Consumer Alert: Consumers are NOT optimistic so retailers are slashing prices to get you to buy
ROCHESTER, N.Y. — This consumer alert is about this number – 102.5. That’s the consumer confidence index. And that number is way down.
The consumer confidence index comes out every month. The Conference Board surveys 5,000 households. And they want to know how consumers feel about the current economy as well as the future. Consumers’ current assessment of the economy accounts for 40 percent of the number and their feelings about the future is 60 percent.
And inflation, plus high interest rates, is not an equation for optimism. Consumers are worried. The overall confidence index fell from 107.8 in September to 102.5 this month. And how are we feeling about the future? Apparently we’re pretty pessimistic. That number fell to 78.1. Anything below 80 is an indication that a recession is likely in the future because how we feel can become a self-fulfilling prophesy. That’s because when consumers are feeling pessimistic we spend less. Businesses then invest less and employ fewer people. That’s why economists refer to the Consumer Confidence Index as a leading indicator.
So here’s what that means for you as you shop for Christmas. Retailers are working much harder for your dollar. Black Friday is no longer a day; it’s a season. Surveys show that what consumers want this year is value. So major retailers have made announcements that the black Friday sales are starting early this year. And many are borrowing from the Amazon play book.
Let’s start with Target. Every week through black Friday, Target is offering big deals on gift items. New lists come out every Sunday and you have to check the weekly ad. And every day through Christmas Eve, they’ll offer the deal of the day. These are huge deals at a significant discount, and they’ll only be available while supplies last. It sounds like Amazon’s Lightning Deals, a successful tool in getting consumers excited about upcoming sales.
Walmart’s black Friday deals will start on November 7th and run all month long. The new deals will be announced each Monday.
Not to be outdone, Kohl’s is offering crazy deals as well. Deals start on November 4th and last all month. And on the weekends before Thanksgiving, November 11th and 12th as well as the 18th and 19th, Kohl’s is having what it calls Dashing Deal Days. They’re having big sales on everything from clothing to toys to home goods.
So if a recession is in our future, it pays for us to pay cash for Christmas without going into debt. Make retailers work for your money. Find the best deal. Price match, and lay off the plastic. If a recession hits in 2023, you don’t want to be drowning in Christmas debt in a down economy.