Will the Christmas shopping season be a success? The answer is obscure.

Looking for bargains, American consumers filled their shopping carts with Christmas gifts last weekend. But it is not yet clear whether this means this will be a successful season for retailers.

Early measures of spending over the Thanksgiving weekend suggest consumers spent more than last year, but that’s only because prices are higher. It could still be considered good news when viewed against previous expectations that rising prices, higher interest rates, the return of student loan payments and concerns about the economy could have caused people to pull back on spending.

But the crucial measure of consumers’ health will be whether they continue to spend this month, even after those extraordinary Black Friday discounts are gone. In recent months, companies have reported that consumers are responding more to promotions, like last weekend’s, and are avoiding major purchases.

Although Black Friday gets a lot of attention, the holiday shopping season continues through December. To be a success for retailers, they will have to pay higher prices for the rest of the year than in the days after Thanksgiving. If companies have to keep expanding discounts to get people in the door, that’s going to be a problem.

“That’s what will determine the winners and losers as we get through the rest of the holiday season,” Matthew Shay, CEO of the National Retail Federation, a trade group, said on a recent conference call. The NRF maintained its forecast that holiday sales – from November 1 to December 31 – would grow 3 to 4 percent this year.

That forecast has not been adjusted for inflation. This also applies to the first sales figures of the weekend. Mastercard, for example, said sales both in stores and online rose 2.5 percent on November 24 from a year earlier. But with consumer goods (excluding food and fuel) rising at about 4 percent annually, this suggests retailers aren’t necessarily moving more merchandise.

“We don’t think sales were strong; they were so-so, to the point of being mediocre,” says Craig Johnson, the founder of retail consultancy Customer Growth Partners. His company estimated that sales for the four-day period beginning on Black Friday and ending on Cyber ​​Monday were $94.2 billion, up about 2.5 percent from last year. Similar to Mastercard’s estimate, the retail consultancy forecast that – adjusted for inflation – sales fell slightly, Mr Johnson said.

Some major retailers appear prepared for the slowdown in demand. Companies like Target and Macy’s have reported cutting inventory levels in recent quarters, and that could put them in a better position to make profits even if demand is weaker, said Edward Yruma, an analyst at the investment bank Piper Sandler .

If stores have too much inventory, they may have to lower prices more than expected, which would erode their profits.

“For the first time in four quarters, we see that retailers are better aligning their inventories with turnover,” said Mr Yruma. “That gives them the opportunity to have promotions planned.”

Retailers have been keeping a close eye on consumer behavior over the past year. The pandemic-era budget stimulus checks that many used for shopping over the past two years have now been spent. And while the rate at which prices are rising has slowed significantly, the overall price increase is starting to weigh on customers. High interest rates and student loan payments are also weighing on consumers.

After more than a year of touting consumer resilience, many companies reported in the most recent quarter that customers appear to be pulling back.

Target CEO Brian C. Cornell told analysts on a recent earnings call that the company was “navigating a very challenging environment as consumers continue to rebalance their spending between goods and experiences and make difficult choices in the face of persistent inflation.” ”

The latest inflation measure for personal consumption expenditure, released Thursday, confirmed that consumer spending slowed in October. This is because people also want to spend more on services such as airline tickets rather than on goods such as video games.

And those consumers are showing signs of distress in other ways. Adobe, which tracks online spending over the Black Friday weekend, said purchases made under “buy now, pay later” plans that let people buy on credit rose 42.5 percent from last year.

It’s true that buy now, pay later options are more readily available than in years past, but the shift toward credit also comes as retailers offering other forms of credit are reporting higher delinquencies. That suggests consumers won’t be able to continue spending as they used to, said Kathryn Rooney Vera, chief market strategist at StoneX, a financial services company.

“It’s not sustainable,” she continued. “It shows an unhealthy trend.”