Chicago — Even the prospect of steep savings on Black Friday will fail to rouse shell-shocked consumers, retailers fear.
Merchants are now projecting a slim 1.2 percent increase in sales on Black Friday, compared with the 8.3-percent spike enjoyed last year, a new survey of retail executives shows.
Of the 100 chief marketing officers queried on behalf of Chicago consultancy BDO Seidman, 68 said Black Friday sales would be flat, 16 predicted an increase, and 16 forecast a decline.
The annual survey of CMOs at leading retailers nationwide was conducted in late September and October, after the global financial meltdown began.
In addition to the prospect of lost homes, jobs and 401K savings, another factor that could bite into Black Friday sales is the increase in pre-holiday promotions. Wal-Mart, for example, dropped the price on a Magnavox Blu-ray Disc player to $198 earlier this month, while Kmart offered a 26-inch Element LCD HDTV for $300 in an early Black Friday deal on November 16.
Moreover, prices for 32-inch LCDs have already fallen below the $500 mark, and Best Buy is pre-emptively offering a 42-inch, 720p Samsung plasma at Wal-Mart's Black Friday price of $700. A comparable Panasonic PDP is also available at Costco at that price.
“It’s clear that the increase in the country’s unemployment rate, along with the shock of the financial market meltdown have had a negative impact on the psyche of the American consumer,” observed Gian Fulgoni, chairman of digital marketing research firm comScore.
Added Lynn Franco, director of the consumer research center at The Conference Board: “This is shaping up to be one of the most challenging holiday seasons in years. It’s going to take more than the usual discounts and incentives from retailers to get consumers to spend more freely.”