by Robin Fiedler

As the Black Friday post-Thanksgiving shopping day approaches, retailers gear up for the “traditionally” largest profit quarter of the year. Profits so far, for the big retailers with $50 million plus in assets, are modestly increasing in the first two quarters of 2009 but still down from the same quarter in 2008, according to the US Census Bureau.

On Sept, 21, 2009, the US Census Bureau released the news that “sales in the second quarter of 2009, at $499.9 billion, were up $12.3 (±2.2) billion from the $487.6 billion recorded in the first quarter of 2009, but down $32.0 (±5.8) billion from the $531.8 billion recorded in the second quarter of 2008.”

According to the US Census Bureau profits for the 4^th quarter holiday season of 2008 were a bust, posting over a $2 billion loss. As for the 4^th quarter 2009, Dr. Anthony L. Liuzzo, Professor of Business and Economics and Director of the MBA Program at Wilkes University, “forecast[s] that holiday retail sales will increase by 2% in 2009.” He has a more optimistic outlook in a slightly improved economic atmosphere.

In contrast to Liuzzo’s prediction, The National Retail Federation (NRF) predicts a 1% drop in holiday sales totaling $437.6 billion in sales. The NRF admits, “While this number falls significantly below the ten-year average of 3.39 percent holiday season growth, the decline is not expected to be as dramatic as last year’s 3.4 percent drop in holiday retail sales nor as severe as the 3.0 percent decline in annual retail industry sales expected for all of 2009.” Still, when comparing the US Census Bureau’s $499.9 billion 2^nd-quarter sales in 2009, perhaps NRF’s prediction of $437 billion for holiday sales may be a bit low. But with hundreds of billions at stake, what’s another billion here or there?

How much of these billions account for Black Friday? By the appearance of the traffic jams, early-morning long lines around buildings, and shopping-cart battles in store aisles, it would appear that Black Friday is the most profitable shopping day of the year for retailers. However, Liuzzo notes, “Contrary to popular misconception, the Thanksgiving weekend only accounts for about 10% of holiday sales (in 2008, shoppers spent an average of about $125 on holiday spending during this weekend), while retail sales during the weekend just prior to Christmas represent about 30% of holiday sales.”

I had to do the math. Even with the NRF’s lower prediction of $437 billion in holiday saels, 10% equals a 43.7 billion dollar take on Black Friday weekend. Maybe if I do all my shopping on Black Friday, my contributions will kick it up to $50 billion. I’d better start my gift list.

Footnotes:

Grannis, Kathy. “NRF Forecasts One Percent Decline in Holiday Sales.” National Retail Federation. 6 Oct. 2009. http://nrf.org/modules.php?name=News&op=viewlive&sp_id=799

Hanna, Demetria and John Seabold. “Second Quarter 2009 Data from the Quarterly Financial Report: Large U.S. Retail Trade Corporations.” US Census Bureau News. 21 Sept. 2009. http://www2.census.gov/econ/qfr/current/qfr_rt.pdf

Liuzzo, Anthony L. “Holiday Retail Sales Forecast: 2009.” Wilkes University. 3 Aug. 2009. http://www.wilkes.edu/Include/Latest_News/Holiday%20_Retail_Sales_Forecast%20_2009.pdf

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