Not Sold on Black Friday
11/25/2011 12:01 am EST
Rather than starring as extras in retailers’ marketing pitch, consumers would do better to hold out for better deals come January, writes MoneyShow.com senior editor Igor Greenwald.
It’s been a surprisingly good year for the retail trade, with sales consistently outperforming low expectations. Despite high unemployment, stagnant incomes, and the drastic slump in consumer confidence, we’ve proven to be inveterate shopaholics, thrift be damned.
But there are real reasons to doubt whether this addiction will carry over into the holiday shopping season, the annual spending orgy that makes or breaks the year for the retailers. The National Retail Federation says holiday sales accounted for 19.4% of the industry’s total in 2010, meaning the sales pace roughly doubles and then some this time of year.
The NRF expects this year’s holiday sales to rise 2.8% over 2010, roughly in line with the ten-year average of 2.6%. Meanwhile, a survey conducted by the Consumer Federation of America found 41% intent on spending less last year, while only 8% planned to spend more, down from a 10% reading for the realists last year.
Hence there’s a little bit more desperation in the air than usual, with Black Friday sales at many retailers now infringing on turkey, to the chagrin of the many workers being asked to sacrifice holiday time with family.
Whether or not consumers really want to shop at midnight, the retail chains desperately need the promotion those early door-busting mobs provide. They need to gin up the sense that everyone is shopping, because as the holiday approaches, bargaining leverage gradually shifts from the merchant to the procrastinating shopper.
Take away social pressure, and we might well skip the gifts (as a growing minority is doing already). Or stick to gift cards that will get redeemed when the unsold Christmas inventory goes on clearance sale.
I hate shopping on Black Friday. The deals aren’t worth the hassle, and aside from those early door-busters they’re about as good as the car dealer’s initial offer. Unless one is after a potentially scarce item, it doesn’t pay to be early.
This year especially, a better deal might be secured by shunning some chains entirely, not as a political boycott but as a bargaining tactic. Desperate retailers abound, from squeezed middle-class has-beens like JCPenney (JCP) to the hobbled teen fashion horse Abercrombie & Fitch (ANF), which has already acknowledged a surplus of holiday merchandize and is just begging to be waited out.
Admittedly, this tactic won’t be successful everywhere. The financier in charge of Sears (SHLD) plainly doesn’t care whether anyone ever shops there again. Urban Outfitters (URBN) has stocked fashions no one will want even at a fraction of the price.
Your nephew doesn’t want that sweater anyhow. Spare him the chore of returning it.