The Big Picture

« Happy Thanksgiving! | Main | Who Are Online Financial Readers ? »

Black Friday

Friday, November 23, 2007 | 08:25 AM

One of the things that any student of psychology can tell you is that what we intend to do and what we actually do are often miles apart.

To wit: the plethora of surveys this time of year asking people what their intentions are for the holiday shopping season. There are a myriad of flaws in this approach, ranging from well-intended estimatees that turn out to be wildly off to self-aggrandizing respondents whose self-deception significantly skews these surveys.

For example, we previously mentioned Conference Board's survey: "U.S. households are expected to spend an average of $471 on gifts during the holiday season, up from last year's estimate of $449."

All this tells us is that when asked, people say they believe they will spend $22 more than last year. What it does not reveal is how much they will actually spend, or how retail stores are doing in their 2007 holiday sales. Many people who cite these surveys often fail to mention that small but important tidbit.

The former grand-daddy of relying on bad surveys, the National Retail Federation (NRF), seems to have found religion this year.

Citing Economic Concerns, NRF Forecasts Holiday Sales Gains of Four %
The National Retail Federation today released its forecast for the upcoming 2007 holiday season, predicting that sales will rise 4.0 percent this year to $474.5 billion*.

“Retailers are in for a somewhat challenging holiday season as consumers are faced with numerous economic obstacles,” said NRF Chief Economist Rosalind Wells. “With the weak housing market and current credit crunch, consumers will be forced to be more prudent with their holiday spending.”

The 2007 holiday sales increase is expected to fall below the ten-year average of 4.8 percent. It would represent the slowest holiday sales growth since 2002, when sales rose 1.3 percent.

I would suspect that many retailers will be thrilled if they can cajole a 4% gain in sales this year. The discounting has been fast and furious, led by Wal-mart, who cut prices on over 15,000 items, and did so around Halloween -- way earlier than usual.

The nervousness is apparent not just in the discounting (see: Retail Desperation on Display in Early Hours), but in the increasing race to open earlier and earlier on Black Friday. The ultimate early gambit: Moving BLACK FRIDAY to Thanksgiving day:

By staying open on the holiday, those retailers got a head start on their competitors — though not by much. Other national chains, including Kohl’s and J. C. Penney, rolled back the start of their after-Thanksgiving sales to 4 a.m. Some stores that remained closed yesterday, including Circuit City and Best Buy, encouraged consumers to spend part of the holiday shopping online by offering special deals just for the day.

Thanksgiving used to be one of the few “untouchable days,” along with Christmas, said Doug Fleener, president of Dynamic Experiences Group, a consulting firm in Lexington, Mass. “It’s one of the few days that the retail employees should get to spend with their families.”

Indeed, in Massachusetts it is illegal for stores to open on Thanksgiving. But around the rest of the country in the last several years, more stores have chosen to try competing with holiday rituals, Mr. Fleener said.

- Rising Early, Not to Start the Turkey, but to Shop

Since I'm in Chicago for the holidays, we usually go to shops we cannot get to in NY -- like the Land's End Outlet store. But that's a visit for Friday, not Thanksgiving Day.

Its bad enough that the crass commercialization of the holiday season now reaches back to before Halloween, but opening on Thanksgiving is more than tacky -- it reeks of desperation . . .

Sources:

Citing Economic Concerns, NRF Forecasts Holiday Sales Gains of Four Percent
NRF, September 20, 2007
http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=370

Retail Desperation on Display in Early Hours
MICHAEL BARBARO
NYT, November 23, 2007
http://www.nytimes.com/2007/11/23/business/shopWEB.html

Rising Early, Not to Start the Turkey, but to Shop
PATRICK McGEEHAN and NATE SCHWEBER
NYT, November 23, 2007
http://www.nytimes.com/2007/11/23/nyregion/23stores.html

Consumers Slow to Start Holiday Shopping, According to NRF Survey
NRF, September 12, 2007
http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=408

Consumers in a Festive Mood as the Holiday Season Approaches
Conference Board, Nov. 20, 2007
http://www.conference-board.org/utilities/pressDetail.cfm?press_ID=326