The National Retail Federation estimates 147 million people are going to hit the stores for Black Friday this year. But that’s not enough since holiday spending for this holiday is smaller than last year’s 5.6 percent. In an attempt to minimize the loss, retailers have decided to start Black Friday earlier, on Thanksgiving Day evening.
Last year, Black Friday was a huge success for retailers. It was an impressive start of the holiday season that had retailers hoping it will mark the beginning of a new prosperity era. But here we are, one year later, and Black Friday estimates don’t look that good. Retailers are trying to save what they can, and if 24 hours aren’t enough to get your discounts, Walmart, Target and several others have decided to extend that.
The National Retail Federation estimates holiday spending to rise 4.1 percent, but in 2011 that was 5.6 percent. Since income growth, consumer spending and unemployment were the year’s issues, buyers don’t have that much cash to spend on other things than food, gasoline, monthly expenses or most recently the damage of Sandy.
“Consumers don’t have a lot of cash. We are adding jobs, but doing so only at a modest rate, and growth and wages are weak relative to employment growth” explains Moody’s Analytics expert Scott Hoyt. “We still have limited access to credit and wealth that hasn’t fully recovered from the recession” he added.
So, opening as early as 8 p.m. on Thanksgiving night extends the chances of retailers to actually make money on Black Friday. But when summing up the costs of having employees working on Thanksgiving Day, keeping the stores fully functional for extra hours and then the subsidies to products, Black Friday doesn’t seem all that worth it.
“Consumers only have so much to spend” Retail Industry Leaders Association’s Casey C. Chroust told The Baltimore Sun. “When your direct competitor is opening up before you, it puts pressure on you to mirrors those store hours as well. The last thing they want is for [shoppers] to go to the competition and spend it all before you open” the executive vice president of retail operations added.
And 2012’s Black Friday earlier openings are not the end of this trend. Casey C. Chroust says retailers will keep opening earlier each year “because consumers keep showing up”. “Consumers love it because they get a head start on shopping. There’s a convenience element. A lot of people would rather shop at 8 p.m. on Thanksgiving than at 5 a.m. on Friday morning” Chroust added.