By now, you're sick of the financial press talking about Black Friday. This is, of course, the day after Thanksgiving. The name of the day supposedly came about because that is the day when retailers go from being in the red to being in the black for the year.
Of course, that's nonsense. Most retailers now have earnings, not losses, in the quarters before Black Friday.
Another thing you'll hear is how critical Black Friday is for retailers. Without strong sales on this day, you'll hear, the holiday shopping season will be weak.
According to some analysts, sales are probably meeting or exceeding expectations. The National Retail Federation said that heavy promotions drove strong consumer traffic. There are reports of individuals waiting as long as 20 hours in order to take advantage of discounts.
And traffic at malls run by Taubman Centers was up by about ten percent versus last year, the company said.
However, the lines were driven by customers seeking deep discounts. Obviously, deep discounts yield lower profits for retailers. While we likely won't see the discounts that we saw last year, where companies like Saks cut their prices by as much as 60 percent and offered extra points to its most loyal customers.
Still, for all the hype about Black Friday, the day isn't even the most busy shopping day. That day is usually the last Saturday before Christmas. And an analysis done for the Washington Post by a retail analyst found that there's very little correlation between Black Friday sales and the overall holiday season.
So, investors would be well advised to not listen to the hype about Black Friday. It's one day in a long holiday shopping season, and a lot can happen between now and Christmas.
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Of course, that's nonsense. Most retailers now have earnings, not losses, in the quarters before Black Friday.
Another thing you'll hear is how critical Black Friday is for retailers. Without strong sales on this day, you'll hear, the holiday shopping season will be weak.
According to some analysts, sales are probably meeting or exceeding expectations. The National Retail Federation said that heavy promotions drove strong consumer traffic. There are reports of individuals waiting as long as 20 hours in order to take advantage of discounts.
And traffic at malls run by Taubman Centers was up by about ten percent versus last year, the company said.
However, the lines were driven by customers seeking deep discounts. Obviously, deep discounts yield lower profits for retailers. While we likely won't see the discounts that we saw last year, where companies like Saks cut their prices by as much as 60 percent and offered extra points to its most loyal customers.
Still, for all the hype about Black Friday, the day isn't even the most busy shopping day. That day is usually the last Saturday before Christmas. And an analysis done for the Washington Post by a retail analyst found that there's very little correlation between Black Friday sales and the overall holiday season.
So, investors would be well advised to not listen to the hype about Black Friday. It's one day in a long holiday shopping season, and a lot can happen between now and Christmas.
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