Coverage: Black Friday sales slump
Black Friday might not be doing enough to put retailers in the black for the year. The initial numbers are back, and sales dropped 11 percent from the previous year.
Shelly Banjo had these details in a story for The Wall Street Journal:
Retail spending over the Thanksgiving weekend fell 11%, according to the main industry trade group, a sign that the annual four-day shopping bonanza may be losing some of its punch.
The decline, the second annual drop in a row, came in part because retailers started offering deals in the days and even weeks before, giving shoppers ample opportunities to snag discounts without having to endure the lines and crowds that typify Black Friday.
Total spending from Thursday through Sunday sank 11% from a year earlier to $50.9 billion, according to the National Retail Federation, which surveyed 4,600 consumers on Friday and Saturday.
Shoppers spent an average of $380.95, down 6.4% from a year earlier.
The trade group still expects total holiday sales through the end of the year to rise 4.1%.
Shoppers “don’t feel like they have to get out that one day or miss spending the holidays with their families,” said Elissa Margolis, senior vice president for Disney Store North America at Walt Disney Co. The company, which operates more than 200 Disney stores in North America, began offering promotions on items like dolls and costumes from the “Frozen” and “Star Wars” movies online and in its stores on the Monday before Thanksgiving.
The New York Times story by Hiroko Tabuchi said that people were spending less both in stores and online:
And though many retailers offered the same aggressive discounts online as they did in their stores, the web failed to attract more shoppers or spending over the four-day holiday weekend than it did last year, the group said. The average person who shopped over the weekend spent $159.55 at online retailers, down 10.2 percent from last year.
Over all, 133.7 million people shopped or planned to shop at stores or online over the four-day weekend, 5.2 percent fewer than last year, the federation said. And shoppers spent an average of $380.95 over the four days, 6.4 percent less than the $407.02 they spent last year.
Executives at the retail federation, which had predicted strong growth in sales this holiday season, appeared at a loss to fully explain the drop-off.
The results could show that “there are a significant number of Americans out there for whom the recession is not yet over,” said Matthew Shay, the group’s president and chief executive.
At the same time, those who did feel more flush, thanks to lower fuel prices and brightening job prospects, might not have felt the need to hunt down the rock-bottom Black Friday deals, he said.
Bloomberg’s Nick Turner and Lauren Coleman-Lochner said that some people were boycotting stores that decided to open on the holiday:
For retailers, the numbers make it hard to tell if they got a payoff from opening earlier on Thanksgiving evening — a move that raised hackles among workers and activists. J.C. Penney Co. opened at 5 p.m. on the holiday, compared with 8 p.m. in 2013. Macy’s Inc. and Target Corp. opened at 6 p.m., two hours earlier than last year
Protesters objected to stores operating during what was once a commerce-free holiday, while workers complained that the longer hours made it harder for them to schedule time with their families. Petitions calling on retailers to stay closed on Thanksgiving drew hundreds of thousands of signatures on Change.org.
Some chains responded to the pressure. RadioShack Corp. scaled back its Thanksgiving hours after its workers complained. Whole Foods Market Inc., meanwhile, said it would pay double time on Thanksgiving this year and make holidays shifts voluntary. Workers at two Chicago Whole Foods stores had demonstrated against mandatory holiday work last year.
The Financial Times story by Elizabeth Paton pointed out that analysts believe the shoppers might be delaying making purchases:
Analysts now expect spending to be spread more broadly across November and December, weakening the sales spike traditionally seen around the Black Friday weekend.
“The macroeconomic environment may be more favourable for some consumers but for retailers it continued to be a heavily promotional and challenging environment,” said Matthew Shay, chief executive of the NRF. “Shoppers are very savvy, deals-focused and from here on in its going to be a dogfight. Every day until Christmas will be Black Friday, every minute a Cyber Monday,” he added.
Bill Martin, founder of ShopperTrak, suggested the slip in sales volumes meant consumers may be browsing more and delaying shopping until later in the season. He stressed that seven of the year’s 10 biggest shopping days were yet to take place, including Super Saturday, the final Saturday before Christmas, which has now eclipsed Black Friday to become the biggest shopping day on the calendar.
“Consumers clearly gravitated towards Thanksgiving at the expense of Black Friday this year, but these two days are not indicative of what might happen across the entire season. There is a significant amount of energy left in the consumer,” he said, adding that although last year Black Friday weekend sales rose by just 1 per cent from 2012, sales for the entire season ultimately logged a gain of 3.1 per cent.
“It’s important to remember that, despite getting out of the gates quickly, the holiday season this year is a marathon and not a sprint,” said Mr Shay. Last month the NRF forecast that November and December’s combined online and offline sales would increase 4.1 per cent to $617bn this year – the highest for three years.
The initial weekend shopping numbers don’t look good, and retailers may have to offer even deeper discounts to lure in consumers. And it seems like that’s exactly what many people expect to happen – price cuts as Christmas gets closer. That might work, unless you’re trying to buy a Frozen doll. Then all bets are off.