‘Tis The Season To Be Spending
Black Friday has arrived and that means that the Holiday spending frenzy has begun. This season is a very important measure of the health of the economy every year. This year, the results could be even more important. In our prolonged struggle to recover from the severe recession, we have encountered many obstacles. Initially, the housing crisis certainly put a major dent in the pace of consumer spending. The good news is that over the painful years of the recovery, consumers have been saving and this puts them in better shape to return to more “normal” spending habits. Indeed, retail sales growth has been strong for the majority of this year. But nothing is more important than the spending that occurs in the last quarter of the year.
Keep in mind that we still face obstacles. The European debt crisis is in the headlines every day and the fear is that a meltdown in Europe will be felt at home. Congress seems to be getting nowhere with regard to deficit reduction while state and local governments have been laying off workers for the better part of two years. The shadow inventory of foreclosures is holding the important real estate sector back. Where does that leave us? We need the consumer to lead the recovery right now. If consumer spending continues to be strong then the housing recovery will follow more quickly. Companies which are flush with cash will be more likely to hire. The November employment report to be released early in December will be a good gauge of business optimism going into the Holiday season. Our best hope? Everyone has a great Holiday season and gets the gifts they want and we have momentum going into the New Year.
First Results Are Excellent…From CNN/Money
Earlier than ever store openings and steep discounts helped retailers notch record sales this Black Friday weekend, according to early reports.
Total spending over the four-day weekend following Thanksgiving reached a record $52.4 billion, up 16% from $45 billion last year, according to a survey by the National Retail Federation released Sunday.
A record 226 million consumers shopped in stores and online between Thursday and Sunday, up from 212 million last year. Individual shoppers spent more too, the NRF said. The average holiday shopper shelled out $398.62, up from $365.34 in 2010.
Earlier openings at big-box retailers like Wal-Mart (WMT, Fortune 500), Toys R Us and Target’s (TGT, Fortune 500) was one factor boosting sales — particularly among men and young adults, according to the early tally. Nearly one-quarter of Black Friday shoppers were at stores by midnight on Black Friday, up from only 9.5% in 2010, the NRF said.
“I would say that means we will have to be on the look-out for a new tradition and that is more and more stores will be opening on Thanksgiving night next year,” Marshal Cohen, chief industry analyst at the NPD Group, said in a statement.
In a separate survey released Saturday, ShopperTrak said retail sales on Black Friday alone climbed 6.6% this year to an estimated $11.4 billion.
Online retailers also played a bigger role this year with a slew of deep discounts and promotions well before Cyber Monday. Online sales were up 39.3% on Thanksgiving Day and 24.3% on Black Friday compared to the same days last year, according to IBM’s (IBM, Fortune 500) Coremetrics, which tracks real-time data from 500 retailers in the apparel, department store, health and beauty and home goods categories.
Cyber Monday could also notch a new record, according to online tracking firm ComScore. Online sales for 2011 are projected to hit $1.2 billion, up from $1 billion last year, Andrew Lipsman, ComScore’s industry analyst, said.