[New York Diary] Historic Discounts in the U.S.? Black Friday Brings Another Surge

Black Friday's Diminished Excitement
Retailers on High Alert for Theft Amidst Economic Slowdown

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] The United States has entered the Black Friday season, marking the start of the country's biggest shopping period. This time, spanning Thanksgiving and the following day, Black Friday, is traditionally known as the year-end shopping peak. However, contrary to its nickname as the "land of consumption," the atmosphere is not as vibrant as before. The shift of shopping habits firmly towards online platforms during the COVID-19 pandemic, coupled with the worst inflation in 40 years in the U.S., has significantly impacted household consumption behavior recently.

On Black Friday, the 25th (local time), the main shopping streets in Manhattan, New York, had a relatively subdued atmosphere. Some stores displaying banners such as "40% off all items" and "up to 50% off" attracted large crowds, but relatively few customers were seen leaving with shopping bags after completing purchases. An acquaintance said, "I just came to check the product condition in the store," adding, "It's much cheaper to buy online later." An employee at a clothing store in Macy's department store said, "There aren't as many customers as expected," and added, "Instead, lines form for expensive products, or items only sell when the discount is really big." Amid concerns over economic slowdown, the retail industry, which had pinned hopes on the shopping season, inevitably feels somewhat disappointed.

[Image source=Reuters Yonhap News]

What the U.S. retail industry is particularly wary of during the Black Friday season is something else: theft. At the TJ Maxx discount store visited in Manhattan on this day, many items were found equipped with double anti-theft tags more than usual. Most winter coats priced over $80 had double security devices attached. TJ Maxx explained that the festive holiday mood, massive discounts, and large crowds of shoppers coincide with a sharp increase in product theft during this period. It was also confirmed that most stores, including Walgreens, Uniqlo, and Nike, significantly increased their security personnel for Black Friday.

According to a recent report released by the National Retail Federation, losses due to theft and other causes in the U.S. retail industry reached a staggering $94.5 billion (approximately 126.44 trillion KRW) in 2021. Among these, "organized retail theft" surged by double digits compared to the previous year. Especially during the fourth-quarter shopping season, which includes Black Friday, such thefts reportedly intensify even further.

This explains why retail giant Target warned during its earnings announcement that losses from product theft this year would far exceed $600 million. Considering Target's net income was around $700 million in the third quarter, this means that nearly an entire quarter's profit disappears due to theft. Target also projected that over $200 million of the $600 million loss would be concentrated in the fourth quarter.

Hayward Donahue, CEO of the pharmacy chain Rite Aid, also expressed concern that the cost burden from product theft and related issues is growing. He noted that this problem is particularly severe in New York City. According to the New York Police Department (NYPD), retail theft reports surged 36% compared to the previous year. Local media have reported that stolen goods are being resold. There are also growing criticisms that laws classifying thefts under $1,000 as misdemeanors are encouraging such crimes.

In response, the U.S. retail industry has recently been increasing surveillance cameras and significantly expanding security personnel, investing substantial budgets in theft prevention. More companies are forming dedicated teams to combat organized theft. Target's management has lamented that theft is a key factor among many that are shrinking their business. The burden, however, is not solely on companies. Ultimately, it is the "ordinary consumers" who will have to bear the cost in some way, which is a bitter reality.

This content was produced with the assistance of AI translation services.