Black Friday Checks Recovery's Pulse
SCOTT SIMON, host:
This is WEEKEND EDITION from NPR News. I'm Scott Simon.
The holiday shopping season has begun. Yesterday, of course, was Black Friday -traditionally the busiest shopping day of the year, when retailers hope to climb out of the red financially. Deal-determined shoppers flooded malls and big box retailers across the country, hoping to snatch up bargains. Like these folks, who were out really, really early.
Mr. SHANE THOMPSON: Got up at 3:30 to get out and get started. So we got here probably about, probably about 5:00 in the morning. We always say we're not going to, but then we see the papers and say, okay, well, this is a good price, so let's go.
Ms. LAURIE BEELINBERG: My husband and son got up early this morning to go snowboarding and woke me up. So I thought, I don't have anything to do at home, I'm just going to come down, and I just I'd look at all the crazy people out here fighting for things.
(Soundbite of laughter)
SIMON: That was Shane Thompson of Gainesville, Georgia, and Laurie Beelinberg of Salem, Oregon.
Black Friday sales figures aren't in yet. But this year retailers said they've seen longer lines than in years past. People seemed to be spending more money. In a moment, we'll hear from a marketing executive at Sears. But first, joining us from New York is Dana Telsey, an expert on the retail industry and CEO of the Telsey Advisory Group.
Thanks so much for being with us.
Ms. DANA TELSEY (CEO, Telsey Advisory Group): Thank you so much for having me.
SIMON: And so far do you think it was a good Black Friday?
Ms. TELSEY: So far I do think it was a good Black Friday. I was out in stores all day yesterday and what I saw was a lot of traffic. I saw very planned promotions by the retailers. I think that they're off to a very good season and it could be the best holiday season we've seen since 2006.
SIMON: Help us understand the relationship between Black Friday and the rest of the retail season. How important is a good beginning?
Ms. TELSEY: A good beginning is very important. Typically, the Black Friday weekend accounts from anywhere around 10 to 15 percent of holiday sales and retailers get a sense what the consumer is looking for, how deep the price reductions have to be, and certainly from what we're seeing so far, they're marking down maybe one item but still the rest of the store is pretty much at very good and planned prices, so it should be a healthy holiday season.
SIMON: But how do this year's results compare to pre-recession levels?
Ms. TELSEY: What we're seeing so far is the results this holiday season are not similar to pre-recession but they're certainly better than what they were. We're moving in the right direction. We're seeing an upward visibility to price points in terms of consumers being accepting of a little bit of a higher price point. And what we're seeing is the fact that the deals that we're seeing today, yes, they're a little bit sharper than what they were pre-recession, but the traffic is there. So I'd say we're seeing just as much traffic but the markdowns are little bit deeper than what they would have been before the recession.
SIMON: Miss Telsey, do you see a number of retailers that seem to be particularly noteworthy this year, seem to have the right strategy, right time, well done?
Ms. TELSEY: I think there is. I think for the first time we have the season where discretionary items, there's newness in the assortment, retailers are giving customers what they want, and the prices aren't so low for some of them. Think of Apple - the iPads and the iPhones, very popular, lots of traffic, not a cheap item and it's selling through well. Take a look at what Macy's is doing. Macy's has localized assortment in different regions of the country and it's drawing in traffic.
SIMON: At the same time, Miss Telsey, are you seeing what might amount to permanent changes that retailers are making as we see the persistence of a tough economy?
Ms. TELSEY: Yes. Retails have made significant changes. The expenses that they've cut back over the past 18 months, a chunk of those expenses are not coming back. They're watching their holiday seasonal help very carefully. There definitely is a pickup in holiday season hiring this year, which is encouraging, but those payroll hours are carefully watched. Inventory levels, another key item that is a change from how they've managed their businesses in the past. They're ordering what they need, not as much what they want, in order to give consumers just enough but then flow in new goods. The goal is to be in stock but not to have too much inventory leading to markdowns.
SIMON: And I think the ultimate question that a lot of consumers are going to have, certainly, is - is there a direct relationship between hiring for this Christmas shopping season and perhaps an increase in the number of hires as we get into 2011?
Ms. TELSEY: Typically the rule of thumb has been for the holiday hiring that a retailer does, around 25 to 30 percent of those holiday seasonal sales help could be considered for permanent help. And certainly if we get a good holiday season, could we see that number go higher? That would be encouraging.
SIMON: And finally, any trends you're watching?
Ms. TELSEY: We're watching the trends in footwear. We're watching the trends in the high end. Luxury goods seem to be performing quite well. And we're watching consumer electronics very closely.
SIMON: Thanks so much for being with us, Ms. Telsey.
Ms. TELSEY: Thank you for having me.
SIMON: Dana Telsey, CEO of the Telsey Advisory Group, joining us from the studios of the Radio Foundation in New York City.
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