Cyber Monday Follows Black Friday for Retailers

“Black Friday” is the only good day in the Wall Street jargon that carries that adjective. It is the day after Thanksgiving, when shoppers crowd the malls as early as 5 am to get the “best deals,” and when retailers have a hope of finishing the year in the black A better name might be “Fat Friday,” but “Vendredi Gras” makes it sound like a New Orleans party. In any case, the day came and went followed by a week-end of shopping that makes sellers of stuff feel perky about this year.

The National Retail Federation [NRF], which is a very busy place this time of year, reported that the Thanksgiving week-end sales were up 22% over last year, touching nearly $28 billion. That’s a lot of stuff by any measure, especially when a substantial amount is going to be returned on December 26. However, for Friday, ShopperTrak, a retail research group, said sales were off by 0.9% dipping to $8 billion. One must remember that 2004 was a rather strong year, so staying near those levels isn’t all bad. Indeed, the average shopper blew $302.81 over the week-end according to the NRF; and an NRF survey suggests that a total of $738.11 per consumer is going into retail tills this season.

Part of the chaos of Black Friday is founded on myth. Shoppers turn up long before sun up to buy gifts in the mistaken belief that this is the day when the best deals are on offer. Any student of economics knows that when demand rises, so do prices. With people lined up outside and actually trampling one another in some instances to get in, retailers have learned to put a few loss leaders in the ads, and let the rest of the prices stay put. Indeed, one Macy’s employee told the Kensington Review the real deals were the week before Black Friday. Moreover, as the deadline of Christmas Eve approaches, retailers who haven’t done as well will slash prices to get the tills jingling like so many sleigh bells.

Moreover, a new phenomenon has taken some of the edge off Black Friday, namely “Cyber Monday.” When people return to work after the Thanksgiving feast, they spend time and money on the office computer buying things online. This sounds like more than it probably is. While no one will dispute the success of online shopping, the thought that the Monday right after the four-day week-end is going to outshine is dubious. The Monday after is hardly likely to offer sufficient slack time – some employers might actually expect employees to work.

All the same, the world economy for the last few years has hinged on the, sometimes excessive, spending of the American consumer. Until such time as the world figures out how to change the structure of the global economy (some spending by other people might be a good step), this annual boost remains critical to everyone. So, to the American readers of this journal, don’t both with any guilt this year; the more the USA spends, the better for everyone else. Why does that sound wrong?

© Copyright 2005 by The Kensington Review, J. Myhre, Editor. No part of this publication may be reproduced without written consent.
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