Black Friday Sales Lower than Last Year's ... Thursday Was the Reason

Limited time sales promotions by retailers offering lower prices usually accomplish only reduced profits for retailers, assuming total sales aren't increased as a result of the promotions.

For consumers, however, they spend less to buy what they wanted to buy anyway.

And as we predicted in an earlier post this week, that seems to be what's happening again this year due to retailers opening Thursday evening this year in advance of the traditional early morning Black Friday openings.

Hence, maybe we'll soon call it 'Red Friday' due to losses incurred instead of profits realized on the day after Thanksgiving.

In any event, pulling sales forward isn't the same thing as increasing overall sales. Frequently all it does is lower prices for consumers and therefore profits for participating retailers. Especially if most retailers play the game. And they do if only not to lose business to their competitors.

So competition is why retailers engage in these otherwise not-good-for-business early bird sales. Because if they don't participate and other retailers do, they will lose both sales and profits.

Competition is good for consumers as retailers try to get the edge on their competition. Meanwhile, competitors then make offsetting moves and all that happens is that sales happen sooner and at reduced prices for consumers and lower profits for retailers. No new business is created overall during the holiday selling season.

Black Friday Sales Down Due to Thursday Deals says this:

Black Friday holiday sales weakened from last year as a big promotional push by U.S. retailers on Thanksgiving Day sucked spending from what has traditionally been the biggest shopping day of the year, according to data released on Saturday.

ShopperTrak, which counts foot traffic in retail stores, estimated Black Friday sales of $11.2 billion, down 1.8 percent from the same day last year.

 

"More retailers than last year began their 'doorbuster' deals on Thursday, Thanksgiving itself," said ShopperTrak founder Bill Martin. "Those Thursday deals attracted some of the spending that is usually meant for Friday."

 

Retail foot traffic rose 3.5 percent to almost 308 million store visits on Black Friday, with the largest increases in the U.S. Midwest, ShopperTrak also reported.

 

"Still, shoppers remain value-conscious, taking advantage of Black Friday deals - even if some of those deals started a bit early," Martin said.

 

If new Thanksgiving sales from earlier store openings are adding to Black Friday numbers, there would likely have been an increase of almost 1 percent in sales, compared with a year earlier, Ed Marcheselli, chief marketing officer at ShopperTrak, estimated."

 

Summing Up 

 

Oh well, at least the retailers tried to generate increased business, even if their efforts weren't successful.

 

And in the process, many consumers received better deals for having begun their shopping Thursday evening.

 

That said, my guess is that those consumers who waited will still do fine and that retailers will not have gained anything except higher expenses, lower employee morale and reduced profits.

 

Thanks. Bob.