Recent data from Nordea's card payments indicate a more conservative spending pattern by consumers during the early winter sales season, including Black Friday, compared to the previous year. While online shopping continued to grow, overall expenditure during this discount period was notably lower, suggesting a quieter upcoming holiday season.
According to Nordea’s latest data analysis, the extended Black Friday week, now popularly known as Black Week, saw a decrease in overall spending compared to last year.
Despite the expansion of Black Friday into a week-long event, the majority of purchases still concentrated on the Friday itself. Online shopping, however, maintained its growth trend from previous years.
Nordea's analyst Olli Malinen observes, “The rise in prices and interest rates has eroded consumer purchasing power, which explains the more subdued spending in the sales this year. Additionally, with the increase in prices, the same amount of money buys fewer goods and services than before.”
Specifically, the sports equipment sector experienced a significant drop in spending. The amount of money spent in general merchandise stores, including clothing and shoe stores, electronics and home appliance outlets, as well as furniture stores, also fell compared to last year. However, expenditure in services like restaurants, hair salons, and cultural activities remained close to last year's levels, although the same budget now yields less due to price increases.
Malinen suggests, “The modest consumption during Black Week likely points to a quieter Christmas season ahead. Overall, consumer spending has been more restrained since the beginning of the year.”
This trend in consumer behavior indicates a cautious approach to spending amidst economic pressures. With less discretionary income available, consumers appear to be prioritizing essential purchases, possibly impacting retail sectors traditionally reliant on the holiday season for a significant portion of their annual sales. The data serves as a barometer for retailers and economists alike in understanding the current consumer climate and its potential implications for the broader economy.