President’s Day sales may never be as big as those on Black Friday, but this year, consumers may score some very good deals as some retailers try to entice shoppers to buy their overstocked items.
President’s Day is Monday, but sales have already started. According to analysts, many of this year’s deals are looking better than last year’s, especially on big-ticket items that retailers are flush with because cash-strapped consumers may have held off purchasing them.
Most “retailers look more promotional” this President’s Day weekend, “which we believe is a reflection of consumer malaise,” said Jonathan Matuszewski, analyst at investment bank Jefferies in an investor’s note.
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Where are the biggest President’s Day sales?
After grappling with a year of high inflation that ate the wage gains many Americans made when they changed jobs, consumers ditched big-ticket purchases for everyday necessities. That means the biggest discounts will be on those pricier items because – well – that’s what’s mostly left. These include:
- Mattresses: Serta Simmons Bedding brands appear to be discounted slightly more year over year than Tempur Sealy, Matuszewski said. Direct-to-consumer brands like Brooklyn Bedding, Casper, Purple, Saatva, and Nectar are also discounting more than last year to entice consumers to buy a big-ticket item despite a weakening economy, he said.
- Consumer electronics: Promotions continue to rise overall, but Matuszewski notes Best Buy’s sale “mainly targets big ticket home appliances rather than TVs, computers, phones, etc.”
- Home improvement: Home centers’ sales are better than last year with consumers still interested in projects, but promotions are focused on major appliances, which is “unsurprising given the categories’ big-ticket nature,” Matuszewski said.
- Mid-tier furniture: More discounts here compared to premium furniture is “a reflection of household balance sheets for middle income consumers increasingly stretched,” Matuszewski said. At Wayfair and Overstock, he noted the biggest bargains will be in products like rugs and kitchen appliances, which are struggling to draw buyers.
- Cookware: Williams Sonoma and Caraway Home are offering deeper discounts this year to drum up interest as kitchen accessory demand continues to soften.
- Clothing: Select brands continue to have inventory problems and will likely have to keep aggressively cutting prices. For example, Under Armour’s inventory levels are up by around 50%, to $1.2 billion, from last year, which means it “will need to work harder – and take more of a financial hit – to clear down stock,” said Neil Saunders, managing director of research firm GlobalData in a research note.
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Why do retailers still have so much stock?
Last year, merchandise delayed by supply chain disruptions arrived just as Americans were hit with four-decade high inflation, forcing them to curb spending. That left retailers with overflowing merchandise before year-end holidays.
Retailers heavily discounted to move merchandise, but a cold snap around Christmas, airline snarls and stretched budgets froze some spending, and holiday sales fell below forecasts. Sales during November and December grew 5.3% year-over-year to $936.3 billion, missing the National Retail Federation trade group’s prediction of 6% to 8% growth.
Consumer spending rebounded a bit in January as sales continued, but some retailers still have more inventory than they want to hold. To get inflation-squeezed consumers, now also facing a possible recession, to open their wallets further , retailers will have to lure them with mega discounts, analysts say.
And this may be their last big chance to grab shoppers for a while.
“While you can find some sales in March and April, the next quality promotions likely won’t occur until Memorial Day” at the end of May, according to DealNews.com.
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
