Don’t Live or Die on Black Friday’s Totals

by Alyssa Oursler | November 26, 2012 12:34 pm

Don’t Live or Die on Black Friday’s Totals

Black Friday has come and gone, and it has left an important lesson in its wake: Even if you didn’t make the absolute most out of Black Friday, there’s still a lot of holiday shopping season left.

Wall Street might want to take this lesson to heart.

Despite lofty expectations, sales on the highly anticipated shopping day actually fell nearly 2%, making for the first drop since 2008. But that’s no reason for panic. One big drag on Black Friday was a shared spotlight — many retailers made the controversial decision to open their doors late on Thanksgiving, and by some estimates, 30% of post-Thanksgiving shoppers were in stores by midnight.

Walmart (NYSE:WMT[1]) — which Citi’s Deborah L Weinswig said “won” Black Friday[2] based on traffic, doorbusters, customer service, checkout experience, overall execution and online integration — reported that[3] “during the high traffic period from 8 p.m. through midnight, Walmart processed nearly 10 million register transactions and almost 5,000 items per second.”

Smaller rival Target (NYSE:TGT[4]) wasn’t far behind in those rankings thanks to a still-early 9 p.m. Thanksgiving open. But close friends of mine visited the store in the late afternoon the day after and found that, long after the rounds of late-night doorbusters, things already had settled down.

The same was true at our local mall. Sure, there were shoppers in Macy’s (NYSE:M[5]) and JCPenney (NYSE:JCP[6]), but not nearly the swarm one would expect. And at Kohl’s (NYSE:KSS[7]), having all registers open was enough to handle the crowds.

The one store that I swung by, though, was notably — and surprisingly — busy even in the late afternoon: Best Buy (NYSE:BBY[8]). There was little sign of the brick-and-mortar retailer’s recent woes[9] as countless customers snatched up the latest movie releases, wheeled big-screen TVs to their cars and grabbed hot Apple (NASDAQ:AAPL[10]) gadgets and accessories.

Heck, even neighboring (and similarly ailing) H.H. Gregg (NYSE:HGG[11]) drew in shoppers throughout the day with its piles of marked-down Samsung TVs and on-sale appliances.

Of course, Black Friday is just one day — whether in terms of the holiday sales for quieter malls or booming Best Buys. The latter still will have to see if online shoppers, checking off their Christmas lists with the click of a button, pick Best Buy today.

For the third straight year, Cyber Monday is expected to be the biggest online shopping day of the year. Americans should spend around $1.5 billion[12] — a 20% year-over-year increase.

Do-it-all e-commerce giant Amazon (NASDAQ:AMZN[13]) is the name of Cyber Monday and, at a mere glance, is boasting a marked-down Kindle Fire on its homepage, $100 off Sony (NYSE:SNE[14]) laptops and 60% off a Panasonic (NYSE:PC[15]) 55-inch TV.

The Best Buy homepage, on the other hand, was drab, promoting $25 savings on shipping if customers opt for in-store pickup. Otherwise, the site just says shoppers can “Find Hot Deals in Every Department.” Not terribly promising considering the stronger Cyber Monday presence of Amazon, its fellow e-tailer eBay (NASDAQ:EBAY[16]), big-box rival Walmart and many more retailers.

On the flip side, Friday’s quieter-than-usual shopping centers also are little reason for concern. Across the whole weekend, sales increased by 13% year-over-year for a grand total of just more than $59 billion, and total shoppers for the weekend improved 9% to 247 million — thus, the headline 2% decline in Black Friday sales itself meant little to the holiday weekend as a whole.

Taking that a step further, The Washington Post explains[17] that “sales over Thanksgiving weekend tell us virtually nothing about retail sales for the full holiday season.” The relationship between Black Friday sales vs. holiday retail sales is weak at best — and negative at worst.

The takeaway? Amid all the cheers, cries, counting and criticism, remember that Black Friday still is just one day — the real test for retailers is taken across several weeks.

As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.

Endnotes:
  1. WMT: http://studio-5.financialcontent.com/investplace/quote?Symbol=WMT
  2. “won” Black Friday: http://www.businessinsider.com/wal-mart-won-black-friday-2012-11
  3. reported that: http://news.walmart.com/news-archive/2012/11/23/walmart-us-reports-best-ever-black-friday-events
  4. TGT: http://studio-5.financialcontent.com/investplace/quote?Symbol=TGT
  5. M: http://studio-5.financialcontent.com/investplace/quote?Symbol=M
  6. JCP: http://studio-5.financialcontent.com/investplace/quote?Symbol=JCP
  7. KSS: http://studio-5.financialcontent.com/investplace/quote?Symbol=KSS
  8. BBY: http://studio-5.financialcontent.com/investplace/quote?Symbol=BBY
  9. recent woes: http://investorplace.com/2012/11/dont-even-be-tempted-by-hp-and-best-buy/
  10. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  11. HGG: http://studio-5.financialcontent.com/investplace/quote?Symbol=HGG
  12. spend around $1.5 billion: http://www.bostonherald.com/news/national/general/view/20121126cyber_monday_likely_to_be_busiest_online_sales_day/srvc=news&position=recent_bullet
  13. AMZN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMZN
  14. SNE: http://studio-5.financialcontent.com/investplace/quote?Symbol=SNE
  15. PC: http://studio-5.financialcontent.com/investplace/quote?Symbol=PC
  16. EBAY: http://studio-5.financialcontent.com/investplace/quote?Symbol=EBAY
  17. The Washington Post explains: http://www.washingtonpost.com/blogs/wonkblog/wp/2012/11/23/black-friday-is-a-bunch-of-meaningless-hype-in-one-chart/

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