AddThis

Retail in the Black (Friday)

When it comes to Black Friday, you’re either in or you’re out. If you’re like me, the whirlwind of retail chaos that swirls around shopping centers the Friday after Thanksgiving can feel a bit overwhelming. The sales and deep discounts are tempting, but wading through crowds and fighting for parking spaces is not my idea of a “happy” holiday. But I have plenty of friends and family – and I’m sure you do too – who look forward to Black Friday with the anticipatory excitement of kids on Christmas Eve. For many people, the bustling craziness is half the fun. It’s almost become its own holiday.

Of course the big question every year is: will retailers be looking forward to Black Friday? In terms of volume, Black Friday shopper numbers do tend to be pretty consistent from year-to-year (barring any dramatic weather impacts). It used to be that if Black Friday sales were good, retailers could count on an overall strong holiday season. While I don’t think that’s changed dramatically, I do think that because seasonal discounts are starting earlier and earlier, Black Friday is only part of the bigger picture.

As I said in my last column, I do think the earlier start to the shopping season will be a net positive for retailers. But, I also think it’s possible that a longer shopping season will sap some of the oomph from Black Friday. My prediction is that retail profits for Black Friday 2011 will probably be flat at best. Once again, I think lean economic times, lagging consumer confidence and fears of a “double-dip” recession will contribute to a generally lackluster holiday shopping season. The impact of a less-than-thrilling holiday haul might be significant, but I think it’s unlikely to be crippling. While we might see some specialty store closures announced in the new year (particularly in the apparel arena) and a continued paring back of the store base for some retailers, I still think widespread bankruptcies or store closings are unlikely. It seems that most of the fat trimming, with respect to store counts, has already occurred in recent years.

While cash registers might not be ringing with the intensity that most retailers would prefer, there are some interesting dynamics at play this year that we’ll have to watch carefully as events unfold between now and the end of the year. As far as sales go, I don’t know that we’ll see dramatic new discounts on Black Friday; the bigger change will be in how retailers market themselves: continuing to try to reach a broader audience through social media and other new organic promotions. Cyber Monday discounts seem to be a bigger deal every year, but I don’t think it’s as much of a drag on Black Friday as some others think. I just don’t see that much overlap between the two shopper bases. I do think the ongoing trend of stronger online sales will continue to siphon more dollars away from brick and mortar locations; a phenomenon clearly evident already in the electronics sector.

What do you think? Will Black Friday sales be strong this year? How do you think the holidays will go? Please make a public comment below or feel free to e-mail me privately at jeff@jeffgreenpartners.com.

Jeff Green is president and CEO of Phoenix-based Jeff Green Partners (jeffgreenpartners.com), a leading consulting firm specializing in retail real estate feasibility, retail expansion planning, medical retail planning, location analysis and commercial land use.


Click here for past columns by Jeff Green.

© 2014