Did you splurge on Black Friday this year?
The answer may depend on your income.
In a departure from long-held norms, this year’s holiday spending patterns so far have been largely driven by household income, according to new data provided to The Washington Post by Consumer Edge, which tracks transactions from more than 100 million credit and debit cards.
The wealthiest households, with incomes over $150,000, spent 3 percent more between Black Friday and Cyber Monday than they did a year ago. Shoppers with household incomes less than $40,000, meanwhile, pulled back, spending 2 percent less than they did in the same period last year.
Last year, the opposite was true: Spending by lower-income families picked up at a faster rate than other income groups. But this year, stubbornly high prices have left many of these families sitting out the unofficial shopping holiday altogether.
“This year looks different from the rest: No matter how you look at it, uneven economic conditions are shaping peoples’ spending,” said Michael Gunther, head of insights at Consumer Edge.
The day after Thanksgiving, commonly called Black Friday, is one of the biggest shopping days of the year and sets the tone for the rest of the holiday season. Retailers tend to kick off their deepest discounts that day and keep the deals going through the weekend into Cyber Monday. For shoppers, the four-day stretch of sales has become synonymous with snagging a good deal.
In the past, economists said, lower-income families were as likely — if not more — to participate in early holiday sales to buy gifts and replenish household necessities. This year, though, it appears that many families are so strapped for cash that stocking up wasn’t an option at all.
“The consumer bifurcation we’ve been seeing appears to be getting even more acute,” said Shannon Grein, an economist at Wells Fargo. “Overall, it’s turning out to be a decent holiday season — not a blowout year, but not the consumer completely going into hiding, either. But when you look closer, you see that the middle- to lower-income segment is struggling more than usual.”
The widening spending split reflects a larger divide across the economy. Lower- and middle-income Americans have been hard hit by rising costs for utilities, food and housing, which are making it tougher to afford the basics. They are increasingly falling behind on credit cards and car loans and are pulling back on spending as a result. Meanwhile, wealthier Americans have continued to spend lavishly, boosted by rising home values, stock market gains and outsize income growth.
For the first time, the top 10 percent of Americans account for nearly half of all spending, up from about 35 percent in the early 1990s, according to Moody Analytics.
That dynamic has been particularly pronounced this holiday season, as retailers turn to deep discounts to win over customers. For the wealthy, the weekend after Thanksgiving has become synonymous with scoring luxuries like wine fridges, massage guns and outdoor fire pits at deep discounts. But for much of the country, those deals feel as out of reach as ever, as people struggle to keep up with everyday bills.
Overall, holiday sales are expected to grow about 4 percent this year, slightly less than last year’s 4.3 percent increase and a notable slowdown from 13 percent growth in 2021, according to the National Retail Federation.
Kaylee Crump loved Black Friday as a child. But this year, for the first time, she opted out of the hoopla altogether.
“I didn’t do a lick of Black Friday shopping this year, absolutely nothing,” said Crump, 24, a college student in Charlotte. “I didn’t step foot in a store, I didn’t search online. I stayed away from it all.”
Crump and her fiancé, a photographer, will make about $55,000 this year. And although that’s considerably more than they brought in last year, she says it’s been tough to make ends meet. The few gifts she does buy, she said, will be from local artists: sugar scrub for her grandmother, beard oil for an uncle.
“I feel the brokest I’ve ever been, even though we’re making more money,” she said. “My whole family is kind of feeling the impacts of the economy this year — my dad is a government employee who was furloughed with the shutdown, so Christmas is going to be small.”
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