The Wall Street Journal reported earlier this week that the annual tradition of post-Thanksgiving Day shopping will be a critical moment for the retail business this year. A new survey indicates that this Black Friday will be less lucrative than 2008’s, which was no prize at all itself. The economy has not rebounded to the point where retailers can rely on free-spending shoppers to materialize at 5 am:
Black Friday marks the unofficial start of the holiday shopping season, but retailers still aren’t sure how strong a showing consumers will make.
New reports Monday didn’t paint an encouraging picture. The Conference Board released a survey of spending intentions that showed U.S. households expect to spend an average of $390 this season, down 7% from estimates of $418 last year. That number is especially distressing because consumers were unusually pessimistic last year as the financial crisis went into full swing just as holiday shopping was getting underway.
“Job losses and uncertainty about the future are making for a very frugal shopper. Retailers will need to be quite creative to entice consumers to spend, both in stores and online this holiday season,” said Lynn Franco, director of the Conference Board Consumer Research Center.
A separate report from retail-tracking firm NPD Group indicated consumers may not be flocking to the mall for Black Friday. Just 32% of respondents said that they expect to begin their holiday shopping on Thanksgiving weekend or earlier.
The WSJ quotes another analyst from Miller Tabak + Co as more optimistic. Dan Greenhaus points to a rebound in the markets and a recovery of retirement plans as a motivator for shoppers to part with their cash. The market may have rebounded, but the jobs have not. There are 3.3 million more people not in the work force since last Black Friday, and that’s 3.3 million people less likely to be shopping for holiday bargains. In fact, they’re probably not going to be shopping much at all, and at the rate people are losing jobs now, there will be at least 450,000 a week joining them, at least temporarily.
But that’s not the only thing that will hold people back. Higher taxes and fees in the future, as signaled by Congress’ expansionist efforts, means people will be saving more and spending less anyway, even if they feel secure in their jobs. The Obama administration and its allies on Capitol Hill have made it plain that they intend to hike the prices of energy, food, and health care over the coming years. With inflation eating away at the value of their money, consumers will be less likely to spend frivolously.
As for me, I never venture out to the malls on Black Friday. I worked too many of them as a retail employee in my youth to enjoy them as a shopper — and by “too many”, I mean five of them, which was four too many. How about you? Take this completely unscientific poll and see how your fellow Hot Air readers will spend today. I plan to spend it in front of the computer for a while, and then perhaps at the movie theater. I might want to see Dances With Smurfs, er, Avatar.