Spending tumbled an estimated 11 percent over the weekend, the Washington-based National Retail Federation said yesterday. And more than 6 million shoppers who
had been expected to hit stores never showed up.
Consumers were unmoved by retailers’ aggressive discounts and longer Thanksgiving hours, raising concern that signs of recovery in recent months won’t endure. The NRF had predicted a 4.1 percent sales gain for November and December -- the best performance since 2011. Still, the trade group cast the latest numbers in a positive light, saying it showed shoppers were confident enough to skip the initial rush for discounts.
“The holiday season and the weekend are a marathon, not a sprint,” NRF Chief Executive Officer Matthew Shay said on a conference call. “This is going to continue to be a very competitive season.”
Consumer spending fell to $50.9 billion over the past four days, down from $57.4 billion in 2013, according to the NRF. It was the second year in a row that sales declined during the post-Thanksgiving Black Friday weekend, which had long been famous for long lines and frenzied crowds.
Doorbuster Deals
Retailers rolled out their usual doorbuster specials in a bid to lure customers. Wal-Mart Stores Inc. sold an RCA tablet for $29, DVD movies for $1.96 each and a 50-inch high-definition television for $218. Best Buy Co. had a 55-inch Samsung 4K television for $899, hundreds less than its usual price.Even so, many shoppers stayed home. The NRF had predicted that 140.1 million customers would visit retailers last weekend, a small decline from last year’s 140.3 million. Instead, only 133.7 million showed up.
An effort by some retailers to put items on sale ahead of Thanksgiving may have contributed to sluggish demand on Black Friday, Shay said.
The slower foot traffic means retailers will have to wring more money from consumers in December, including during today’s Cyber Monday e-commerce blitz. Holiday shopping is key for retailers -- with sales in November and December accounting for about 19 percent of annual revenue, according to the NRF -- and more of that is shifting online.
Cyber Monday
The Web may not be a savior for traditional retail, though. While e-commerce orders are growing, they’re still dwarfed by brick-and-mortar sales. The novelty of Cyber Monday also is dimming: The number of shoppers participating in the event today is projected to decline.So far, holiday shoppers have spent $22.7 billion online this season, up 15 percent from a year earlier, according to ComScore Inc. That includes more than $1.5 billion on Black Friday.
The e-commerce growth means shopping malls have to work harder to get people in the door. The University Town Center -- a brand-new mall in Sarasota, Florida -- was only moderately busy on Saturday evening, with more customers in the corridors than in the stores.
Ariana Bravo, a 16-year-old student from Lakewood Ranch, said she used her employee discount at Pacific Sunwear to buy a couple small items, but wasn’t lured by any promotions.
“It seems like they’re the normal sales that they already have, just all in one day,” she said.
Family Time
Even as an improving job market and lower gas prices have sent consumer sentiment to its highest level since the recession, many Americans are keeping a lid on Christmas shopping. Another customer at the Florida mall, Jotasia Walker, said her family draws names and gets one gift per person, rather than buying presents for everyone. The 21-year-old, who was visiting the mall with three sisters, two cousins, a niece and a nephew, said they came out more to spend time together than to shop.The average shopper spent an estimated $380.95 over the weekend, a 6.4 percent drop, according to an NRF-commissioned survey of more than 4,600 people by Prosper Insights & Analytics.
Retailers also had to contend with demonstrations from protesters angered by the decision not to indict a white police officer in the killing of an unarmed black teenager in Ferguson, Missouri. Events were held at stores and malls nationwide on Black Friday, with some of the protests leading to brief standoffs with police. Demonstrators also called on consumers to boycott stores.
Recession Hangover
The industry’s focus now shifts to Cyber Monday, when e-commerce sites release another wave of discounts. Almost 127 million Americans will shop online today, Prosper predicts, down from 131.6 million a year earlier. That lends evidence to the notion that Americans are less enticed by one-day sales events.Many consumers also don’t feel like the economy has recovered from the recession yet, Shay said. That makes it difficult to gauge how much they plan to spend.
“The challenge is looking for a new equilibrium, and we just haven’t found it,” he said.
Retail chains have spruced up their websites in recent years, though they’ve struggled to keep pace with Amazon.com Inc. Sales at Amazon, the world’s largest online retailer, jumped 46 percent on Saturday and 24 percent on Black Friday, according to ChannelAdvisor Corp. That exceeded total e-commerce growth on those days, the research firm found.
Fuel Costs
Cheaper gasoline prices, meanwhile, are working in the retail industry’s favor. The average cost of a gallon of regular gasoline was $2.81 last week, the lowest in four years, according to the automobile group AAA. That’s leaving more money in shoppers’ wallets -- and making it less expensive to take a trip to the mall.For many shoppers, though, the excitement of Black Friday sales may have simply worn off. Consumers know they can get discounts throughout the holiday season and are adjusting their shopping accordingly, said Simeon Siegel, a New York-based analyst at Nomura Holdings Inc.
“You can’t outsmart the consumer anymore,” he said. “You need to pander to where the consumer wants to shop and when.”
For Related News and Information: Worst Back-to-School Sales Growth Stokes Concern About Holidays Retailers’ Third-Quarter Sales Gains Fuel Optimism for Holidays Holiday Sales Seen Rising Most Since 2011 on Job Gains Bloomberg Intelligence 2015 Retail Outlook
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