Black Friday spending falls 11% as consumers stay home
Holiday shopping is spread out over a longer period amid competitive retail environment
U.S. consumers were unmoved by the deep discounts promised by Black Friday, and cut their spending by 11 per cent on what is usually the biggest shopping weekend of the year.
The National Retail Federation released the disappointing results Sunday, estimating total spending for the weekend was down 11 per cent to $50.9 billion US from an $57.4 billion last year.
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There were fewer shoppers as well, a 5.2 per cent drop to 133.7 million people over the four-day holiday weekend for U.S. Thanksgiving.
Now retailers are hoping Cyber Monday may help make up part of the shortfall, with online discounts expected to lure shoppers today.
Retail analysts say the news isn’t all bad. Retailers such as Walmart, Target and Amazon began offering their deep discounts on electronics and clothing a week earlier, so consumer spending is being spread over a longer period.
Some of holiday shopping is moving online, with both Walmart and Target reporting record online sales for the weekend.
Online shopping up
So far, holiday shoppers have spent $22.7-billion online this season, up 15 per cent from a year earlier, according to ComScore Inc. That includes more than $1.5-billion on Black Friday.
Retailers call Dec. 1 Cyber Monday and encourage online deals on the day, with 127 million Americans expected to shop online today.
But Black Friday has been considered a key to a successful holiday season in U.S. retail and this year’s slower sales mean they’ll have to step up efforts to encourage spending in the rest of the month.
This is the second year that Black Friday shopping has fallen short of expectations. Last year, retailers were cutting prices in the weeks before Christmas in an effort to kickstart holiday spending.
NRF CEO Matthew Shay predicted a “very competitive season” for retailers in 2014.
Consumers expect discounts
Although consumers may have more money in their pockets because of lower gas prices, they are cautious about spending as wages are not rising. They also have become used to an environment of continual discounting because of the fierce competition in the retail sector.
For many shoppers, though, the excitement of Black Friday sales may be over. They`re still digesting Thanksgiving turkey and don`t want to stand in line for bargains.
Theyknow they can get discounts throughout the holiday season, 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.”