Why Higher Prices Will Linger Beyond Black Friday

why higher prices will linger beyond black friday

Sumary of Why Higher Prices Will Linger Beyond Black Friday:

  • Jeenah Moon/Getty Images Consumers are already paying more for goods thanks to rising inflation, so they won’t feel sticker shock when Black Friday shopping begins.
  • Gap (GPS) on Wednesday cited “acute supply-chain headwinds,” and said its efforts to mitigate the impact, such as using airfreight to transport goods, added to its expenses and further squeezed profits.
  • ” Whether you’ll open your wallet a bit wider depends on the category of retailer.
  • Macy’s stock declined 4% on Wednesday to $32.14. Kohl’s was down about 2% to $55.32. Dollar Tree (DLTR), which sells the majority of its products—including toys, home decor, kitchenware, and seasonal goods—for $1, said it’s raising prices to $1.25 by the start of 2022. The stock was up 1.3% on Wednesday.
  • On the other hand, “general merchandise retailers, such as Amazon, Walmart, and Target appear to be absorbing some cost inflation to win loyalty with customers,” says Greg Melich, an analyst at Evercore ISI.
  • Yet even with their size and resources, both Target (TGT) and Walmart (WMT) had lower gross margins in the third-quarter due to investments to mitigate supply-chain challenges and labor shortages.
  • Consumers are flush with savings, steady income from new jobs and pent-up demand.
  • U.S. retail sales came in stronger than expected in October, a sign that consumers are still willing to spend despite rising inflation.

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