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Despite a stubbornly high 9 percent unemployment rate and dwindling home values, Friday could mark the biggest single shopping day in US history.
But believe it or not, that isn’t necessarily a good thing for stores.
Dangling deep discounts on everything from Barbie dolls to Gap jeans and big-screen TVs, retailers will ring up a slew of one-day sales records on the day after Thanksgiving, according to the America’s Research Group consultancy.
But the surge — which many industry watchers predict will top last year’s Black Friday sales record of $10.69 billion, as recorded by ShopperTrak — will be fueled by rock-bottom prices that sap retailers’ profit margins, according to Britt Beemer, president of the Charleston, S.C.-based consulting firm.
“Black Friday is looking good this year mainly because the prices on big-ticket electronics have gotten so cheap that anybody can afford them,” according to Beemer, who predicts a smaller-than-average sales increase for the holiday season overall.
Indeed, a brutal price war between Walmart and Best Buy has spawned Black Friday bargains including 42-inch flat-panel TVs for $199, and laptop computers for $299 — well below the $400-to-$500 range seen for such big-ticket electronics during the past few years.
That, in turn, is expected to lure a wider but less potentially lucrative swath of the nation’s shoppers on Black Friday.
Gerrick Johnson, an analyst at BMO Capital Markets, expects overall toy sales will be flat during the holidays.
“Retailers are being more cautious than ever this year,” Johnson says, adding that “there is no hot product” in toys, although demand for Barbie dolls, Smurfs and Legos is relatively brisk.
More than 152 million consumers are expected to swarm into stores during the post-Thanksgiving Day weekend, according to the National Retail Federation. That would be the biggest crowd ever, up a very healthy 10 percent from last year’s 138 million.
In addition to slashing prices, retailers this year also have been extending store hours. While Target has drawn employee protests with a plan to open stores at midnight, Walmart is set to open its doors two hours earlier, at 10 p.m. on Thanksgiving.
“Retailers have effectively expanded Black Friday beyond that 24-hour period,” says Joseph Welter, Northeast consumer business practice leader at Deloitte & Touche LLP, noting that retailers are likewise going online to stage more sales events on Thanksgiving Day and even earlier.
“The bet is that folks are willing to go online during the downtime between football games and dinners,” Welter said.
Of shoppers who plan to hit stores during the post-Thanksgiving weekend, two-thirds say they will brave the Black Friday crowds, according to a Deloitte survey.
“That’s a big jump up from last year,” and partly reflects the new, around-the-clock store hours, Welter said.