The latest iPhone. A bigger flat screen, with an even clearer picture. ‘Ultra-fast fashion’ with 52 collections in a year, made to be worn for a short time. As a consumer, it can be hard to resist temptation sometimes. And eager buying is good for the economy. But we are also increasingly running into the limits of our consumerism. What are those limits? And what does all that consuming get us? In this series, we invite people from various backgrounds to discuss these issues from their specific point of view. Episode 1: the economic perspective - explained by Charles Kalshoven, macroeconomist at APG.
“Discounts of up to 90%”, “Bizarre” discounts, “Exclusive one-day deals!”. If there is one day when consumer temptations lurk, it is Black Friday. Some chains even stretch the concept into “Black Weeks”. How big an effect does Black Friday actually have on our economy? And how important is Black Friday to Dutch retail?
Kalshoven: “The fourth quarter is an important quarter for retail, because of the Sinterklaas and Christmas period, among others. In the third quarter, consumption growth stagnated this year. Consumption of durable goods, such as furniture and cars, even slumped, but this was disguised by the fact that demand for services held up. Black Friday may give sales a push in the right direction. In that sense, from a retail perspective, the phenomenon is important. Moreover, the sales on Black Friday provide an indication of what the rest of the fourth quarter will look like.”
How big do you expect the Black Friday effect to be this year?
“In October, consumer confidence reached a record low of -59 (see box). In November, it reached -57. But that is still well below the average of -9 over the past 20 years and lower than around the time of the euro crisis or the credit crunch in 2007/2008. While this figure is based on consumers’ own judgement and expectations - which do not always match what they do - based on this, I don’t expect exceptionally exuberant consumption on Black Friday 2022. On the other hand, retailers should not be too gloomy either, as on average the outlook for purchasing power is good. After all, the much-needed government compensation measures are coming: the energy cost allowance in November and December, the energy cap as of January 1, 2023 and the minimum wage increase of more than 10 per cent on the same date. Plus, average wage growth in the Netherlands next year should be able to outpace the declining inflation rate.”