You’re paying more for less this shopping season. Now there’s proof
By Matt Egan, CNN
New York (CNN) — Black Friday once again proved that Americans are willing to shop when they spot bargains.
Mastercard reported a steady 4.1% increase in US retail sales on Black Friday and Adobe Analytics said online shopping surged by 9.1%. Salesforce expects Cyber Monday sales to also climb by 4%.
All of that is a pretty solid showing, given the gloom and doom in economic polls, crumbling consumer confidence and mounting frustrations over the cost of living.
However, beneath the surface of those strong headline numbers lies a disturbing trend: Americans are spending more but getting less.
Although overall US online shopping increased 3% on Black Friday, it was driven by a 7% jump in the average selling price, according to Salesforce.
Order volume, which measures how much was bought in a certain time frame, also declined 1% versus Black Friday 2024, Salesforce said.
And shopping carts were smaller on Black Friday, as units per transaction dropped by 2%.
“Consumers are paying more per item than last year, but it’s not stopping them from coming out and spending,” Caila Schwartz, director of consumer insights at Salesforce, told CNN in a phone interview.
Overall, prices during Cyber Week have risen 7% on average, according to Salesforce, higher than the 5% jump last year.
The tariff factor
Salesforce blamed the price hikes at least in part on historic tariff hikes.
The Trump administration has spiked tariffs on US imports to the highest level since 1935, according to The Budget Lab at Yale.
While it’s difficult to definitively attribute how much of the price hikes are linked to tariffs, some of the categories experiencing the biggest price increases are exposed to tariffs.
For instance, online average selling prices on home goods (furniture, appliances, dining, art & decor) spiked 24% on Black Friday, according to Salesforce.
President Donald Trump slapped tariffs on some types of furniture in October, as well as on countries where America imports furniture from, such as Vietnam, Indonesia and India.
Salesforce said online prices also jumped by 6% on clothes and 7% on electronics — two categories of products that America heavily imports.
Trump warned earlier this year that tariffs could mean Americans get less stuff.
“All I’m saying is that a young lady, a 10-year-old girl, 9-year-old girl, 15-year-old girl, doesn’t need 37 dolls,” Trump said in May.
Salesforce didn’t break down how much prices went up or down for toys, the majority of which the US imports from China.
Another factor that could be driving up prices: Consumers are leaning into higher-priced categories such as luxury and home goods, according to Schwartz.
Lower-income Americans cutting back?
Of course, the Black Friday sales results don’t reveal a key piece of information: who is doing all that shopping.
The rise of a K-shaped economy has meant that while many higher-income consumers are shopping aggressively, some less affluent Americans are cutting back as they grapple with the high cost of living and rising unemployment.
Before the holiday shopping season got underway, lower-income Americans signaled plans they would do some significant belt-tightening.
According to Gallup, Americans in households earning less than $50,000 planned to spend $651 on holiday gifts, down from $776 last year.
Even middle-income Americans planned to cut back spending to $847, down from $902 last year. By contrast, high-income consumers planned to ramp up holiday spending to $1,479, up modestly from $1,403 last year.
Cyber Monday deals
Salesforce found evidence that consumers continue to be very price sensitive, prompting stores to discount more heavily over the weekend.
“Consumers did pull back at first, but as discounting increased, demand started to kick back in over the weekend,” said Schwartz.
Lured by those deeper discounts, US order volume turned positive over the weekend, rising by 2% on Saturday and Sunday, according to Salesforce. Overall sales growth increased by 5%.
“Consumers waited — and they were smart to wait,” Schwartz said.
Looking ahead, Salesforce is projecting $13.4 billion in US online shopping sales on Monday, up 4% from last year. The deepest discounts are expected to be for home (26%), health & beauty (35%) and clothes (37%).
Only time will tell whether those deals will be deep enough to lure consumers grappling with a years-long case of sticker shock.
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