According to ShopperTrak – the world’s foremost provider of shopper traffic counting information, technology and decision support software for businesses in the retail, gaming, hospitality and entertainment industries – Black Friday sales were up 3 percent this year over 2007.
That’s right. With all of the news coverage about bailouts, mortgage failures, bankruptcy filings, and financial devastation – Americans spent 3 percent more this year than they did last year.
Here’s the full press release from ShopperTrack –
CHICAGO – November 29, 2008 – Despite a lagging economy that has left the retail industry collectively holding its breath, ShopperTrak RCT today reported the holiday shopping season got off to a healthy start as GAFO retail sales increased 3.0 percent over 2007 – a day which increased more than 8.0 percent from Black Friday 2006. Preliminary sales estimated at a daily rate for Black Friday totaled $10.6 billion or $10,606 million.
While ShopperTrak warns that Black Friday isn’t always the best indicator for holiday season performance, retailers should be cautiously optimistic as deep discounts drove consumers en masse to various retail locations to spend – despite myriad economic pressures seen over the last two months.
“Retailers truly experienced what we’ve dubbed the ‘perfect storm’ over the last few weeks, with the financial markets melting down, the presidential election which typically slows retail traffic and relatively high gasoline prices – all of which slowed both retail traffic and spending,” said Bill Martin, co-founder of ShopperTrak. “Under these circumstances, to start off the season in this fashion is truly amazing and is a testament to the resiliency of the American consumer, and undeniably proves a willingness to spend.”
Retail traffic was heavy throughout the country as shoppers responded to early openings and numerous door buster specials and sales promotions. Regionally, the South lead the way with a 3.4 percent rise over 2007, with the Midwest (+3.0 percent), West (+2.7 percent) and Northeast (+2.6 percent) closely following.
“While this is an encouraging start for retailers, there’s no guarantee these deep discounts will continue after Black Friday weekend, which could slow spending,” said Mr. Martin. “Additionally, consumers have just 27 days to shop this year as opposed to 32 in 2007, which may catch some procrastinating consumers off guard, leading to lower sales levels.” Martin continued: “Needless to say, retailers will be closely watching this trend and most likely adjust as needed heading into the annually strong Saturday before Christmas, or Super Saturday.
Information supplied by the National Retail Sales Estimate (NRSE), Retail Traffic Index (SRTI) and ShopperTrak RCT Corporation.
Here’s the part of this article that bothers me, just a bit –
“Retailers truly experienced what we’ve dubbed the ‘perfect storm’ over the last few weeks, with the financial markets melting down, the presidential election which typically slows retail traffic and relatively high gasoline prices – all of which slowed both retail traffic and spending,” said Bill Martin, co-founder of ShopperTrak. “Under these circumstances, to start off the season in this fashion is truly amazing and is a testament to the resiliency of the American consumer, and undeniably proves a willingness to spend.”
I have to tell you, this reports bothers me, just a bit. Sure, I’m happy that the economy (might) be in a little better shape than we have been led to believe, but if people are struggling, shouldn’t we all be spending less and not more?
What do you think? Is this a good thing and a sign of a recovery? Or, do you think that people flooded the stores, bought as much as they could for as little as possible, and the rest of the holiday shopping numbers will be down? Or, are people simply ignoring the current financial crisis and choosing to shop, shop, shop? What about you and yours? Are you cutting back? Are you buying less? Are you buying more?
Personally, I’d love to see people adopt lifestyles that were a bit more frugal. I realize that moving towards a more frugal society will hurt in the short-term, but imagine the long-term benefits. My wife and I, wanting to add a bit more to our non-retirement savings, have decided to reduce Christmas spending by about 25%.
This report is quite astounding. I think maybe the “big depression” isn’t quite as bad as the media makes it out to be. Regardless, I also think there are a lot of consumers with their heads in the sand.
@ABCs It will be interesting to see if this continues for the whole holiday season… if it does, then the “depression” talk may have been just hype…
My wife and I are spending the same as usual. We both have jobs, we have savings, no debt, and our retirement accounts were diversified though we still lost money. So what recession? What depression? With all the Federal deficit spending the only thing to watch out for is inflation. Thanks for a great blog, I read your every post.
a testament to the resiliency of the American consumer, and undeniably proves a willingness to spend… yeah, that part is bothersome huh. No matter how gloomy our financial outlook is the American consumer is undeterred. Scary.
