Black Friday Sales Signal Slow Holiday Season
by Doug Desjardins
Big crowds gathered for pre-dawn Black Friday door-buster sales, but the early-bird shoppers didn't leave much money behind. The National Retail Federation (NRF) estimates that consumer spending declined 7.8 percent to $343.31 per-person on Black Friday compared to $372.57 last year. Spending declined despite a 13 percent increase in foot traffic, with an estimated 195 million people crowding into stores for the biggest shopping day of the year.
NRF president Tracy Mullin said the decline in spending wasn't a surprise, given that retailers have cut prices across the board and are more focused on promoting discount items. "Shoppers proved that they are willing to open their wallets for a bargain, heading out to take advantage of great deals on less expensive items like toys, small appliances and winter clothes," said Mullin. "Retailers are encouraged by the number of Americans who shopped on Black Friday but know they have their work cut out for them to keep people coming back through Christmas."
According to the NRF, most shoppers came early for the bargains, with 31.2 percent arriving at stores before 5 a.m. compared to just 23.3 percent last year.
Other research firms reported more positive Black Friday numbers. ShopperTrak estimates that Black Friday sales increased 0.5 percent to $10.66 billion, putting them in line with most holiday forecasts that predict sales will be flat or up or down only slightly. On Black Friday in 2008, ShopperTrak reported a 3 percent increase in sales.
One area where sales increased was online. According to research firm ComScore, Black Friday online sales increased 11% to $595 million, making it the second busiest day of 2009. ComScore said Best Buy led the way with a 24 percent increase in online sales and that Target Corp. registered just a 2 percent gain.
Gian Fulgoni, chairman of ComScore, said the impressive numbers hint that online sales may jump more than expected during the holidays. "While this acceleration in spending suggests the online holiday season may be shaping up more optimistically than anticipated, it may also reflect the heavy discounting and creative promotions being put forth by retailers that now encompass the use of social networks such as Facebook and Twitter," said Fulgoni. ComScore is predicting a 3 percent increase in online sales for the holiday season.
The results of Black Friday weren't great, but they could have been worse. Marshall Cohen, chief retail analyst for the NPD Group, said retailers were able to generate business without using fire-sale prices as they did in 2008. "The fact that retailers were able to sell as much, if not more, product at a 40 percent discount compared with last year's 75 percent storewide discount is a positive," said Cohen.
Black Friday sales are usually a good barometer for forecasting holiday sales, but that's not always the case. In 2008, Black Friday sales jumped 7 percent but went downhill from there, falling 3.4 percent for the full holiday season.