Friday, November 27, 2009

Black Friday

Black Friday unofficially kicks off the holiday shopping season, which will be watched even more closely than usual this year as investors looks for hints that the recovery is strengthening. What can we expect today? It depends on who you ask.

The National Retail Federation predicts holiday-season sales to decline 1 percent, to $437.6 billion. But the International Council of Shopping Centers, another industry group, expects holiday sales to rise 1 to 2 percent. The industry research firm IBISWorld forecasts retail sales on Black Friday alone to increase 2.8 percent from last year.

A total of 76.9 million people are expected to hit the stores today, about 52 percent of American consumers, up from 42 percent last year, according to the consulting firm Accenture. As many as 134 million people say they will shop over the weekend — up from the 128 million people who planned to do so last year.

But they're not planning to spend a whole lot of money. The Accenture survey found that 86 percent of shoppers won't buy anything without a 20 percent discount, and a quarter said they won't buy anything less than 50 percent off. The global business advisory firm AlixPartners says that 87 percent of consumers plan to spend the same or less than they did last Christmas.

The National Retail Federation projects that the average shopper will spend $683 this year, or $23 less than last season. Some 26 percent of families plan to spend $500 or more this holiday, down slightly from last year's 27 percent.

But is Black Friday really what we should be watching? Paul Dales of Capital Economics notes that today is not usually the biggest sales day of the season, which is in reality the last Saturday before Christmas. Dales found that since 1992, it has often been the case that stronger Black Friday sales resulted in weaker performance overall. Shoppers who spend more on Black Friday may end up spending even less the rest of the season.

Happy shopping!

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