Did inflation affect money spending for Holidays?

It looks like inflation is creeping into the European Holiday spirit

It’s not all holly-jolly for European retailers this festive season. We are heading towards Christmas and just after Black Friday sales, and it seems like it’s not meeting their expectations.

A survey of 400 businesses by Germany’s HDE retailers’ association showed just over half of merchants said they were still dissatisfied with sales last week, versus some 30% who were satisfied.

Shoppers, hit by double-digit inflation and soaring energy bills, are cutting back on spending. Black Friday has provided some relief but the Christmas season could be the worst in at least a decade.

In the Netherlands, data from credit card transactions and online shops showed strong year-on-year growth for the Black Friday week.

Numbers in Holland are up 12% and spending up to 30% for the week, according to data from International Card Services. The most purchased things were at department stores, for shoes and clothing, and food and drinks.

As for Italy, data offered a mixed picture. According to the trade body, Italian fashion sales were down by 10-15% compared to the last year. However, the Italian retailer’s association said sales across the last week were up by more than 10%, which leaves us with average spending of 150-160 euros per shopper.

German sales are expected to be down by 4% in terms of the year-earlier period.?

American ignorance or consumerism?

Despite inflation – and in many cases because of it – the Black Friday spectacle is at an all-time high.

American consumer culture couldn’t resist enticing deals this week. Thanksgiving in the U.S. was followed by Black Friday and Cyber Monday and despite an increase in inflation from last November is hitting the record books.

According to Adobe Analytics, Black Friday sales saw a record $9.12 billion from online sales, compared to the previous year’s $8.92 billion.

Shoppers are chasing sales even more than in a typical year. “Often in inflationary times, people try to buy as quickly as they can, knowing that things will be more expensive later on,” Lans Perner, associate professor of clinical marketing at USC’s Marshall School of Business, said.

Shoppers are also dipping more into their savings, turning increasingly to “buy now, pay later” services like Afterpay that allow users to pay for items in installments, as well as running up their credit cards at a time when the Federal Reserve is hiking rates to cool the U.S. economy.?

With retailers having more inventory thanks to the pandemic and discounting more to work through it, deals started in October, and despite inflation, consumers seemed resilient.?