Strong traffic a troubling sign

Consumers were out in force on Black Friday and over the course of the weekend, according to reports from media outlets, financial analysts and retail trade groups. While the strong turnout was interpreted by some as a positive development and evidence of the American consumer’s resilience, it proved to be anything but, as the large crowds didn’t equate to dollars spent. That’s according to the National Retail Federation which summed up results of a weekend survey by noting, “More people spent less.” The trade group’s survey determined that 195 million people shopped stores and the Internet over the weekend this year versus 172 million last year but average spending per person dropped to $343 from $372.

While strong customer traffic is usually cause for celebration, this year the trend is troubling because it suggests that consumers are under considerable pressure. It took the prospect of bargain price merchandise to lure them out of hibernation, and even then they spent selectively on those items retailers priced most aggressively. Ironically, a more encouraging sign regarding the health of the consumer would have been a lighter Black Friday turnout because it would have shown consumers were less desperate to snag a bargain. The desperation of consumers was evident in the fact that nearly one third of the Black Friday shoppers said they were at stores by 5 a.m. compared to only 23% last year.