From 24/7 Wall Street:
“Black Friday sales showed a very slight increase over last year despite record spending for the day 0.3 percent increase versus the same period in 2009.”
This translated into disappointing revenue growth:
“retail sales increased a very slight 0.3 percent versus last year with consumers spending $10.69 billion in various retail locations.”
Sales per purchase appear to have dropped because total “U.S. foot traffic increased 2.2 percent on Black Friday which points to a shopper driven by various sales and promotions.” The increases in store visits is larger than overall sales growth..
Which is about what I expected to happen. People are zeroing in on the best deals and not indulging in impulse buying. And who really can? Honestly, how many of you out there feeling like spending a lot of money? More importantly, since consumer credit was such a large part of the boom before the bust, how many of you want to rack up the credit cards for Christmas? I do expect that 2010 will be better than 2009 because people, I think, have de-leveraged a lot and saved some money (those that are employed, at any rate)…so, now they can do a bit of shopping. But the days of shop till you drop and buy everything in sight on credit cards are over. And I don’t think they’re coming back.
Ultimately, this is a good thing. It is a sign of sanity – a sign of sobriety and thrift building up in the American people. First, earn; then, spend, but only after some is set aside for savings. Its how we did things for a long time and it was when we forgot about it that we got in to trouble.
The short term effect, though, is not good – as Big Corporation lives by continually increasing profits (as opposed to a more healthy make-smaller-but-very-steady-profits), the fact that there won’t be a big increase in profits off of holiday sales will prove another drag on economic recovery (if we’re even in one right now). The only reason we even got the sales we had this black Friday was because of steep discounts – meaning, less profits. Corporations will resume being gun shy about hiring and investment – and if Congress refuses to extend the Bush era tax cuts, then we’ll have this even more.
More interesting times coming, boys and girls.
HAT TIP: Mish’s
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