Black Friday is in our rearview mirrors and this year’s shopping bonanza was probably worse than previous years as stores battled to see who could offer the best deals even earlier than last year.
There are myriad stories and videos of throngs of shoppers racing to video game bins and pallets of large-screen TVs at big box stores. However, it turns out the a combination of economic calculations and a possible reservations about shopping before digesting our turkeys may have contributed to what appears to be a significantly less robust extended “Black Friday” weekend from a year ago.
CNBC reports that Black Friday shopping weekend may be losing its mojo. Shopping on Thanksgiving was unprecedented this year as retailers like Walmart were open all day long and others opened in the evening for those eager to get a jump start on shopping.
For weeks we’ve been hearing about Black Friday specials and some retailers offered specials on Wednesday to get people in the mood. They offered a mix of discounts and deals with the hope that shoppers would come for one item and pick up two more while there.
It turns out, all of that effort didn’t ring up and perhaps hurt retailers. Survey results of shoppers by a retail industry group finds that 5.2 percent fewer people came out to shop over the weekend and online than last year. Total spending from Thursday through Sunday sank 11% from a year earlier, falling to just shy of $51 billion from $57 billion last year.
Perhaps extending the business hours for workers brought in less money than was expected.
Wall Street Journal reports:
[National Retail Federation] CEO Matt Shay attributed the drop to a combination of factors, including the fact that retailers moved promotions earlier this year in attempt to get people out sooner and avoid what happened last year when people didn’t finish their shopping because of bad weather.
He also attributed the declines to better online offerings and an improving economy where “people don’t feel the same psychological need to rush out and get the great deal that weekend, particularly if they expected to be more deals,” he said.
The retail trade group said the number of people who went shopping over the four-day weekend declined by 5.2% to 134 million, from 141 million last year.
Despite many retailers offering the same discounts on the Web as they offered in stores, the Internet didn’t attract more shoppers or more spending than last year. Online sales accounted for 42% of sales racked up over the four-day period, down from 44% last year, though up from 26% in 2006, the trade group said.
The big questions are where were shoppers and why didn’t they turn out? Perhaps it’s Black-Friday-advertising overload or maybe Americans have less discretionary spending this year than last. It’s also possible that Americans are boycotting stores that opened on Thanksgiving.
As we reported last week, one lawmaker in California wants to penalize retailers for being open on Thanksgiving Day and other holidays. She proposes legislation that would require employers who open on holidays to pay workers twice the wages. The heart may be in the right place but the unintended consequences may inflict more harm than good.
An arbitrary doubling of wages would also meddle with the market value of employee wages. In addition, it would penalize retailers who are struggling to stay afloat in a tough economy and see Thanksgiving as a way to earn a little more or offer their employees work.
At the end of the day, it just may be unnecessary. If after tabulating all of their sales, retailers realize that they spent more operating than they made in revenue, they are smart and efficient enough to alter their behavior for the future. Hence next year, we may see less advertising and fewer stores opening on Thanksgiving.
We just have initial findings. We’ll have to wait for retailers to release their actual revenue, but if these early findings are any indication, no sweeping legislative penalties will be needed as a red bottom line would be the slap on the wrists that retailers need, not government action.