195 Million Shoppers Turn Out for Thanksgiving Weekend Deals
According to the National Retail Federation, "Black Friday" shoppers turned out in droves this year, but were only willing to open their wallets/purses if they saw a deal that was too good to pass up.
According to preliminary data compiled by the National Retail Federation, consumers spent $343 per person over the Thanksgiving holiday weekend (Thanksgiving Day to Sunday), which was down about 8% from last year.
Consumers, according to the NSF, were focused on purchasing heavily discounted items that they had flagged for purchase in advance. Upon purchasing these items, the average consumer this year then departed the stores, their mission having been accomplished.
In past years, consumers would be drawn to stores for the deals, but would also end up purchasing a number of more expensive items on their way out of the store.
This is how "loss leaders" work - retailers will offer certain products at a low price (cost or even below cost) in order to draw people into their stores, with the hope that these customers will walk out of the store having purchased some of the more profitable (for the store) items.
For the most part, this didn't happen over Thanksgiving, as the American consumer had the discipline to stick to their plan of purchasing the heavily discounted items and then leaving the premises.
American consumers also continued to flock to online retailers in their search of great deals, as both Amazon.com and Walmart.com reported large jumps in traffic compared to last year.
The takeaway seems to be that foot traffic was very solid over the Thanksgiving weekend (traffic to stores and websites rose to 195 million people from 172 million the year before), but that consumers were largely focused on deeply discounted items.
Retailers (and retail associations) will certainly focus on the fact that over 195 million Americans engaged in some sort of shopping this past holiday weekend. This is up substantially from years past.
The bad news? The average spend was down considerably from 2008, as consumers largely focused on the deeply discounted, low profit margin items.
I would expect this trend to continue for at least the next couple of years, as the mindset of the average American consumer has been (permanently?) altered due to the "Great Recession".
The big question now becomes - is frugality here to stay?
Source: Reuters.com - Shoppers Spent Less Over Black Friday Weekend
Filed under: General Market News