “no place” in Strait of Hormuz
Iran’s Supreme Leader, Mojtaba Khamenei, said Thursday that the Persian Gulf is entering a new era marked by a “bright” future without the presence of the United States in the region.
His remarks came during the commemoration of Persian Gulf Day, amid ongoing regional tensions following recent military confrontations involving Iran, the United States, and Israel.
“Today, two months after the largest military buildup and aggression by the bullies of the world in the region and the humiliating defeat of the United States, a new chapter is being written for the Persian Gulf and the Strait of Hormuz,” Khamenei stated.
The Iranian leader insisted that the future of the region would be free from American influence and focused instead on the internal development and prosperity of Gulf nations.
“By the power and strength of God, the bright future of the Persian Gulf region will be a future without the United States and dedicated to the progress, welfare, and prosperity of its nations,” he said.
Khamenei also questioned the effectiveness of U.S. military bases in the region, arguing that they do not provide security even for Washington’s allies.
“Foreigners who come from thousands of miles away and commit evil and malicious acts have no place there except at the bottom of its waters,” he declared.
In addition, the Iranian leader defended new measures being prepared by Tehran to regulate maritime traffic through the Strait of Hormuz, including fees for vessels passing through the strategic waterway. According to Khamenei, the policies would generate economic benefits and greater stability for the region.
Regional tensions remain high following the conflict that erupted on February 28 between the United States and Israel against Iran, leading to strategic blockades in the Strait of Hormuz, a route through which nearly 20% of the world’s oil supply previously passed. The situation has disrupted maritime trade and contributed to rising global oil prices.
Central America
U.S. and Regional Allies Back Panama Amid Dispute With China
The United States, Bolivia, Costa Rica, Guyana, Paraguay and Trinidad and Tobago issued a joint statement in support of Panama’s sovereignty, arguing that China’s recent actions represent an attempt to politicize maritime trade and undermine the sovereignty of nations in the hemisphere.
“We are closely monitoring China’s selective economic pressure and recent actions affecting vessels flying the Panamanian flag,” the statement released Tuesday said. “Panama is a pillar of our maritime trading system and, as such, must remain free from undue external pressure.”
The statement comes amid growing tensions surrounding the Panama Canal and the operation of key ports linked to global trade.
At the end of January, Panama’s Supreme Court invalidated the legal framework supporting the 1997 concession that granted Panama Ports Company, a subsidiary of CK Hutchison, the right to operate the Balboa and Cristóbal terminals located on the Pacific and Atlantic entrances of the Panama Canal.
The ruling followed mounting pressure from the United States to curb Chinese influence around the strategic waterway, through which roughly 5% of global maritime trade passes.
CK Hutchison, which managed the ports for nearly three decades, rejected the court’s decision and accused Panamanian authorities of illegally confiscating its assets. The company has launched international arbitration proceedings against Panama, seeking more than $2 billion in damages.
Following the court ruling, reports emerged of increased detentions and inspections of Panamanian-flagged vessels in China, actions widely viewed as retaliatory measures.
On Wednesday, China’s Foreign Ministry dismissed the joint statement as “completely unfounded and misleading,” accusing the United States of politicizing port operations and warning that Beijing would take steps to protect its interests in Panama.
International
King Charles III Says U.S.-UK Alliance Is “Irreplaceable and Unbreakable”
King Charles III of the United Kingdom reaffirmed the strength of the British-American relationship on Tuesday during a speech before the United States Congress, describing the alliance between the two nations as “irreplaceable and unbreakable.”
The address, delivered at the Capitol, marked the first speech by a British monarch before Congress since Queen Elizabeth II in 1991 and comes at a time of political tensions between Donald Trump’s administration and the Labour government of Prime Minister Keir Starmer.
“As President Trump himself observed during his state visit to Britain last autumn, the bond of kinship and identity between the United States and the United Kingdom is invaluable and eternal. It is irreplaceable and unbreakable,” the king said.
While reflecting on the upcoming 250th anniversary of U.S. independence, which will be commemorated this year, Charles III stated that the partnership between the two countries “was born out of disagreement, but is no less strong because of it.”
The monarch emphasized the democratic values shared by both nations and noted that major global changes have occurred whenever the two allies found common ground.
“When we have found that way to agree, great changes have taken place not only for the benefit of our peoples, but for all peoples,” he said.
King Charles also quoted British Prime Minister Keir Starmer, who recently described the relationship as “an indispensable alliance.”
Concluding his speech, the monarch described the shared history of the United States and the United Kingdom as “a story of reconciliation, renewal, and an extraordinary partnership.”
He added that Washington and London have forged “one of the most consequential alliances in human history.”
“I pray with all my heart that our alliance continues to defend our shared values, together with our partners in Europe, the Commonwealth, and around the world, and that we ignore calls urging us to become increasingly isolationist,” Charles III stated.
The king ended by urging both nations to “recommit to one another in selfless service to our peoples and to all peoples of the world.”
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