Black Friday Should Help Boost November Retail Sales
Analysts are projecting major merchants will see 3% to 4% increases in November sales over the same month last year when they report tallies on Thursday. More importantly, they are expecting the momentum will carry on throughout the holiday season and help retailers post real sales growth again, following the two recession holidays of 2008 and 2009.
After several months of unseasonable weather, November cooled down to more winter-like temperatures and retailers revved up their deals to entice early holiday shopping.
Teens Were Out Spending
Most analysts noted strong foot traffic at malls around the country on Black Friday -- the day after Thanksgiving that marks the official opening of the holiday season -- as many merchants opened around the clock and laid out promotions online to draw early birds. But the promotions were not overly aggressive and inventories seemed under control -- a good sign for retailers, notes Robert Samuels, analyst at Phoenix Partners Group.
Among the standout retailers at the malls, he singles out department stores, Forever 21, the Abercrombie & Fitch and Hollister chains of Abercrombie & Fitch (ANF), the Gap and Old Navy units of Gap Inc. (GPS) and Limited Brands' (LTD) Victoria's Secret chain.
There was anecdotal evidence that teenagers were out shopping more during Black Friday weekend sales, and their shopping is a good proxy for discretionary spending, according to Thompson Reuters analyst Jharonne Martis, who's projecting a 3.6% monthly sales increase. Additionally, the unemployment rate is stable, and expected to come in at 9.6% in November for the third month in a row, another good sign for retail spending, Martis said in a report.
"Spending power is there, [consumer] confidence is not. And retailers are tapping that spending power with some clever promotions," says Scott Krugman, vice president of the National Retail Federation.
December Could Stay Hot
And shoppers aren't expected to lose steam after Black Friday. Michael Niemira, chief economist of the International Council of Shopping Centers, noted in a report that the average percentage of holiday shopping completed by the end of the Thanksgiving weekend was only 32.6%, far lower than in recent years.
While Black Friday weekend sales were stronger than expected -- especially thanks to sales at stores that opened on Thanksgiving day -- the NRF has not revised its forecast of 2.3% growth in sales this holiday season over 2009. However, Krugman noted that the NRF will be looking closely at Commerce Department sales numbers that come out Dec. 14, to see if they're tracking higher than expected. Don't be surprised if NRF revises its forecast higher then, he warns.
"Many analysts had a concern that we were robbing Peter to pay Paul," on Black Friday, says Krugman. "And that did not happen."