Black Friday retail sales are expected to jump 15% this year over 2021, as consumers flock back to stores with the ebbing of the COVID-19 pandemic, Mastercard said in a report this week.

The card network company’s forecast, which takes into account U.S. online and in-store retail sales across all payment types, is not adjusted for inflation and excludes automotive sales, the Purchase, New York-based card company said Tuesday in a news release.

Since a number of big-box retailers, department stores and outlet malls will be closed on Thanksgiving Day, consumers will be “gearing up for the main event – a Black Friday shopping blitz,” Mastercard predicted.

In-store retail sales are expected to jump 18% on a year-over-year basis, as the return of doorbuster sales at brick-and-mortar locations attract more foot traffic to stores in the wake of the pandemic, the card company said.

“In October, we saw the strength in the labor market continue to support consumer purchasing power,” Mastercard U.S. Chief Economist Michelle Meyer said in the release. “Coupled with heavy online promotions, consumers got a head start on their holiday shopping, fueling another strong month of retail sales.”

October U.S. retail sales, excluding automotive sales, climbed 9.5% over last year, and 23.6% compared to October 2019, driven by in-store and e-commerce sales, the report said.

Department store sales are expected to rise almost 25% over last year, as consumers seek deals both online and in-person at these stores, Mastercard forecast.

Meanwhile, travel will increase by double-digit percentages over last year’s Black Friday, Mastercard’s report said. Airline sales jumped 17.2% between October 2021 and October 2022. Lodging rose 36.9% during the same time period. Restaurant sales are expected to increase 35% on Black Friday as consumers opt to dine out, according to the report.

“Expect Black Friday shopping to be in full force across channels this year,” said Steve Sadove, a senior adviser for Mastercard and a former CEO at the retailer Saks. “While retailers have already been heavily discounting this season, consumers and retailers are likely holding out for some special offers to land on the biggest promotional day of the year.”

As sales momentum picks up, consumers are adding to their debt loads. Total U.S. household debt rose $351 billion, or 2.2%, in the third quarter to $16.51 trillion, the New York Federal Reserve Bank said Tuesday. Balances are now $2.36 trillion higher than at the end of 2019, prior to the pandemic.

In the first three quarters of 2022, there was a sharp increase in credit card balances, following a big drop after the pandemic arrived in early 2020, researchers observed in a credit card debt report also issued this week. A chart in their report shows a 15% third-quarter increase in balances this year that “towers over the last eighteen years of data." 

By Jonathan Berr on Nov 16, 2022
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