Black Friday discounts deeper than usual as retailers deal with excess inventory and inflation-weary shoppers

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High inflation has Canadians counting their pennies far more than usual this year, making it harder than ever for retailers to convince them to spend this holiday season.

Friday marks the unofficial start of the Christmas shopping season, as US-style Black Friday sales are now firmly established in Canada as well.

The annual spending bonanza is different this year, however, as experts say that while there are more deals than usual, they come on the back of consumers who are more cost-conscious than ever.

“It’s the year of the discount, it really is,” retail consultant Bruce Winder said in an interview. “Consumers have shown that they’re frugal, they’re stingy this year, and they’re not going to buy unless it’s on sale.”

A lot of excess product

Excess inventory levels are a big reason discounts may be deeper than usual this year.

In the early days of the pandemic, retailers struggled with supply chain issues that led to empty shelves in many product categories. But Winder says the pendulum has swung the other way now, as many retailers have far more inventory to move than they normally would at this time of year — pushing them to discount deeper and earlier than they normally would.

“It went from being out of stock to overstocking in some circumstances, but that bodes well for consumers,” Winder said.

Elliot Morris, head of grocery and consumer goods at EY Canada, says retailers are caught between a rock and a hard place. “As the economy slows, there are areas of inventory that are clearly built up at retailers,” he said. “As we get through the rest of the holiday season, you’ll see deeper discounts if inventory continues to sit on the shelves.”

Retailers themselves are very aware that customers are more choosy than ever this year, which is pushing some new names to get into the Black Friday game.

Melissa Austria runs the clothing store GotStyle in Toronto. This year, she plans to offer some discounts during Black Friday sales for price-conscious consumers. (CBC)

Melissa Austria runs GotStyle, a unisex clothing store in Toronto. She doesn’t typically have sales across the board this time of year, but today her store will be offering some suits and sport jackets for 50 percent off.

“We’re noticing that we need to bring in things that are a little bit more price-sensitive for the everyday casual customer who wouldn’t normally shop here,” she told CBC News in an interview. “The more casual customer who wouldn’t normally buy a high-ticket item is definitely putting the brakes on a little bit.”

Michelle Wasylyshen of the Retail Council of Canada says she is optimistic about the outlook this year, but clearly pricing will be the biggest consideration.

“I think everyone has concerns about a slowing economy, but it looks like consumers are still spending, they’re just spending more wisely,” she told CBC News in an interview.

Pradheepa Simonpillai was shopping for Christmas gifts in Toronto when she spoke to CBC News. She says high inflation has made her more cost-conscious than ever. (CBC)

On the streets of Toronto, shopper Pradheepa Simonpillai says she plans to spend less than usual this holiday season, even with a toddler to look after.

“I don’t buy anything unless absolutely necessary,” she said. “I’m going to find really creative ways to not spend money this season.”

Another shopper, Amir Ali, says he plans to be out shopping on Friday precisely because he thinks there will be deals to be had.

“You just have to make different decisions [but] I’ll still get some presents for the kids and stuff,” he said.

Annie Titheridge also plans to brave the crowds this year because she likes to be able to touch and feel products before buying them, something she can’t do with online shopping.

“My husband and daughter think I’m crazy about shopping on Black Friday,” said Titheridge, who will drive from King City north of Toronto to Yorkdale Shopping Center for the day. “But if the deals are good and something jumps out at me, what can I do?”

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