Spending is likely to be up this Black Friday despite yesterday's record OCR hike. [Source: NZ Herald]
Black Friday spending may be “counterintuitive” this year as an economic recession looms, according to some experts.
This year’s Black Friday sales are expected to create more buzz for shoppers than in previous years, despite yesterday’s announcement of a 75-point hike in the official cash rate and a recession predicted to strike mid-2023.
Retail First Managing Director Chris Wilkinson said people are still “looking for savings wherever they can get them”.
“It’s almost counterintuitive because we’re facing a very challenging time for people economically but there’s more hype and marketing now than ever before around Black Friday.”
He said purchases are more likely to be emotionally driven after a difficult 2022.
“People are still facing the situation of wanting to feel good. It has not been a good year for the consumer, so people are looking for feel-good purchases.”
Traditionally observed in the US on the Friday following Thanksgiving Day (the third Thursday of November), Black Friday has quickly become “Black Friday Week” for some retailers in Aotearoa.
Wilkinson said the sale hasn’t had the same impact here in the last few years because businesses didn’t have the same product supply, and retailers performed well in online sales so they didn’t have the incentive to discount their prices.
Auckland Central Budgeting Consultants general manager Tim Maurice advises consumers to “start planning now and spending less”.
“The OCR and interest rates are up so people need to do stress-testing now. Plan to see how your spending will impact in March next year.
Maurice said the budgeting service had noted the rise of second-tier lenders and Buy-Now-Pay-Later schemes.
“It’s not worth being in debt for the next 12 months or three years for something you don’t need,” he said.
Helping people ”know the difference between needs and wants-spending” is the key to managing budgets this season, Maurice said.
Consumer NZ has advised the public about Black Friday spending, giving warnings about discount prices (which have been over-inflated in the past), buy-now-pay-later schemes, and pressure tactics from retailers.
Research by PriceSpy has shown Kiwis plan to spend over $700 on average this Black Friday, up from $464.50 in planned spending in 2020.