But my gut is one of two things… either people are being more price conscious in an effort to save money, or things aren’t as bad as the news is making it out to be.
It almost sounds like a political speech meant to inspire and encourage further support from their chief constituents – the shopaholics.
As well as convince any naysayers, or those who are sitting on the fence that they should spend more instead of saving.
Nice find!
The American consumer does not have a habit of doing financially responsible things. This story is a testament to the media adding more fuel to the irresponsible fire. Shop shop shop, spend spend spend, credit credit credit. That’s the mantra of the average American. That’s why the average American family has $8000 in credit card debt and why America as a team has almost 2 trillion in consumer debt.
The devil is always in the details. One only has to look at the -trend- to see the decline. 2007 increase was 8.3% sales growth y/y. This black Friday was a sales growth of 3.0% y/y.
That is a 5.3% drop in annual y/y growth for the same reporting period.
@Chuck Yes, but the 8.3 was a record increase… and, ANY increase, to me, flies in the face of most of the recent economic “news”…
Personally, I do not put much weight into all of these so-called “economic indicators”. The University of Michigan consumer confidence indicator and the retail reports such as this one are bunk in my opinion simply because people are irrational and take everything to extremes. When the market is suffering, people panic and sell everything causing the market to tank. On Black Friday, the deals are too good to pass up, due to lack of planning or self control or whatever you may think, and they tend to overspend. Regular people have no clue as to what makes the economy work, and most will admittedly tell you that they only know what they are told by the media, so consumer confidence levels are skewed. I honestly think if each person/family worried about their own situation and got a handle on their own finances, the rest would take care of itself.
I thought about this a lot when the economic stimulus packages went out and we all got IRS checks. My initial impulse was to stuff that money in my retirement savings but what made me pause was whether or not that was the ethical thing to do. It was meant to be spent, in order to help charge the sluggish economy. If everyone simply saved their check, it would have been for naught.
I ended up investing it all in the end, though I’m still undecided about whether that was the ethical thing to do.
I participate in Buy Nothing Day (http://www.adbusters.org/campaigns/bnd) so I wasn’t contributing to the spending on Black Friday.
There are lies, there are damn lies, and there are statistics.
Has anyone considered that the price of consumer goods is up from last year, due to other factors like the cost of borrowing and the cost of transportation to distribute these goods?
People have complained on other forums that the Black Friday sales offerings weren’t as generous as in past years. Yet consumers spent more. That just tells me that things costed more this year. I’m only very cautiously optimistic . . .
old habits die hard. i said that the spike in personal savings rate a few months ago was people saving for the holiday’s, and it looks to be right. plus, habits are hard to kill. people will probably actually spend more this year than last year because, we are compulsive shoppers at the end of the day, so we will buy more because all we see is everything is on sale. so americans will end up buying lots of stuff on sale which will bust their budgets. a ton of feathers equals a ton of lead, it is just how we perceive how much we are spending to what we actually spend at the end of the day that differs. this doesn’t mean that retailers will win, because the margins will have been cut very low, so they will need higher sales volume to churn a profit.
I had the same reaction when I read that article. I wanted to see that consumer spending was down as a reflection that we had learned our lessons and were going forward more responsibly. We can argue as to whether a recession/depression truly exists but we can not argue with the layoffs and foreclosures.
People are hurting, they shouldn’t be spending. I wonder if they are spending as a reflection of what’s going on, as in “we lost our house and our jobs but at least we are going to have a good Christmas”. If that’s the case, it’s pretty short-sighted and means families are not pulling together and scaling back Christmas.
I’m afraid it means that lots of people are just not willing to change their spending habits.
Yeah, I’m not so sure that this report is 100% either, but I choose to look at in a win/win light. On one hand, an increase in spending would greatly help restore a little confidence in the American economy and deter additional job cuts. On the other hand, if the report isn’t accurate then hopefully Americans have begun to tune in to the times and are cutting spending. Cheers!
I thought this was an indication that people are trying to get the best price for items when the sales are good…if sales continue up then I am wrong. We draw names in our family and decided to drop the $$ amount in half. I also use a Christmas Club to save up for the holiday each year. Enjoy your blog.
Ok sales were up 3%, but isn’t inflation this year more then 3%? so that actually means that spending is down.
The economy is built on confidence, and while this indicator may not be a ‘real’ indicator of economic health, it certainly doesn’t help. If people believe things are getting better, that they will make more money, have more to spend, etc., things improve.