The holiday shopping season officially began at midnight Friday morning. Early signs were encouraging as crowds gathered to take advantage of huge sales and deeply discounted prices designed to lure in shoppers. The plan may have not have worked as intended, however. Shoppers came, but spending on Friday was virtually unchanged from the previous year, according to ShopperTrack RCT Corp. which tracks total sales at more than 45,000 retail outlets.
The ShopperTrack data indicates total sales dropped 0.9 percent to $8 billion from a year ago. One bright spot, the Associated Press reports, was Wal-Mart, the giant discount chain is reporting that sales exceeded expectations. Reuters reports that J.C. Penney also exceeded expectations for Friday.
“Although the Black Friday number is a bit flat, this may be misleading as we’re comparing this to a very strong 2004 performance,” Michael P. Niemira, chief economist and director of research for the International Councils of Shopping Centers said in a statement to the Associated Press.
The holiday shopping season is important because it accounts for a quarter of annual retail sales in a typical year, according to Reuters. It is also a key factor in shaping the seasonal cycle, which in turn impacts the business cycle, according to a statement from the International Council of Shopping Centers.
“If we see (after Thanksgiving) sales growth over 5 or 6 percent, that’s a very positive indication of a good holiday season, if they can sustain it,” Darrell Rigby, head of Bain and Company, a global retail practice for consultants told Reuters.
Flat Friday sales do not appear to worry the National Retail Federation, who recently raised sales forecasts a full percentage point for both November and December. The projected 6 percent gain, however, is still down from the 6.7 percent rate seen in 2004. Other experts point out that the Friday after Thanksgiving is only the second busiest shopping day of the year, behind the day before Christmas, as more and more consumers wait until the last minute to do their holiday shopping.
“While Black Friday is important to retailers, it’s not always the best indicator for consumer shopping patterns during the remainder of the holiday season, which should allow the retail industry to continue feeling optimistic,” Niemira told Reuters.
Another relatively new factor is online shopping. The big day for cyber shoppers is the Monday, not the Friday after Thanksgiving. Dubbed Cyber Monday, the Indianapolis Star reports it is fast becoming one of the biggest online shopping days of the year with more than 80 percent of online retailers reporting increased sales volumes on that day last year according the National Retail Federation.