Prices of Black Friday products in the United States will increase: up to 17%!

Every year, Black Friday is a carnival for consumers. For sellers, the end-of-year holiday is also a time to boost profits and sales, so a large number of promotions and discounts will be launched during the holiday . But in this special year, from raw materials to shipping costs, prices are rising all the way. Can sellers still hold big promotions like in previous years?

According to a new study by international insurance company Euler Hermes, prices of categories such as toys, clothing, home appliances, furniture, computers, sporting goods and TVs will face 5% to 17% increases during Black Friday in the United States this year compared to 2020.

For more than a year, American consumers have been experiencing an unusually high demand for popular consumer goods such as toys, computers, furniture or home appliances. Restrictions on offline consumption during the epidemic , coupled with a series of subsidies from the US government , have increased the savings of American households, all of which have created conditions for consumers to spend heavily at the end of the year .

But at the same time , the supply chain has suffered some temporary disruptions, including the shutdown of Asian factories (especially Vietnam) due to the epidemic , domestic power restrictions and the resulting production stagnation , coupled with recent port congestion and logistics delays, resulting in commodity shortages and an imbalance between supply and demand .

Euler   Hermes analyzed inventory-to-sales ratios for key discretionary retail sectors and concluded that U.S. retailers are now operating with inventory levels well below their 10-year average , with non-essential items currently having a $41 billion inventory shortfall .

To make matters worse, Black Friday 2021 comes at a time when prices are rising in the U.S. economy: In October , U.S. consumer inflation rose 6.2% year-on-year, the highest level since 1990. For retailers, with rising costs weighing on profits and no extra inventory, there is little incentive to offer deep discounts on products. Even if discounts are offered, they are limited to products that have previously been marked up too much .

Taking into account the influence of various factors , Euler   Hermes experts believe that during this year's Black Friday , the average price of toys will increase by 5%, clothing by 10%, home appliances by 12%, furniture by 14%, computers and sporting goods by 16%, and televisions by 17%.

Sellers are also conflicted about whether to raise prices. They see that others’ orders increase after raising prices, but after raising their own prices, they find that their orders decline. Some sellers said that they would only raise prices when orders explode or rankings reach an absolute high, and those with inventory backlogs dare not raise prices at all. Sellers who want to raise prices should still pay attention to various data and make changes in a timely manner.

Black Friday

Price increase

USA