Amazon Prime Day Reveals Weakening US Consumer Spending, Driven by Tax Refunds and Discounts

NEW YORK (CNA, Reuters) - U.S. consumers spent over $26.4 billion during Amazon's annual Prime Day shopping event. However, experts point out that this performance was primarily propped up by government tax refunds and significant discounts, with the average order value decreasing rather than increasing, signaling a potential decline in consumer spending power.

According to Reuters, while total spending increased by 9.3% compared to the same period last year, retail experts attribute this rise mainly to high inflation and consumers taking advantage of discounts to purchase non-essential but durable goods.

Adobe Analytics reported that the deep discounts offered by various retailers during the four-day Amazon shopping festival successfully prompted consumers to purchase high-ticket items, including electronics, toys, appliances, and personal care products. This suggests that retailers may need to continue offering substantial discounts during the year-end shopping season to drive sales.

Arun Sundaram, an analyst at CFRA Research, stated that in addition to discounts, government tax refunds "likely provided a considerable boost for these types of non-essential purchases."

Sundaram noted that according to IRS data, the average tax refund amount increased by 11.1% to approximately $3,462 (about NT$109,000) this year, providing consumers with additional financial resources to purchase items they had been delaying.

Sonia Lapinsky, a managing director in the retail practice at global consulting firm AlixPartners, observed that consumers also rushed to buy children's items, clothing, personal hygiene products, and home goods before the back-to-school season, indicating that consumers are stocking up on items they need anyway during the sale period.

She commented, "This really reflects that consumers are feeling stretched. They're not really spending more money, they're just trying to make their limited budgets go further on better deals and discounts."

An independent survey by research firm Numerator, which tracked over 178,000 Prime Day orders, found that the average order value was $47.66 (about NT$1,506), down from $53.34 (about NT$1,686) last year. Some experts believe this indicates a gradual decline in consumer spending power. (Compiled by Chang Ming-hsuan) 1150629