Did Black Friday Put Retailers In The Black?
SCOTT SIMON, Host:
Did Black Friday, as it's called, live up to its billing and actually put retailers in the black? We've invited Nigel Gault, chief U.S. economist for IHS Global Insight, to join us, talk about today's retail news. Mr. Gault, thanks very much for being with us.
SIMON: Thanks very much.
SIMON: It's a little early to be definitive, I understand, but what's your understanding of how sales went yesterday?
SIMON: It seems like the shoppers were out in force, perhaps more than last year. In terms of the spending, looks like spending may have been rather similar to a year ago, perhaps a little higher. I think the message is the shoppers were out but they were being very careful with their spending. When they saw a bargain, they were prepared to act, but they were keeping quite a tight reign.
SIMON: But isn't the old idea of selling something on discount, or at least it used to be, you sell something on sale because you hope once somebody's in the tent they'll buy something at retail price?
SIMON: That's the idea, but I think shoppers know that their financial situation is a lot worse than it would've been a year ago. They're worried about the outlook for the economy, about unemployment. So I think they're targeting things much more than in the past. They're looking for that bargain. If a bargain's there, they're taking it, but they're being much more careful about those discretionary impulse purchases than in the past.
SIMON: And surely it must cost retailers more money to open up their stores at 2:00 a.m. And as you know, I'm not being hyperbolic when I say 2:00 a.m. Some retailers did that.
SIMON: Indeed. Retailers seem to be opening earlier every year. Competition is very tough out there, and of course each retailer is seeking to essentially get the jump on the other retailers. They know that the consumer's being very careful. They know they're going to have work very hard to get that consumer dollar. So even if the consumer overall isn't spending that much differently from last year, there's a lot of pressure on retailers to make sure that each one of them tries to get that dollar.
SIMON: The Monday after Thanksgiving is now known, at least this year, as Cyber Monday because presumably a lot of people who've returned to work on Monday start shopping on their computers - during work hours, I might add.
SIMON: That's right.
SIMON: What do you foresee for that?
SIMON: That might be shaping up to be quite good this year because it does appear - at least in the past few days - that there's been more of a tendency for people to do their shopping online. People who are fed up with going out and having to battle with the crowds in the actual stores are now looking for their bargains online.
So it doesn't mean it's going to be any easier for the retailers to get the consumers' dollar - they still have to discount to give them a reason to buy - but we may see more online shopping this year than in previous years.
SIMON: Mr. Gault, help us understand what a seasonal jolt - if that's even what we confront this year - can do for the economy overall. I mean, is it a one- trick pony and the effect is gone by January, February?
SIMON: In a sense, yes. I mean, it probably isn't going to, you know, make all the difference between a strong recovery for the economy and an economy that falls back into recession. But I think we can take this season as an indication of the consumer mood: Are people feeling more confident about the future? Is the consumer going to participate in this recovery? I don't think anybody thinks the consumer is going to lead, but we do need the consumer to participate.
In that sense, it is going to be - give us a signal of where we might be going for the broader economy next year.
SIMON: Nigel Gault, chief U.S. economist for IHS Global Insight, thanks for being with us, and Happy Holidays.
SIMON: Thank you very much.