New York — Despite fears of a promotional free-for-all on Black Friday due to the weak economy, excess inventory and liquidation sales at Tweeter and some Circuit City stores, CE dealers largely stuck to plan the day after Thanksgiving and avoided the deep, margin-drubbing discounting of years past.
What’s more, the worst recession in 70 years couldn’t keep the consumer down over the holiday weekend, as shoppers turned out in record numbers to take advantage of Black Friday deals. According to a survey by the National Retail Federation (NRF), more than 172 million people either visited or planned to visit stores and Web sites over the four days, up from 147 million last year. In the process, they spent an estimated $41 billion, or $372.57 per shopper, up 7.2 percent from Thanksgiving 2007.
While clothing was the biggest draw, 39 percent of shoppers bought DVDs, CDs, video games and books, while nearly 36 percent purchased CE products, according to the NRF poll.
“Pent-up demand on electronics and clothing, plus unparalleled bargains on this season’s hottest items, helped drive shopping all weekend,” said NRF president/CEO Tracy Mullin.
NRF’s survey was borne out by dealers’ own accounts. Conn’s, the multiregional CE and appliance chain, said sales on Black Friday rose 64 percent year over year and were up 50 percent for the weekend. The surge pushed net November revenue up 23 percent and same-store sales ahead 12 percent.
Buy.com recorded its seconded-biggest sales day in company history on Black Friday, up 40 percent year-over-year, bested only by the following Cyber Monday. “Our performance demonstrates that shoppers are looking for the lowest prices and the best return on their dollar,” said president/CEO Neel Grover.
Bob Young, principal of Young’s Appliance in Alpena, Mich., said he enjoyed his strongest Black Friday ever. Despite the state’s ailing auto industry and real estate market, “Customers came in steadily all day,” stoked by direct-mail alerts, newspaper inserts, and cable TV and radio spots.
Sales of flat-panel TVs were especially brisk, Young reported, as consumers responded to 32-inch Sony LCDs for $499 and Panasonic’s 42-inch 720p plasmas at $699.
All told, the company may have had a $100,000 day, compared with the typical daily take of $10,000 to $15,000, Young said.
Tom Campbell, who handles the CE side for Linder’s Furniture, said the holiday weekend was the biggest in ten years for the Southern California chain. “It was phenomenal, and totally unexpected,” Campbell told TWICE. Flat panel was the shining star, led by LG’s 32-inch LCD, which was priced at $488 and came with a certificate for $500 in groceries. The company also enjoyed a “huge bump” from Mitsubishi’s $600 in gas and 36-month interest free promotion, and completely sold out of all Blu-Ray Disc players.
Bob Serio, owner of Perfect Vision & Sound in Avon, Conn., was able to compete with big box competitors — including a liquidating Tweeter across the street — thanks to a distributor that passed along deep discounts on Samsung and Panasonic flat panel TVs and provided an eight-page color flyer to tout them. “With the deep deals offered in our flyer we had better pricing [than Tweeter], and the 23 pieces of plasma and LCD we had, along with accessories, allowed us to sell out on the specials and then some.”
Ronnie Bradley, president of Hall TV in Camden, S.C., said Sony-subsidized promotions helped make Black Friday the second best in the company’s 51-year history. “Most of the day [we] could not get to all the buyers. I say ‘buyers’ because almost everybody ended up buying,” he said.
Van Flynn, a home electronics manager at Jetson TV & Appliance Center’s Fort Pierce, Fla., store, said customers were lining up outside each of the chain’s four retail locations before 5 a.m. on Black Friday. According to Flynn, president Trey Thofner decided “we were going all-out this year,” and the company came close to hitting its one-day goal of $1 million, compared to last year’s tally of less than $400,000.
At a Best Buy store in Woodbridge, N.J., police pegged the pre-opening crowd at 800, up from 550 last year, general manager Dinesh Ramchandani told TWICE. Ramchandani’s Black Friday goal was $1.5 million for the 45,000-square-foot store, and as the crowds began streaming in at 5:00 a.m., he was confident of hitting, if not surpassing his sales target.
At a nearby Sixth Avenue Electronics store, Steven Hayes, a security and loss prevention specialist on loan from corporate headquarters, estimated the wrap-around queue at about 1,000 strong by 7:00 a.m. A veteran of eight prior Black Fridays, Hayes said the New York metro area has historically remained resilient in the face of economic adversity, as evidenced by the steady parade of large, flat-panel TVs that consumers were carting out the door. But Hayes said sales were strong across all product categories that morning, from $200 LCD TVs to $4,000 home entertainment systems.
Ironically, much of the day’s doorbuster pricing was readily available prior to Black Friday, including 42-inch, tier-one 720p plasma TVs for $700 and 50-inch models for $800. Other big draws included 32-inch LCDs for under $500 and sub-$200 Blu-ray Disc players.
Based on historic patterns, sales are expected to drop off dramatically this week and remain sluggish until the final days before Christmas. But due to a one-week calendar shift this year, retailers have a shorter window of opportunity.
“Though retailers should be encouraged by strong traffic and sales over the weekend, consumers are still being cautious,” said Phil Rist, strategic initiatives executive VP for BIGresearch, which conducted the NRF survey. “Weekend shoppers indicated that they are still sticking to a budget and thinking carefully before making any holiday purchases.”
Added Young’s Appliance’s Bob Young, “The long slog between now and Christmas will be a day-by-day effort that means a lot of demos,” and home theater of a different sort — “the theatrical experience that we pull off every day.”
The NRF is projecting total holiday sales to rise a modest 2.2 percent this year — half the average growth rate of the past 10 years — to $470.4 billion.