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Black Friday: Be Careful Out There

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Black Friday: Be Careful Out There

I have plenty to be thankful for this Thanksgiving. For one, I’ve never had the desire — or the need — to camp in the parking lot of a big-brand retailer for days or weeks to gain a spot at the head of a queue and win a chance to wrestle some crazed shopper for control of a color TV, or other product. And I’ve reached the age of Medicare eligibility without ever having a job that required me to work holidays, except for my first entry-level position in journalism: delivering the Pittsburgh Press [most likely now defunct] door-to-door seven days a week.

So it’s tough for me to get excited about the annual blood sport that has become Black Friday shopping. And firing the starting gun for the national product grab-ass on Thanksgiving night is tough to swallow for many of the employees involved — and perhaps for the retailers themselves.

Here’s an interesting take from a blog post [by subscription] by Justin Lahart on WSJ.com, “Retailers’ Black Friday Arms Race Backfires”:

With retailers’ Black Friday arms race spilling over into Thanksgiving Day, everybody might be better off with a dose of detente.

It was bad enough last year, when Wal-Mart offered “door-buster” deals on toys starting at 10 p.m. on Thanksgiving, and several other stores, including Macy’s  and Best Buy,  opened at midnight. This year Sears is joining the fray, opening up at 8 p.m. on Thanksgiving. Target is opening up at 9 p.m. And so it goes. [Note: Doesn’t anyone but me fall sound asleep almost immediately after the Thanksgiving food orgy?]

Retailers, of course, will be quick to crow about the customers drawn in by ever earlier Black Friday openings. But it’s not clear that the early sales accomplish much—and in the longer run they may raise costs.

The holiday shopping season is basically a zero-sum game: People spend what they are going to spend. The broad category of department stores and other retailers (such as clothing stores) that make department-store like sales fetched about 21% of their total sales last year in November and December, according to the Commerce Department. The share was the same in 2010, 2009 and 2008. It has drifted down slightly over time: A decade ago, the share was 23%.

What retailers are doing with tactics like opening ever earlier on Thanksgiving, then, is fighting for a bigger share of holiday spending, as opposed to making the pie bigger.

And:

Ultimately, retailers may find that all the Black Friday shifts have really achieved is the higher costs they incur from paying employees to come in for Thanksgiving. And if the job market continues to improve, those costs will only increase: It is easier to find people willing to work on a holiday with the unemployment rate at 7.9% than at 5.9%.

The reason retailers began the Black Friday arms race was to spark sales boosts that would appeal to investors. The irony is that all they may accomplish is a narrowing of profit margins that makes their shares less attractive.

OK. I know that for many Black Friday shopping is now as much a part of the holiday tradition as sneaking that second slice of pumpkin pie.

So as a public service, here’s the sage advice of Sergeant Phil Esterhaus on the hit TV show [now defunct] “Hill Street Blues”:

“Hey, let’s be careful out there.”

 

Illustration credit: Jane TV via John Kerezy on Facebook

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