Faced with excess inventory and greedy shoppers, retailers are selling Black Friday bargains

High inflation means Canadians are counting way more than usual this year, making it harder than ever for retailers to convince them to splurge this holiday season.

Friday marks the unofficial start of the holiday shopping season, as American-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 against a background of consumers 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 they are frugal, they are stingy this year and they are not going to buy unless it is on sale.”

Lots of excess product

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

In the early days of the pandemic, retailers struggled with supply chain issues leading to empty shelves in many product categories. But Winder says the pendulum has now swung the other way, as many retailers have to move much more inventory than they normally would at this time of year, prompting them to write it down deeper and earlier than usual.

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

Elliot Morris, leader in grocery and consumer packaged goods at EY Canada, says retailers are caught between two stools. “As the economy slows, there are areas of inventory that have clearly built up at retailers,” he said. “As we get through the balance of the holiday season, if that stock stays on the shelves… you’re going to see bigger discounts.”

Retailers themselves are well aware that customers are pickier than ever this year, forcing some new names to join the Black Friday game.

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

Melissa Austria runs GotStyle, a unisex clothing store in Toronto. She doesn’t normally have a general sale this time of year, but today her store is offering a number of suits and sports jackets at 50 percent off.

“We find ourselves needing 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 an expensive item definitely puts the brakes on a bit.”

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

“I think everyone is worried about a slowing economy, but it seems consumers are still spending money, they’re just spending more wisely,” she told CBC News in an interview.

Pradheepa Simonpillai was shopping for Christmas presents 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 this holiday season than she normally would, even with a young child to care for.

“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 go shopping on Friday precisely because he thinks there are deals to be had.

“You just have to make different decisions [but] I’m still going to get some presents for the kids and things like that,” he said.

Annie Titheridge also plans to brave the crowds this year, as 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 for 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 catches my eye, what can I do?”

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