Monday, November 26, 2012

Black Friday Weekend Wrap-Up

As I try to summarize the Black Friday weekend reports of seasonal U.S. shopping, it comes across as the same kind of strained positivity we have seen after Black Friday weekend in recent years: signals are mixed, but retailers and analysts want to focus on the positive because it would be too awful to focus on the more negative indications.

Black Friday sales were lower than any recent year, but perhaps that is no more than the shift of some after-midnight sales to the before-midnight period of Black Friday Eve, this year’s big innovation at retail.

There is clearly a problem with Black Friday Eve, though, from retail’s point of view. The evening store openings, as early as 7 p.m. on Thanksgiving Day, overlapped with the time slot that many families traditionally use for Thanksgiving dinner. This conflict in turn led many families to scale back their Thanksgiving plans. The Thanksgiving tradition calls for a feast, but you can hardly leave one of the family behind at home, washing the dishes while everyone else drives off in a turkey haze to go shopping. So I saw many families opting instead for pre-packaged Thanksgiving dinners, essentially a family-sized TV dinner that supermarkets were offering. The eat-and-run Thanksgiving dinner is much easier to prepare and clean up, but it is also much smaller, and that has to make a big dent in grocers’ Thanksgiving-week sales numbers. There was also a larger drop-off on Saturday, the day after Black Friday, than I remember seeing in past years. If we could look at retail totals for the weekend, my guess is that the Thanksgiving shopping losses at retail more than make up for any gains in Christmas shopping on Thanksgiving.

My own area is barely recovered from a major storm, the later stages of Hurricane Sandy that passed by a month ago, so I was looking to see if the shopping that didn’t get done early in November was being shifted to Black Friday. Perhaps that happened, but I could not find any indication of it. In places hit harder, particularly midtown Manhattan, it was easy to see that the larger stores were trying to put a good face on a shopping season that found storm survivors not in a shopping mood.

Nationally, I believe this year’s holiday shopping season has to be bigger than last, a simple matter of demand dynamics. There were fewer large retail liquidations over the course of this year, giving shoppers fewer chances to wrap up their gift-buying at liquidation prices. But that is not such a large effect, and the three-week lull that is sure to follow now will find retailers in the middle of December desperate to unload Christmas merchandise at deep discounts — the same as the last two years. Shoppers who wait until then may be rewarded with discounts every bit as compelling as what we saw on Black Friday, and of course, this is part of the reason for the early December lull that this year also includes almost a full week of November.