Monday, December 12, 2011

More Seasonal Shopping Returns

Over the weekend I saw plenty of activity at local retail early, but it tailed off drastically as late Saturday afternoon arrived, with not much to talk about on Sunday. Some of this may be the payday effect, with people returning to stores with their Friday paychecks to make late Christmas purchases.

Surveys have indicated that consumers spent more than they planned on Black Friday and may be tapped out. Retailers who are thinking of deep after-Christmas discounts may instead want to extend their after-Christmas sales well into January to let shoppers collect another paycheck. When shoppers are tapped out, they can’t buy no matter how deep the discounts go. Some of the stock, too, might be better saved for next November, as so much of this year’s seasonal stock was held over from last year.

Two weeks later, there is some caution about the Black Friday results. Apple and Amazon did extraordinarily well, from what we can tell, but with them excluded, Black Friday was not really that good.

Locally, clothing discounter Syms is going out of business. It has done surprisingly well in its liquidation, mostly clearing out the store at discounts of 30 to 50 percent. Those are not deep discounts at a store where older merchandise is automatically discounted. This liquidation success reminds me of the success of the Borders liquidation. It suggests that consumers are willing to buy at lower prices. Prices do not have to be shockingly low to get consumers to buy. This is a deflationary signal, though I do not give it much credence; there are still plenty of indications of resistance to price changes.