Black Friday Looked Promising

As online shoppers are clicking away at Cyber Monday, we're in good spirits since Black Friday actually turned out better than expected. A reported 172 million shoppers visited stores this weekend, up 25 million from last year! Even more impressive is that this number is significantly more than the 128 million people that the National Retail Federation (NRF) had originally anticipated would hit stores. So what made people come out with shopping guns-a-blazin' despite the current economy?

As they say, people can't resist a good bargain. And when times are tough, those who might not have bothered seeking out discounts before (the same people that often refuse to wait in line for anything) might just roll up their sleeves and get out with the rest of the deal-seekers. If you've been wanting to buy a new DVD player, winter wardrobe, or toys for the kids, this weekend was definitely the time to do it. In that respect, people probably felt they were better off shopping now and paying things back slowly than waiting until later and paying full price for the same thing.

Still, I surveyed a few people in the U.S. about whether or not they were going to head out to shop, and the responses varied greatly. One person told me that he couldn't bring himself to join the wolves, so to speak.

"I'm not desperate enough to line up at in a tent for a bargain," he said, noting, however, that there were tons of people camped out at his local Best Buy in tents from Thanksgiving night!

Another friend who had originally planned to go Black Friday shopping said she decided to "do her shopping from the web...like everyone else I know."

Meanwhile, a third person shopping in the heart of Manhatten, NYC, exclaimed quite frankly: "Recession? What recession???" It's safe to assume that the streets and stores were packed down there.

Granted, these are only a few personal accounts, but it appears that the situation, not surprisingly, varies from store to store, and city to city. The good news is that, overall, more people shopped, and spent more than they even did last year during this critical weekend. As for future outlook, of course we can't expect these numbers to keep up. The NRF is, however, sticking with its original prediction of a modest 2.2% increase in holiday sales for '08.

As for Canada, I haven't seen any definitive numbers. But a short visit to the Toronto Eaton Centre this weekend had me in shock: I have never seen that weekend destination mall so barren on a late November-early December weekend, and on a Sunday, to boot. Visiting Sherway Gardens shopper centre today for lunch, I was equally disappointed when I noticed that a fast food joint that had only been open for less than a month had already closed its doors. We're certainly up for some tough times ahead. Hopefully they won't last too far into '09.

Stay tuned for final numbers, including Cyber Monday online sales figures, once they become available.

Black Friday Update

A correspondent in Chicago reports to us that Black Friday line-ups in the downtown area are relatively thin. Photos above from the Northbrook Mall, taken shortly after opening at 8 a.m., show a moderate crowd in the Apple Store, but nothing to write home about. This is what an Apple Store in Toronto looks like on a normal day!

As for the "deals", we're told that, quote, "the marketing of the sale is better than the sale itself." Keep in mind that this might not hold true for every retailer in every U.S. city. But in this particular case, Black Friday "crowds" are a bit disappointing.

We're getting mixed messages from other sources: some stores appear flooded with shoppers trampling over one another...literally. In one Wal-Mart store in NYC, an unfortunate employee reportedly died due to the pushy crowds! (Though Wal-Mart only confirms that a "medical emergency" caused the retailer to close that store's doors). Some are claiming that it is in fact the bad economy that has forced them to come out and weather the crowds today: getting a "deal" might not have been so necessary before; but now, shoppers are willing to wait in long line-ups just to save a few bucks.

But other reports claim that retailers are cautious about how things will inevitably turn out. Even in shops with big crowds, people tend to be looking for that one fantastic deal, snagging it, and heading home versus prior years where they might have picked up a few extra items on the way to the check out.

Stay tuned for more information as it becomes available...

Happy Black Friday...Or is It?

As our neighbours south of the border roll out of bed with their bellies full of turkey and all the trimming, many will surprisingly still find the energy to get out there and shop today, known as Black Friday.

Historically, Black Friday, the day after the U.S. Thanksgiving holiday, is one of the busiest shopping days of the year, when retailers bring out the big guns, so to speak, with amazing deals and discounts. But it's more important than you might think, often determining a company's profitaiblity for the entire year. Some speculate that Black Friday could account for as much as 50% of a retailer's yearly profits! With the economy in the current state that it is, there's no doubt that many are crossing their fingers that shoppers will come, and that this year won't be a disappointment.

The National Retail Federation (NRF) has relatively high hopes for the day: while the organization is not expecting record-breaking numbers, it does anticipate a 2.2% growth in spending. Not exactly a very healthy increase (in fact, it's the lowest it has been in years), but it's better than one might expect given the financial crisis.

