Smith Brain Trust / September 2, 2021

Why 2021’s Labor Day Sales Are Likely to Disappoint

Why 2021’s Labor Day Sales Are Likely to Disappoint

Labor Day weekend shoppers might have a little extra money to spend, but they will have to work harder to find discounts this year.

Supply chain disruptions caused by the continuing pandemic and a series of severe weather events have had retailers struggling to maintain inventories and subsequently less-incentivized to discount items in stock – even for the usual Labor Day sales bonanzas on appliances, mattresses and autos, said Maryland Smith marketing experts Amna Kirmani and Jie Zhang.

That may make for a frustrating shopping weekend for American consumers, many of whom have extra cash after stimulus payments and months of staying at home, taking fewer vacations and dining out less often.

Those shopping for cars and trucks are likely to find it particularly exasperating. The average price per vehicle in the United States is $41,044, an all-time high, and consumer demand is strong. A WalletHub survey finds that 87 million Americans plan to shop for cars over the long weekend.

“Labor Day weekend sales are a big event in the retail industry,” Zhang, professor of marketing and Harvey Sanders Fellow of Retail Management, told WalletHub. “Traditionally, this is also a popular time to buy cars. Dealers usually offer special discounts, including attractive promotions for new models of the upcoming year.”

It won’t be business-as-usual at the auto dealerships this weekend. The global computer chip shortage and other disruptions have sharply reduced the usual inventory for vehicles, at a time when American workers are facing return-to-the-office mandates and looking for safer, personal commuting options.

“We live in unusual times,” she said. “So do not expect big sales this Labor Day weekend, especially if you are looking to buy a popular car model.”

Popular models this year are those made by an American brand. Some 58% of Americans say they’d prefer to buy an American-made car this year. The stat did not surprise Zhang, given the disruptions along the supply chains. “Products procured internationally tend to experience longer delays and more uncertainty. American-made products in general, and cars in particular, become more attractive during these uncertain times,” she said.

Those not shopping for vehicles may have a slightly easier time, Kirmani, Ralph J. Tyser Professor of Marketing, told NerdWallet via the Associated Press.

She advised shoppers to maximize their money – and their odds of finding a good deal – by comparison shopping online. “Seek out deal comparison sites and sales roundups that do the homework for you, or start monitoring prices yourself before Labor Day so you can judge the value of a sale,” she said.

Also, for consumers who can “hold off” on certain items that are being impacted by supply chain disruption, it may pay off to wait for Black Friday sales in November. Those sales, she said, are historically better than Labor Day.

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