Retailers, consumers and prices
“There’s no question there’s some pent-up demand,” as over the past three months consumers saved and paid off their credit cards bills instead of spending, said Stifel Nicolaus retail analyst Richard Jaffe.
Now, “the credit cards are reloaded and the consumer has the ability to spend” on both holiday gifts and personal items such as clothes they had been holding off from buying, amid rising food and gas prices, falling housing values and shrinking credit availability.
Still, many leading U.S. retailers reported steep drops in November sales at stores open more than a year, as bargain seekers at the beginning of the holiday shopping season were unable to save a very tough month.
The chaotic crowds that show up in search of rock bottom prices on Black Friday took a deadly turn this year, when a worker at Wal-Mart, Jdimytai Damour, was trampled and killed by a crowd of frenzied shoppers at one of the discount retailer’s stores in Long Island.
The shocking death made headlines around the world, showing the dark side of American consumerism. A reader identified as Life Faith wrote in to talk Shop Talk to describe the harrowing experience of being caught in the crowd at that Wal-Mart store on Friday morning:
Black Friday has come and gone but what on earth happened at the cash registers over the Thanksgiving weekend? The data is trickling in, and so are the early critiques. (See our previous blogs: Treat Black Friday reports cautiously and Black Friday data spurs more questions than answers)
Here is a break down of the latest reports and what data is still to come:
According its 2008 Black Friday Weekend survey, conducted by BIGresearch and published on Sunday, the NRF said more than 172 million shoppers visited stores and websites over Black Friday weekend (which includes Thursday, Friday, Saturday and projections for Sunday), up from 147 million shoppers last year.
Check out some cautionary comments about how much weight to put on Black Friday sales reports.
The comments come from the Goldman Sachs U.S. economic research group and repeat caution the firm has given in the past about the much-hyped kickoff to the holiday shopping season.
1. “Shoppers are not sales.” Essentially, Goldman Sachs notes that just because people are in stores, it doesn’t mean they are buying something.
“Over the years, Black Friday has become a cultural event; people go not just to shop but to be a part of the broader experience, which could cause an increase in traffic that bears little relation to consumer spending,” the Goldman team wrote.
2. “Sales are not profits.” Retailers were offering deep discounts to get consumers into stores on Black Friday, discounts that could hurt profits.
3. “One day is not the holiday season.” The team notes that the correlation between data on Black Friday and the entire holiday season has been historically poor.
Thanksgiving also came late this year, so there are fewer shopping days between then and Christmas.
“Simply put, with less shopping days each one has to be better for the overall holiday shopping season to be strong,” the Goldman Sachs team wrote.
Want to keep track of the holiday season as it unfolds for retailers? Check out the Reuters Holiday Shopping page here.
Also in the basket:
Bargain hunters fail to save retail sales
Sears Holdings posts loss, plans store closures
Staples posts higher than expected profit
Wal-Mart assailed on death (WSJ)
If you want to know who was the real retail winner amid all the Black Friday frenzy, just look in the mirror.
That’s the word from Jim Barry, a former editor of Video magazine, who is now a spokesman for the Consumer Electronics Association.
On Chicago’s State Street, I found these dinosaurs creeping up on a Christmas tree at the FAO Schwarz section inside Macy’s:
Moving on to an empty TV section in Sears:
At Sears, Christmas decorations were already 60 percent off:
And at Charlotte Russe, more discounts:
As we talk to more and more shoppers over the holiday weekend, the high level of personal anxiety over the future of the economy comes into focus. We have read, and written about, the numbers on consumer confidence and retail sales performance, but these quotes give us a more individual view. Below are some of the ways in which people described for reporters Aarthi Sivaraman and Ben Klayman their fears, or even a change in attitude, regarding money, jobs and family.
Jersey City, New Jersey:
Rose Fernandez, law enforcement worker:
“Yesterday I received my social security savings (statement) and looked at it. I’m concerned. I’m going to put more away.
Rose said her extended family was only living according to their means and were careful not to spend anything extra. She recently came out of $6,000 in credit card debt herself.
These Black Friday pictures were taken at the Mall at Prince George’s in Maryland by our Washington correspondent Diane Bartz. The parking lot was full, full, full and lots of shoppers walked into stores. But when they walked out, they weren’t carrying too many bags.
Check out the line of cars:
But what did you buy? Not much, apparently…
(Adds comments from Friday afternoon)
Shoppers thronged stores to pick up discounted flat-screen TVs, electronics and clothes as panicked retailers pull out the stops in what is traditionally the biggest shopping weekend in the United States. Reuters reporters are out in force, gauging consumer sentiment. Here are our favorite quotes so far:
“I’m not going for the Santa Claus award,” said college student Corey Talley, 24, who was shopping at the Mall at Prince George’s in Hyattsville, Maryland, and plans to spend less this year because he bought a four-unit apartment building in a low-income neighborhood in November 2007 and had only one tenant.
Early bird buyers with shopping carts stuffed with toys, electronics and clothes stood 10 deep in checkout lines and the parking lot was packed with cars at 7:30 in the morning. In Valley Stream, Long Island, the crush turned tragic when a temp worker was killed by the crowd surging through a Wal-Mart’s doors.