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Inflation clouds ‘Black Friday’ kickoff of US holiday shopping season

| PAr AFP | John Biers |

US retailers unveiled a trove of fresh 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 deals and early store openings.

Traffic was steady at Macy’s flagship store in midtown Manhattan, where crowds braved drizzly, chilly weather to survey the mammoth department store and take in holiday windows that feature a Santa surrounded by disco balls and fox family of stuffed animals clad in plaid.

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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 holiday imports this year, leaving it vulnerable to oversupply at a time when consumers are cutting back.

“Today’s problem is having too much stuff,” said Neil Saunders, managing director for consultancy GlobalData Retail.

Saunders said retailers have made progress in reducing excess inventories, but oversupply will mean deep discounts in many categories, including electronics and apparel.

“This is a holiday season where retailers are going to have to work very hard for very small gains,” he said.

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The dynamic has created opportunities for savvy shoppers like Carla Forbes, who began scouring for holiday discounts weeks ago. She nabbed a jacket Friday at Macy’s for $79, down from an original price of $225.

While promotions on watches and jewelry have got “better,” she noted that such deals are not available for staples like food, for which prices have soared.

“You just have to buy it if you want (it),” Forbes said.

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 expects an overall holiday sales increase of 2.5 percent, less than a third of last year’s level. Besides inflation, Adobe cited higher Federal Reserve interest rates and an uptick in brick-and-mortar shopping as factors.

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Consumers spent  $7.28 billion up through 6:00 pm Eastern time (2300 GMT) for Black Friday, according to Adobe. The company anticipates that when the final tally is in, consumers will spend between $9 billion and $9.2 billion for the day, setting a new record for online sales on Black Friday.

Countries like Britain and France have been marking Black Friday too, but with soaring inflation, merchants there face a similar dilemma.

“The worry is that it could turn out to be more of a Bleak Friday,” said Hargreaves Lansdown analyst Susannah Streeter.

Anne Campbell, who was visiting New York from Scotland, said the mood felt very different from home, where worries about energy security and a weakening economy dominated.

“Things are very tight in the UK for a lot of people,” she said, contrasting this with spending in the US.

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US shoppers have remained resilient throughout the pandemic, often spending more than expected even when consumer sentiment surveys suggested gloominess.

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 Fed data and anecdotally described by chains that report more purchases made with food stamps.

Mixed picture

Recent earnings reports from retailers paint a mixed picture on consumer health.

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Target stood on the downcast side, pointing to a sharp decline in shopping activity in late October, potentially portending a weak holiday season.

“We’ve had a consumer who has been dealing with very stubborn inflation for quarter after quarter now,” Chief Executive Brian Cornell told a conference call with analysts.

He added that customers are “shopping very carefully on a budget.”

But Lowe’s, another US chain specializing in home-improvement, described the same late-October period as “strong.”

Friday’s crowds in New York were more robust compared with a year ago, said shopper Marvin Thomas, who also ventured out for Black Friday in 2021.

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Inflation is a “big problem,” he told AFP, catching his breath outdoors after finding a deal on a hat at Foot Locker.

“I’m not going to deny that it has affected me, but you gotta do what you gotta do.”

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International

Ecuador declares state of emergency in five provinces to combat organized crime

The Ecuadorian government has declared a state of exception in the provinces of El Oro, Guayas, Los Ríos, Manabí, and Santa Elena for 60 days to combat organized armed groups amid escalating hostilities, according to Executive Decree 250 published on Tuesday.

The Armed Forces and National Police are jointly working to “maintain sovereignty and the integrity of the state.”

With this measure, the right to inviolability of the home has been suspended, meaning security authorities are permitted to conduct inspections, raids, and searches on properties where they believe members associated with armed groups may be hiding.

Authorities will also seize “materials or instruments” that could be used to commit crimes to neutralize threats.

In response to the criminal activity in the territory, the government will also establish an Anti-Criminal Investigation Force in the coming days aimed at reducing intentional homicides.