A preliminary NRF survey forecasts that up to 128 million people will be shopping today, and into the weekend. 49 million of these are definitely putting on their shopping shoes, while the remaining 79 million are waiting to see whether the "deals" are worth the trek into the city. Last year, 135 million people said they would go shopping on Black Friday weekend.

Interestingly, the NRF, like many other research companies, points to the falling gas prices as positively effecting the retail landscape. People perceive the savings on gas as some extra money in their pockets. Still, the defining factor on consumer's minds this weekend is price, price, price. So good deals are more important than ever.

"Shoppers who held off on buying a DVD player or winter coat over the last few months will find that prices may literally be too good to pass up," explains Tracy Mullin, President & CEO of the NRF.

Hopefully, Mullin is right.

It doesn't end on Sunday, though. Since the Web has become such a dominant force in the retail industry, the Monday following Black Friday has been coined "Cyber Monday", where at-home shoppers can take advantage of deals online. The advantage here is, of course, the ability to avoid the thrill and confusion of packed sales floors and long line-ups. Shop.org finds that more retailers will be offering Cyber Monday promotions this year than they did last year (83.7% vs. 72.2%).

Official Black Friday results won't be released until 4 p.m. this Sunday. But already, many local news outlets are reporting healthy turn-outs, with people waiting in lines from the early morning hours.

Still, we won't know how the retail industry has fared until the mass hysteria is over, the inventory has been accounted for, and the receipts tabulated. More than ever, this weekend is critical for the U.S. retail industry: it could, in many ways, make or break a retailer.

Lots Still To Be Thankful For

By: Lee Distad

If you’re a newshound, and especially if you have an interest in financial and business news as I do, things look pretty grim. Turn on the TV, pick up a paper, or go to the web and you’ll see headlines warning of impending doom across a broad swath of sectors: Banks are failing, the price of oil is dropping, container ship charter rates have dropped to nearly zero, and so on. And retail, oh lord; the prognosis that on-air pundits are giving for retail and the upcoming Christmas selling season is beyond terrible.

Still, let’s take time today to focus on what’s important, and better yet what we still have to be thankful for. How about some perspective to start with: this isn’t the first time that we’ve seen a weak US dollar, fluctuating energy prices, and spiralling inflation. It’s not the end of the world yet, this too shall pass. Let’s be thankful that the exposure of Canadian chartered banks to sub-prime asset-backed securities has been minor. On the same vein, let’s be thankful that lending standards in Canada have been more rigorous in the last five years than our neighbours to the south, so that we’re less likely to see a tidal wave of mortgage defaults here. On a more industry-centric note, let’s also be thankful that Canadian consumers still have an appetite for cool shiny toys like flat-panel TV’s, smart phones, and in-car navigation. This Christmas may not be the best one ever, but it’s unlikely to be bleak for Canadian retailers.

Lastly, let’s all remember that the reason why Canadian Thanksgiving is a month earlier than American Thanksgiving is because we have more to be thankful for.


Have a safe and happy Thanksgiving.

Happy Thanksgiving!

By Gordon Brockhouse

The news headlines over the past couple of weeks have been anything but cheery: stock-market meltdowns all over the world, failures of once-mighty financial institutions, a tumbling loonie, bitterly divisive elections in Canada and the U.S. So it’s understandable if Canadians head into this holiday weekend with a high degree of anxiety.

I think we’ll all be happier on Tuesday morning if we can stop worrying for a bit. The fact is we have a lot to be thankful for on Canadian thanksgiving.

Even if our portfolios have taken a shellacking, we still have a functioning economy: one that added 107,000 new jobs in September, when the meltdown began. Our own industry is making a contribution, as you can see by the story on our main page about Future Shop hiring 6,000 seasonal associates for the holidays. Regardless of where the markets go next week, the vast majority of us will still be working and providing for our families.

Of course, many individuals and families have been hurt by the economic turmoil. Thankfully, our blessed country has the institutions and generosity to assist those who aren’t so fortunate.

Even if we’re witnessing two unusually nasty elections, the mere fact that we have elections is another reason to give thanks (and to get out and vote on Tuesday!). Even if we don’t always think well with our leaders, we get to choose them and hold them to account. We have constitutions that let us change governments peacefully, rather than at the barrel of a gun.

There are many other reasons to give thanks: family and friends to name two of the most important.

So instead of worrying, let’s all do what we’re supposed to do on Thanksgiving holiday weekend, which is 1) relax and have some fun, 2) give thanks, and 3) eat a really big turkey.

Happy Thanksgiving to all our readers from the Marketnews team!