US Tariffs Crimp Black Friday Deals: Retailers Scramble to Adapt to Rising Costs

Image Source: Internet

This year's Black Friday may not be the bargain-hunter's paradise it once was. Tariffs imposed by the US government have driven up costs for many retailers, forcing them to scale back on discounts and promotions. Companies like Ash Harbour and ThinkFit are feeling the pinch, with some products now priced at full cost due to the tariffs. Upstream Brands, which sources products from countries impacted by the tariffs, is particularly hard hit, with a copper herb stripper now costing $30, up from $20 last year. 'This is a perfect storm,' said Dan Peskorse, owner of the parent company that sells the products. 'Our costs of goods are so high because of the tariffs, and we can't offer discounts because it doesn't make financial sense.' Other retailers, including Coach and Therabody, are also pulling back on promotions, citing tariffs and inflation as major concerns. Therabody, which makes a massager and LED-mask, has already raised prices by 5% to 7% this year and is shifting some production out of China. The impact of tariffs on Black Friday deals is expected to be significant, with a survey from PricewaterhouseCoopers LLC showing shoppers are cautious, with consumers' estimated holiday spending expected to drop 5% on average from last year. Retailers are caught 'between a rock and a hard place,' said Neil Saunders, managing director at GlobalData. 'On the one hand, they want to protect margins, but on the other hand, they know the consumer is really looking for those discounts to nudge them into spending.' While some retailers will still offer frequent promotions, the deals won't be as deep as in past years. Companies are also ordering fewer goods to avoid overstocking and subsequent profit-busting markdowns. 'They'd rather sell out than sell off,' said Marshal Cohen, chief retail advisor at research firm Circana. Luxury companies, in particular, are loath to offer markdowns, preferring to maintain their exclusivity and hype-worthy status. Shoppers will still be hunting for doorbusters, but with fewer discounts available, this year's Black Friday may be a more subdued affair.