Because the nation’s retailers prepare for upcoming Black Friday and Cyber Monday sales, they expect their holiday revenues to grow moderately over last yr. The National Retail Federation has forecast a 6% to eight% increase to $942.6-$960.4 billion in sales. This growth would follow last yr’s surge of 13.5% that occurred as pandemic-weary consumers eagerly returned to malls and shopping centers. While inflation is anticipated to limit holiday spending this yr, it’s being offset by job growth, rising wages, and amassed savings, in line with the Retail Federation. The shopping binge also can be a crunch time for 1000’s of lower-wage retail and warehouse employees within the Inland Empire.
Here, we asked UC Riverside business professor Subramanian Balachander, UCR’s Center for Economic Forecasting and Development Director Christopher Thornberg, sociology professor Ellen Reese, and history professor Catherine Gudis to debate issues pertaining to holiday season shopping.
How will our high inflation rates affect Black Friday sale prices? Will consumers get a long-awaited break in pricing?
Balachander: Pricing is generally driven by the willingness of consumers to pay. In a supply-constrained environment, retailers are usually not prone to offer significant discounts, knowing that they’ll get away with higher prices due to an imbalance in favor of supply and since of consumer acceptance of upper prices.
Thornberg: Consumers are pushing inflation and that’s because they (the federal government) fire-hosed an insane amount of unnecessary money into the economy through the course of the pandemic. They functionally overheated consumer demand and consumer demand stays overheated. My favorite statistic immediately is that, prior to the pandemic, all American households were holding on to lower than a trillion dollars. That is money sitting in checking and savings accounts — just money readily available. At once, that number is 4.6 trillion. . . You hear the moaning and groaning. That is just sticker shock. That is people going, “Hey, that price is higher than it was last yr.” And no person’s acknowledging the opposite side of it, which is, you are buying it anyway.
Have high prices contributed to a surplus of in store inventories that retailers will need to unload on Black Friday and thus bring down prices?
Balachander: There may be anecdotal evidence that the change from a pandemic to a COVID-endemic environment and increased return to normalcy has modified the sort of products demanded by consumers. Consequently, retailer inventories could also be high for the mistaken products but not for in-demand products.
Thornberg: There is no doubt that there are excess inventories on the market. For instance, Goal and Walmart were acting like nobody was ever going to depart their bedrooms again and we were all going to work from home. And lo and behold, people got over the pandemic and went back to living their lives. . . Should you’re out there for pajamas this yr, you are going to get some good deals. Should you’re out there to purchase your wife, in your twenty fifth Christmas together, that wonderful Lexus with a giant bow, good luck to you. You’ll never get it in time for Christmas. There’s still no inventory for cars… It is best to see the numbers on computer equipment. They’re through the roof immediately. They simply can’t produce enough.
Because the pandemic winds down, will brick-and-mortar retailers have a bonus over online retailers?
Balachander: Yes, brick-and-mortal retailers will develop into relatively more relevant with the winding down of the pandemic. There may be also an overall trend, particularly amongst larger online retailers, toward bricks and clicks, whereby they’re supplementing their online presence with a brick-and-mortar presence.
Thornberg: We understand there’s a worth to the physical retail experience. That hasn’t modified. And it’s only logical that that can play some role on this consumer chain at some level, but people aren’t going to back off buying stuff online. The typical household had 166 packages delivered in 2021. That is just the way you do it.
Are price-wary consumers expected to dampen the hopes of shops?
Balachander: Consumers on the very end of the income scale are prone to have develop into somewhat price-wary but all consumers are also faced with some lingering supply issues.
Thornberg: The one reason you’ll see prices coming down through the holiday season is that if sellers thought that consumer demand was going to slow. And it is not. I anticipate this to be a pleasant frothy Christmas for retailers.
What’s going to Black Friday and Cyber Monday mean for the 1000’s of Inland Empire residents who work in Amazon success centers and other warehouses that house our retail goods?
Balachander: It’ll be a busy time for warehouse employees.
Thornberg: The largest problem business has immediately just isn’t an absence of demand. It’s an absence of employees. (Thornberg added retail and warehouse employees will profit from higher wages, though many are making about $16 an hour.) Earnings amongst lower paid, lower expert positions are rising faster than they’re for highly paid, highly expert positions immediately.
Reese: Black Friday and Cyber Monday produce a surge in demand for goods purchased through Amazon for home delivery. Previous analyses of Occupational Safety and Health Administration data have shown that workplace injuries are likely to increase amongst Amazon warehouse employees during such periods as a lot of these employees, who’re poorly paid, are engaged in physically grueling work, working long hours and extra time, and pushed to work quickly, often under electronic surveillance, to fulfill unreasonable work quotas or be terminated.
Gudis: For individuals who work at jobs in warehouses and distribution centers, we will expect that their hourly salaries haven’t kept up with inflation, and that the prices of survival, when it comes to increased expenditures for rent and food, may limit their very own Black Friday consumption patterns and that of other working people. We’d expect to see the Inland Empire—as we’ve got in the previous few a long time—proceed to operate as an area where goods flow swiftly through the region, but profits don’t necessarily settle into the homes and pocketbooks of residents or the municipalities which have helped transform the region right into a hub for the distribution economy. In other words, Amazon and Walmart might profit, but will those working of their distribution centers or retail stores (also profit)?
Retailers and warehouse operators reportedly are having trouble finding enough employees to get through the vacation season. What can these employers do to make these jobs more attractive and equitable?
Thornberg: You may pay employees more. Labor shortages were happening before the pandemic. It’s called demographics. Boomers are retiring. They did not have enough kids. Now, we haven’t got enough employees. It was way back under the Reagan generation that our immigration system got permanently distorted. So, here we sit today without enough people.
Reese: Retail employers and warehouse operators who seek to make their jobs more attractive should provide living wages, good advantages, and workplace safety, and respect employees’ right to arrange, form unions, and take motion in order that they’ll have a greater voice at work. Specifically, Amazon should address the demands of the Inland Empire Amazon Staff United for a $5 per hour wage increase, greater workplace safety, and an end to employer retaliation against labor activists (#IEAmazonWorkers).
Gudis: For one, seasonal warehouse employment is usually without advantages or a path of upward mobility. So most of the students in my undergraduate classes work in warehouses, and move from one job to the opposite, chasing the subsequent 50-cent hourly boost, especially through the holiday season. But once they graduate and wish to remain in Riverside or San Bernardino Counties, do their options change? Can we construct more diverse pathways to employment beyond warehouses, and beyond the technologies of logistics, especially within the face of Amazon’s recent and unprecedented layoffs of 10,000 corporate and tech jobs?* What might renewable, sustainable, and diverse job growth appear to be, beyond the temporary and remarkably wasteful gains of Black Fridays and Cyber Mondays? These manufactured shopping holidays hit the worst notes when it comes to inequities, gross patterns of waste, and exploitation of each resources and labor, not to say the opposite environmental impacts of the worldwide supply chain.
* https://www.nytimes.com/2022/11/14/technology/amazon-layoffs.html
