Published on: November 26, 2007• Bloomberg reports that even as store visits increased 4.8 percent, 147 million US shoppers “spent an average of 3.5 percent less during the post-Thanksgiving Day holiday weekend than a year earlier as retailers slashed prices to lure customers grappling with higher food and energy costs.”
However, another survey, by ShopperTrak RCT Corp., said that retail sales just on Black Friday were up 8.3 percent over a year ago, and on Friday and Saturday combined rose 7.2 percent.
• The Wall Street Journal reports that retail online sales today – known as “Cyber Monday” and said to have the same sort of juice as last week’s “Black Friday” sales did for brick-and-mortar retailers – have become increasingly important and more promotional than ever.
According to the WSJ, “Many consumers shop in stores over the Thanksgiving weekend and then boot up their computers on Monday to do online research, compare prices and seek out deals. While it isn't the biggest online shopping day of the holiday season, the day brings the first increase in Web holiday spending. Last year, Cyber Monday Web sales hit $608 million, up 26% from the same day in 2005, according to comScore Inc., a Reston, Va., market-research company.
“As a result, more merchants are rolling out new sales tactics this year on the Monday after Thanksgiving. Seventy-two percent of online merchants plan Cyber Monday specials this year, up from 43% two years ago…”
• According to a Shop.org survey, 72.0 million consumers plan to shop online from home or at work on Cyber Monday, up from 60.7 million in 2006 and 59.0 million in 2005. The survey found that 31.9 percent of adults will shop on Cyber Monday, up 17.3 percent over last year (27.2%).
• Meanwhile, the Conference Board has released a report saying that 73 million US households have discretionary income, up from 57 million just five years ago. According to the story, these are pretty significant dollars - $1.7 trillion in total.
However, the news isn’t good for everyone. More than 75 percent of all discretionary income is held by households earning more than $100,000, and New England is the region of the country with the greatest number of households having discretionary income. Household discretionary income is lowest in the West North Central region, defined as Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota.
Households with earnings under $50,000 account for just three percent of the nation’s discretionary income.
- KC's View:
- It is hard to imagine that the coming holiday shopping season is going to be any kind of noteworthy success, especially since Americans will be reminded of economic realities every time they go to the gas pump or pay the heating bills for their houses. Most people are going to be looking for deals wherever and whenever possible, and I suspect that this impulse will become stronger as he end of December grows closer. That means that retailers will be forced to cut prices and margins to get people into the stores to stave off disaster.