Black Friday Fizzles With Consumers as Sales Tumble 11%.

http://www.bloomberg.com/news/2014-11-30/u-s-consumers-reduce-spending-by-11-over-thanksgiving-weekend.html

Even after doling out discounts on electronics and clothes, retailers struggled to entice shoppers to Black Friday sales events, putting pressure on the industry as it heads into the final weeks of the holiday season.

Spending tumbled an estimated 11 percent over the weekend, the Washington-based National Retail Federation saidyesterday. And more than 6 million shoppers who had been expected to hit stores never showed up.

Consumers were unmoved by retailers’ aggressive discounts and longer Thanksgiving hours, raising concern that signs of recovery in recent months won’t endure. The NRF had predicted a 4.1 percent sales gain for November and December -- the best performance since 2011. Still, the trade group cast the latest numbers in a positive light, saying it showed shoppers were confident enough to skip the initial rush for discounts.

“The holiday season and the weekend are a marathon, not a sprint,” NRF Chief Executive Officer Matthew Shay said on a conference call. “This is going to continue to be a very competitive season.”

Consumer spending fell to $50.9 billion over the past four days, down from $57.4 billion in 2013, according to the NRF. It was the second year in a row that sales declined during the post-Thanksgiving Black Friday weekend, which had long been famous for long lines and frenzied crowds.

Doorbuster Deals

Even so, many shoppers stayed home. The NRF had predicted that 140.1 million customers would visit retailers last weekend, a small decline from last year’s 140.3 million. Instead, only 133.7 million showed up.

Family Time

Even as an improving job market and lower gas prices have sent consumer sentiment to its highest level since the recession, many Americans are keeping a lid on Christmas shopping. Another customer at the Florida mall, Jotasia Walker, said her family draws names and gets one gift per person, rather than buying presents for everyone. The 21-year-old, who was visiting the mall with three sisters, two cousins, a niece and a nephew, said they came out more to spend time together than to shop.

Recession Hangover

The industry’s focus now shifts to Cyber Monday, when e-commerce sites release another wave of discounts. Almost 127 million Americans will shop online today, Prosper predicts, down from 131.6 million a year earlier. That lends evidence to the notion that Americans are less enticed by one-day sales events.

Many consumers also don’t feel like the economy has recovered from the recession yet, Shay said. That makes it difficult to gauge how much they plan to spend.

Fuel Costs

Cheaper gasoline prices, meanwhile, are working in the retail industry’s favor. The average cost of a gallon of regular gasoline was $2.81 last week, the lowest in four years, according to the automobile group AAA. That’s leaving more money in shoppers’ wallets -- and making it less expensive to take a trip to the mall.

For many shoppers, though, the excitement of Black Friday sales may have simply worn off. Consumers know they can get discounts throughout the holiday season and are adjusting their shopping accordingly, said Simeon Siegel, a New York-based analyst at Nomura Holdings Inc.

“You can’t outsmart the consumer anymore,” he said. “You need to pander to where the consumer wants to shop and when.”