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Does it matter that Black Friday sales were down?

December 1, 2014Written by Tom Ryan

By all indications, Black Friday weekend sales and traffic fell modestly to sharply. The decline — occurring despite an expansion of Thanksgiving evening shopping hours by many stores — either represented an omen for a subpar holiday season or another indication of how early promotions, e-commerce and savvy shoppers are transforming holiday selling.

According to the National Retail Federation's (NRF) estimates:

Overall shopper traffic from Thanksgiving Day through Sunday, Nov. 30 dropped 5.2 percent to 133.7 million unique shopper visits versus the 2013 period;
Total shopping, including multiple trips by the same shopper, declined 6.2 percent to 233.3 million;
The average person who shopped spent $380.95 over the holiday weekend, down 6.4 percent from $407.02 last year.
Total spending was down 11.3 percent to $50.9 billion.

The projections were based on a poll of 4,631 consumers conducted on Nov. 28 and 29 by Prosper Insights & Analytics.

"A strengthening economy that changes consumers' reliance on deep discounts, a highly competitive environment, early promotions and the ability to shop 24/7 online all contributed to the shift witnessed this weekend," said NRF president and CEO Matthew Shay, in a statement.

On a conference call with the media Sunday, Shay admitted it was challenging to determine what factors carried the most weight in causing the weekend drop.

Clearly, early promotions, which were pervasive online, pulled sales away from the holiday weekend, Shay said, referencing his conversations with retail execs. Retailers brought out promotions earlier partly to entice consumers in the competitive landscape but also because they lost two weeks in 2013 due to inclement weather and "ran out of selling days."

While the economy is strengthening with the aid of lower gas prices, a healthy stock market, and rising home values, a "bi-furcation" of consumers is working against the holiday weekend, Shay added. With growth still not at the mid-single digit rate seen in pre-recession years, some households still "don't feel great about the economy" and are restraining their spending.

On the other hand, the households that feel better with the economy's improvement are "somewhat less reliant" on Black Friday weekend deals. Said Shay, "In the absence of a crisis mentality about the economy, people don't feel the same psychological need to get the great deal, especially since they know more great deals are coming."

Online, with particularly aggressive deals this year, also continues to affect brick & mortar traffic. According to IBM's Digital Analytics Benchmark, online sales gained 14 percent on Thanksgiving Day and 9.5 percent on Black Friday, with both Walmart and Target reporting record-breaking days. But NRF estimated that the early promotions also led to average spending online over the weekend to decline 10.2 pecent to $159.55 versus last year.

Asserting there are "still many weeks left," Shay said NRF continues to expect a 4 percent holiday gain this year.

Somewhat better projections came from ShopperTrak, which estimated combined sales of Thanksgiving were down 0.5 percent to $12.29 billion. A 27.3 percent jump on Thanksgiving with increased doorbuster deals almost made up for a 5.6 percent decline on Black Friday.

"We need to be cautious about looking at a single day or two in projecting the season's total," said Bill Martin, ShopperTrak founder, in a statement. "In 2013, the Black Friday weekend produced a one percent gain, underperforming the 3.1 perfect gain for the entire season. There is a significant amount of energy left in the consumer with seven of the top 10 sales days of the year yet to come."

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