‘Tis the Season to Shop11-30-2010 |
The retail holiday shopping season seemingly got off to a good start after Thanksgiving as evidenced by the following statistics released by the National Retail Federation in November 28, 2010 article entitled, “Black Friday Weekend Sees Bigger Crowds, $45 Billion in Spending”:
- The number of people who shopped in stores or online between Thursday and Sunday jumped 8.7% to 212 million shoppers
- The total amount spend during this period reached $45 billion or $365.34 per shopper – representing a 6.4% increase year-over-year
- The number of people who began their shopping at Midnight on Thursday/Friday (i.e. Black Friday) tripled this year to 9.5%
- The number of people who purchased jewelry during this period increased to 14.3% from 11.7%
It looks as though Black Friday is shaping up to be the largest sales day of the year for the fifth consecutive year much (interestingly the Saturday before Christmas is also a very popular shopping day) to the delight of many U.S. retailers. Additionally, the fact that consumers are purchasing more discretionary items, such as jewelry, is also a positive sign for an economy where 70% of economic growth (i.e. U.S. Gross Domestic Product) comes from consumer spending.
However, all is not rosy in the world of retail sales as ShopperTrak estimated in a November 27, 2010 article entitled, “Black Friday Retail Sales Increase a Slight 0.3 Percent as Compared to 2009; Traffic Rises 2.2 Percent” that Black Friday sales rose less than expected even as traffic in the stores increased. Further, shoppers appear to more value conscious and retailers are catering to this condition with bigger deals. Cyber Monday, when many people choose to shop on the internet (call it the “online Black Friday” if you will), will also yield valuable clues into the sentiment of the American consumer.
Our analysis, at Hennion & Walsh, of the data available at this time leads us to believe that the majority of sales this holiday season may very well have taken place by the time Cyber Monday has ended and thus any initial momentum from Black Friday may dissipate. Further, we contend that most consumers will remain constrained with respect to their spending patterns throughout the holiday season and into 2011 given high rates of unemployment and lingering concerns over economic growth prospects.