Question: What Is Black Friday?
Answer: Black Friday is the day after Thanksgiving, November 29, 2013, and the busiest shopping day of the year. It kicks off the critical holiday season, where retailers make between 20%-40% of their annual revenue.
This year set another record, as 92 million people shopped on Black Friday itself. This is greater than the 89 million who shopped in 2012 and the 85 million in 2011. On average, each shopper burned through $407.23, down from last year's record $423, but more than the $398 in 2011. In total, they spent $57.4 billion, down 2.7% from last year's record of $59.1 billion, the first decline since 2008. However, this was still greater than the $52.4 billion spent in 2011, and 16% more than Black Friday 2010 .
During the three-day Black Friday weekend, 141 million people shopped, fewer than the 147 million people who did last year, but more than the 126 million in 2011. In addition, 45 million took advantage of deals on Thanksgiving Day itself, more than the 35 million last year. (Source: National Retail Federation, Americans Gobbled Up Thanksgiving Weekend Deals, December 1, 2013)
Holiday Shopping Season Sales
Black Friday officially kicks off the holiday shopping season, which now lasts from Thanksgiving Day itself to Christmas Eve. The National Retail Federation predicts will bring in $602.1 billion in retail sales. This is 3.9% higher than the $579.1 billion spent last year. The holiday shopping season is critical for the economy because around 20% of retail sales occur between Black Friday and Christmas. For some retailers, such as jewelers, it's even higher -- nearly 40%.
However, this forecast may fall short, as last year's did. The NRF predicted that last year's retail sales would grow 4.1%, and it only increased 3.5%. That's no better than the 10-year average of 3.5% that occurred before the 2008 financial crisis. It's also slower than the 5.6% sales increase in 2011.
What's caused the softening in retail sales? First, shoppers have turned away from their previous love affair with credit card debt. Instead, families are more likely to use money they saved or layaway. In fact, 43.4% will use debit cards, 25.2% will use cash, and 2.8% will use a check. Only 28.7% will whip out the plastic to pay for holiday shopping.
Instead of using credit cards, families are taking advantage of low interest rate loans to purchase durable consumer goods, like washing machines, televisions and automobiles. For more on this trend, see Average Consumer Debt Trends.
Second, retail sales for Halloween are down from last year. Only $6.9 billion will be spent, down from the record $8 billion spent last year, and even less than the $7 billion spent in 2011. Halloween is a "canary in the coalmine" for retail, since it's a very affordable holiday. Not only is less being spent, but fewer people are participating. This is an additional concern for Black Friday, since 40% of shoppers start before Halloween. For more, see Halloween Retail Sales 2013.
Third, shoppers are still concerned about the health of the economy. The government shutdown in October and recurrent debt crises have created an air of uncertainty for consumers and businesses alike. As a result, companies are hesitant to create full-time, good-paying jobs. Consumers won't spend without the assurance of steady incomes.
What Shoppers Spend
The NRF poll revealed that each shopper will spend $737.95 for the entire holiday season. This is less than the $752.24 they spent in 2012. While it's less than the all-time high of $755 spent in 2007, at least it's more than the recessionary low of $682 spent in 2009. More than half of shoppers admit economic worries are affecting them, while nearly 80% said they must spend less, cut corners and tighten budgets whereever they can. For more than half, this means fewer gifts for themselves.
Here's how much the average shopper will spend:
- Family members - $415 (down from $423.36 spent last year).
- Themselves - $129.62 (down from $140.43 last year).
- Food and candy - $100.35.
- Friends - $72.14.
- Decorations - $51.60.
- Greeting cards - $28.03.
- Pets, community members and others - $25.63.
- Co-workers - $23.59
- Flowers - $21.12.
Shift to Thrift
Ever since the recession, retail trends show a shift to thrift. This is not just a search for the lowest price, but also an interest in finding the best value for the price. The 2013 Black Friday survey shows the same. More than a third (35.6%) said they are motivated by sales and price discounts. However, 16.4% said selection was most important, while 13.6% said it was quality of the merchandise.
Smartphones and tablets are being used much more than in the past to find those bargains. More than half (53.8%) of those who own smartphones, and just about two-thirds (63.2%) of those who own tablets, will use them to not only research, but just go ahead and purchase products online.
What kinds of gifts do people want to receive? More than half (59.4%) simply want a gift card, so they can be sure they won't be disappointed with their gift. Others trust their gift-givers' taste in clothing and accessories (51.2%), consumer electronics (36.1%), and jewelry (23.3%).
Nearly 80% are getting a head start on their holiday shopping, with 40% starting before Halloween, and another 40% will begin before Black Friday. Another 17% will wait until the first two weeks in December, while 4% will procrastinate until right before Christmas.
Black Friday Hiring
The NRF reported that stores will hire between 720,000 and 780,000 seasonal workers this holiday season, more than the 720,500 they hired in 2012, the 607,000 they hired in 2011 and the the 495,000 workers in 2010. (Source: National Retail Federation 2013 Survey) Article updated December 2, 2013