Black Friday Postmortem

Now that the takings from the first post-Thanksgiving weekend have been tallied, the question is: Did the holiday shopping season get off to a good start?

The answer depends on whom you ask.

According to AP, shoppers did indeed cram the stores on Black Friday, but for the most part they limited themselves to highly discounted merchandise. “There was a lot of hype, a lot of promotions, and lot of people, but the results were on the lukewarm side,” Michael P. Niemira, chief economist at the International Council of Shopping Centers (ICSC), told AP. He estimated that this year’s post-Thanksgiving weekend sales were down from last year’s.

Data from ShopperTrak RCT Corp. confirms his estimation. Its National Retail Sales Estimate put Black Friday sales at $8.01 billion, down nearly 1% from last year.

But the National Retail Federation (NRF) contends that year-over-year weekend spending was up 22%, to $27.8 billion. “As expected, retailers offered substantial discounts and savings on Black Friday to bring people into their stores and consumers held up their end of the bargain by going shopping,” NRF president/CEO Tracy Mullin said in a statement. “Even though many retailers saw strong sales this past weekend, companies will not be basking in their success. Stores are already warming up for the next four weeks because the holiday season is far from over.” The NRF projects that this year’s holiday sales will rise 6% from last year, to $439.5 billion.

In fact, despite his characterization of the opening weekend as “lukewarm” in terms of sales, ICSC’s Niemira in a statement noted that “although the Black Friday number is a bit flat, this may be misleading as we’re comparing this to a very strong 2004 performance. While Black Friday is important to retailers, it’s not always the best indicator for consumer shopping patters during the remainder of the holiday season, which should allow the retail industry to continue feeling optimistic. With the extra Saturday this season, added to the continued influence of high energy prices, the consumer may just be waiting until later to begin their holiday spending.”

According to ShopperTrak, last year Black Friday was only the second busiest shopping day of the season; the Saturday immediately prior to Christmas was the busiest.

And while today, so-called Cyber Monday, is expected to be one of the busiest days for online shopping, the Holiday eShopping Index of Nielsen/NetRankings reported a 29% year-over-year rise in traffic to online shopping sites on Black Friday. “While many shoppers headed out to the stores over the weekend, the majority first turned to the Internet to check prices and product availability,” Heather Dougherty, Nielsen/NetRatings senior retail analyst said in a statement. “Now that the 2005 holiday shopping season is under way, traffic to retail sites will climb as shoppers head back to work on Monday ready to make headway on their holiday shopping lists.”

What none of the trade groups or mainstream media are reporting, however, is the effect that the deep discounting, free shipping, and other promotions will have on the bottom line. Black Friday got its name because it was the day that retailers traditionally got out of the red and became profitable for the year. It remains to be seen if, despite promotion-assisted boosts in sales, just how profitable this holiday season will be.