In days gone by, Black Friday – the name given to the day after Thanksgiving – was the start of the holiday shopping season and was the day of the year that saw the greatest dollar volume of retail sales. The term “black” comes from the accounting world and recognizes that sales were not “in the red” but were “in the black.”
Over the years, to boost sales on Black Friday, retailers began to open earlier. Instead of the traditional 9am or 10am opening hour, stores would open at 8am, then 6am, then midnight. This year, the sanctity of Thanksgiving Day itself is being violated. Some stores will open at 10pm Thursday.
The reality is that the holiday shopping season begins earlier and Black Friday is, for the most part, just another shopping day. Whether it is this item or that gadget, they will likely be available when the stores open as well as at 3 o’clock in the afternoon later that day. Nonetheless, in circus-like fashion, some shoppers camp out at store entrances – tent and all – in an effort to be among the first to enter the store.
Of course, the popular news media love such outrageous stories. While these stories are in fact anecdotal, the average viewer of the news might see the circus and believe that retail sales must be robust. The weekly retail sales numbers speak differently. In recent months, year-over-year growth in retail sales has trended lower. Currently, after an adjustment for inflation, real growth is bouncing between break-even and down. With two-thirds of the US economy driven by consumer spending, what will the year’s biggest shopping season yield for the economy? Will slowing sales affect jobs growth? How will this translate for retail stocks? This year’s holiday shopping season will likely be a little less bright.