Holiday shopping starts strong in a weak economy

Posted By on November 30, 2008

woman shoppingConsidering the economy is weak, Americans when on a shopping spree the day after Thanksgiving this year, in fact retail sales were up about 7.2% over last year, according to the National Retail Federation. They also reported that 172.9 million made purchases from Friday and on through the following Saturday and Sunday. This “first holiday weekend” has often been looked at as the test for retailers as to what sort of holiday season they might have — but history has shown a strong first weekend doesn’t always translate into strong sales though the holiday season.

Analysts also fear that retailers are driving sales with rock-bottom price promotions — which started in early November this year — that could kill profits and hurt rather than help retailers already struggling to stay afloat. “Because they’re promoting so heavily, it’s going to affect their margins,” stock analyst Jennifer Black says. “Some retailers will lose money even though their sales are up. The bottom line is that (retailers’) bottom lines are shrinking.” Combine this with a shorter holiday shopping season, 27 days this year instead of 32 last year, and retailers who are already struggling to remain afloat might not earn enough to survive a recession.


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