The national director of Crimes Against Life, Violent Deaths, Disappearances, Extortion, and Kidnapping of the National Police (Dinased), Freddy Sarzosa, noted that the main cause of criminal violence is linked to drug and arms trafficking.

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International

Argentine president criticizes spanish PM amidst political row

Argentine President Javier Milei sharply criticized Spanish Prime Minister Pedro Sánchez, suggesting he “has more significant issues to address,” in response to comments made by Spain’s Minister of Transport, Óscar Puente, on Friday.

“The government of Pedro Sánchez has more significant issues to deal with, such as the corruption allegations against his wife, a matter that even led him to consider resignation,” stated Argentine President Javier Milei.

In this regard, the Argentine leader expressed his expectation that the judiciary would act “swiftly” in this corruption case, which he mentioned “affects the stability” of Spain and relations between the two nations.

Moreover, Milei accused Spanish Prime Minister Pedro Sánchez of “endangering” the unity of Spain by “negotiating with separatists,” harming women by “allowing illegal immigration of those who threaten their physical integrity,” and damaging the middle class through “socialist policies that only bring poverty and death.”

The Argentine presidency issued these statements in response to remarks from Spain’s Minister of Transport and Mobility, Óscar Puente, who accused Milei of “substance ingestion,” which the Argentine presidency labeled as “slander and libel.”

“I saw Milei on TV and, hearing him, I couldn’t tell in what state he was in, before or after the ingestion of whatever substances, and he came out to say that and I thought, it’s impossible that he wins the elections, he’s dug his own grave, but no,” Puente declared at a colloquium on communication and social media held this Friday in Salamanca.

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International

The death toll of the devastating floods in Kenya amounts to 210

The death toll from the devastating floods caused by the torrential rains that hit Kenya since mid-March amounted to 210, while about 165,500 people have been displaced, the Kenyan Ministry of the Interior reported on Friday.

The total death toll increased after 22 more deaths were confirmed in the last 24 hours, the Ministry said in a statement collected by local media.

Likewise, the injured and missing remain at 125 and 90, respectively, and a total of 196,000 have been affected by the floods throughout the country, immersed in the long rainy season, which has especially hit the center, south and west of its territory.

To respond to this crisis, the Ministry said, the Kenyan authorities have created at least 115 camps distributed in 19 of the 47 counties of Kenya, where more than 27,500 people have taken refuge.

The Government published these data after the Kenyan Minister of the Interior, Kithure Kindiki, urged on Thursday to move all Kenyans who reside in areas vulnerable to landslides or near dams and rivers.

In a message published on social network X late on Thursday, Kindiki pointed out that all neighbors in those areas are “ordered” to “leave these areas immediately” in the next 24 hours, before a “mandatory evacuation” is launched.

“The Government has adopted adequate measures to provide temporary accommodation, as well as essential food and non-food supplies to all those who will be affected by the eviction,” the minister said.

The truth is, however, that, according to the Human Rights Watch (HRW) organization, the Government of Kenya did not act in time or respond adequately to the serious floods, despite the weather predictions it had.

In a statement released on Thursday, the NGO warned that the destruction caused by the rains “has exacerbated socioeconomic vulnerabilities” by more severely hitting the poor population, rural residents, the elderly and people with disabilities.

In the same vein, a report by the National Drought Management Authority (NDMA) published on Tuesday pointed out that the storms have aggravated the lack of food in Kenya to the point that about two million Kenyans need food aid.

Severe storms will last at least until next week, and the rains will continue to be intense during this month, according to the prediction of the Department of Meteorology of Kenya.

In recent years, the long rainy season, which runs from March to May and also affects other countries in East Africa, has been intensified by the El Niño weather phenomenon, a change in atmospheric dynamics caused by the increase in the temperature of the Pacific Ocean.

The west, center and south of the country – including the capital, Nairobi – have so far taken the worst part, and the overflow of a river on Monday especially hit Nakuru County, where at least 71 people died as a result of the tragedy.

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