The numbers are in for Black Friday. Many retailers sighed a sigh of relief as sales were up this year. While not as high as the 8% of 2007, there was a collective jubilance that sales had done better than expected. According to Market Watch sales were up at over 50,000 retailers across the nation. Thanks to deep discounting, friday sales were up almost 3% over last years according to industry analyst ShopperTrak RCT Corp. This increase in total sales over 2007 is seen as promising. There was much concern with retailers that the Christmas sales would drop this year, and how far they would drop.
This increase in sales is seen in a positive light considering that this is the deepest recession since the Great Depression. I am sure that the economists will see this in a positive light. Christmas purchasing surveys before Black Friday showed that there would be a 50% decrease in spending amongst consumers. Their concerns about the bleak future of the economy dampened their Christmas spending habits. It is possible that many buyers did all of their purchasing during the sales on Friday, and that there will be a drop in buying over the next month. We won’t know until all the numbers are in.
Even Web sales were up according to Ebay Inc and Amazon Inc., according to Yahoo Tech. Sales had been flat before Black Friday, but there was a sharp increase in sales on friday. Paypal saw it’s Black Friday transactions jump over 34% from last year’s. It will be interesting to see if this trend contuniues on Cyber Monday as many people search the Internet for more sales.
Electronics are still the most sought after item on the internet, for example, the iPod, digital cameras, Nintendo Wii and Wii Fit, etc were leading the way on Ebay and Amazon. . Will this consumer spending splurge be enough to get us out of this recession? I do not think so.
This is the first consumer led recession in capitalism’s history. The other recessions or depressions (before Keynesian economics) have been business led. A consumer led recession is an unique situation for governments. It has never happened before. Many consumers are facing high debt loads, foreclosures, loss of jobs, etc. It will be interesting to see how the rest of the Christmas sales season plays itself out. That is probably the end of the discounting for this season. Have consumers purchased everything that they need for Christmas?
Will business rethink the Black Friday concept after three people lost their lives, this year – one worker who was trampled at Walmart and there were the two who shot each other at Toys R Us? With all the deep discounting and the three deaths, did the businesses actually win? They can start to ponder these decisions in January when they start working on their bottom line. .