Amid a lagging economy and high unemployment Black Friday sales were up 6.6 percent from last year, which many are taking as a good sign for today's Cyber Monday mayhem and the rest of the shopping season, but those numbers are less optimistic than they sound. Just because people came out for the sales on Black Friday, doesn't mean the trend will continue or that the economy is getting any healthier.
The numbers themselves don't exactly tell the whole story. Stores reported higher earnings for two reasons that don't have much to do with the economy: Internet and longer shopping hours, as The Wall Street Journal's Dana Mattioli and Stu Woo note. Those who might otherwise have abstained from the mall craziness went to the Internet for buying. Online shopping sales were up between 24 and 26 percent this year and the National Retail Federation estimates that of the average $398.62 each consumer spent on Friday, 38 percent came from online sales. In addition to an Internet influx, this year certain stores like Macy's and Best Buy decided to open doors at midnight Thursday night. More time available for shopping of course would correlate with bigger sales and don't necessarily reflect a growing economy.
And just because people showed up for sales on Friday doesn't mean they'll keep it up throughout the holiday season. The last biggest Black Friday, as USA Today's Jayne O'Donnell notes happened back in 2008, right after the economy crumbled. Some indicator that was. Unemployment still hovers just below 10 percent and we might see another recession in 2012. Shoppers turned out in such big numbers that year because retailers hacked prices as much as 80 percent to lure fearful and frugal customers. While the market jumped 800 points the following week, points out Seeking Alpha's Seth Mason, the rest of the holiday shopping season didn't go so well. And here we are today, not exactly out of the recession.
Like in 2008, this year's Black Friday may be more about deals than consumer confidence. At least retailers claim that buyers have a similar outlook as 2008, report Mattioli and Woo. "Retailers cautioned that consumers remain frugal, and they said they aren't certain the opening weekend's pace can be maintained," they write. To keep up said pace, stores have started a sort of race to the bottom. Merchants often save their most bad-ass deals for Cyber Monday. But given that so many already visited the Internet this weekend to do holiday shopping, stores will have to have even better offers to convince customers to come this Monday. And the deals won't end today. Fearful of losing customers altogether, stores like The Limited will offer crazy deals throughout the holiday season, Limited CEO Linda Heasley told Mattioli and Woo.
This article is from the archive of our partner The Wire.
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