Best Buy Co. Inc. said Tuesday it’s planning to start its annual holiday savings events in October this year instead of waiting for Black Friday in November, in the latest sign of the struggles facing retailers.
The electronics retailer BBY, +0.45% was among a flurry of names to unveil their sales plans early Tuesday, including Target Corp. TGT, +0.22% which will hold its Circle Week sale Oct. 1 to Oct. 7, getting in ahead of Amazon.com Inc.’s AMZN, -2.82% Prime Day sale on Oct. 10 and Oct. 11 and Walmart Inc.’s WMT, -0.51% Oct. 9 to Oct. 12 holiday event.
UBS said a survey of consumers and their holiday spending plans conducted in July and September found the percentage who plan to spend less this season rose 840 basis points sequentially, while the percentage who said they would spend more rose by just 340 basis points. “This 500 basis points spread is the second highest in 12 years,” UBS analysts led by Jay Sole wrote in a bearish note to clients.
UBS analysts are bearish for the near term and the next 12 months, because inflation remains a key concern for many. That’s combined with the end of various stimulus programs — including the resumption of student-loan payments in October.
There’s also the end of Medicaid payments for up to 14 million Americans, the lapping of the $9.5 billion California fiscal stimulus and the long-term effects of Fed rate hikes on the U.S. economy.
“Our view is the coming slowdown is just one step of a multistep process which will play out over the next 6-12 months,” said the note.
Best Buy said in August when it reported fiscal second-quarter earnings that the consumer had continued to make “careful choices and trade-offs” given a number of macroeconomic headwinds.
“Our industry continues to experience lower consumer demand due to the pandemic pull forward of tech purchases and the shift back into services spend outside the home, like travel and entertainment,” Chief Executive Corie Barry told analysts on the company’s earnings call. “In addition, of course, persistent inflation has impacted spending decisions for a substantial part of the population.”
D.A. Davidson said Tuesday that its regular review of app downloads found Best Buy’s were down 7% in the week through Sept. 16, a deceleration after they were down 3.6% the previous week, but a bit better than the four-week average of down 9.2%.
Best Buy was among the weaker-performing apps in August, with active users down 6.8% after falling 1.1% in July, D.A. Davidson found. The company was joined by Target, where active users fell 1.3% in August after falling 0.7% in July.
Best Buy said loyalty program members will be entitled to thousands of deals and discounts starting in October and will receive a $50 reward certificate for every $500 they spend.
Members will also be granted early access to Black Friday deals from Oct. 27 to 29. The company is teaming up with Samsung 005930, -0.57% and Microsoft MSFT, -0.87% for special sales events with shoppers who spend $1,00 on Samsung products, including home theater and appliances, entitled to a $100 reward certificate.
For the Microsoft event, shoppers can save up to $500 on Windows laptops. The company is also planning a 48-hour flash sales from Oct. 10 to 11 with deals on TVs and laptops, headphones and smartwatches, among other items. For gamers, the company will hold a three-day sale from Oct. 20 to 22.
Target, meanwhile, will start its “Deal of the Day” event on Oct. 1, offering deep discounts for members of its loyalty program. The company said it would offer thousands of gifts priced at under $25 this holiday season, as well as seasonal food and beverage items starting at just $2.
The company said it’s introducing a long-term partnership with Austin-based lifestyle brand Kendra Scott, which will include more than 200 jewelry and accessories items, most priced under $40.
The company is also bringing back Marks & Spencer gourmet food and beverage items. The company is planning to hire nearly 100,000 seasonal team members this holiday season.
Walmart said its “Holiday Kickoff” will feature deals on sought after gifts across electronics, home, fashion, toys and more. Bargains include an Apple Watch SE for $149, a $171 savings from its usual price of $320.
Amazon is already displaying some of this year’s Prime Day sales event bargains and said it would extend free shipping to partners that use its “Buy with Prime” feature.