A blog for all things retail and licensing.
TwitterFacebook

Thanksgiving and Black Friday Spending Strong As Shoppers Sought Early Promotions

Guest Blog By Rikard Bandebo

Black Friday kicked off the holiday shopping season with a bang, providing many retailers with an important consumer spending boost – despite the challenges faced in the wake of Hurricane Sandy. Many merchants attracted more customers by opening their doors on Thanksgiving and expanding their shipping and layaway options to simplify shopping.

The First Data SpendTrend report is proprietary research that tracks same-store consumer spending by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks at U.S. merchant locations.  The 2012 Black Friday SpendTrend report compared Black Friday 2012 spending against 2011 numbers. Findings showed that sales were strong, with the following overall same-store retail growth rates:

  • Dollar Volume: +5.6 percent
  • Transaction: +3.6 percent
  • Average Ticket: +1.9 percent

Retailers experienced a healthy dollar volume growth (DVG) of 5.6 percent during Thanksgiving and Black Friday, compared to 6.3 percent in 2011. Seasonal merchandise discounts lured shoppers into clothing and clothing accessory merchants, who saw a DVG of more than 10 percent. General merchandise stores saw similarly positive results, with a DVG of more than 9 percent; we attribute this to the fact that many of these stores expanded their layaway options and also offered price matching.

Building materials, garden equipment and supply dealing retailers were the leading categories, with a 14 percent DVG (compared to about 8 percent in 2011). Our research shows that this channel’s strong performance results from an overall improvement in the housing market, rebuilding efforts following Hurricane Sandy, and shoppers purchasing holiday decorations.

Retailers’ healthy DVG can be traced back to the fact that consumers increased how much they were spending during each shopping trip – there was nearly a 2 percent increase in average tickets. Merchants helped drive sales and spending by decreasing their focus on clearing out inventory through lower margins. While the reduced discounting did not affect general merchandise stores’ DVG, it did result in a lower figure for furniture and home furnishing stores.

From a geographic perspective, most regions in the U.S. saw a boost in DVG. Much of the weather across the nation was crisp and clear, helping drive consumer foot traffic. The West and the Southwest led all other regions with DVGs of 7.2 percent and 6.7 percent, respectively. Spending was healthy in New England and the Middle Atlantic, with DVG of 1 percent and 4.3 percent, but they were the slowest growth regions since many consumers had reassessed their holiday budgets after having purchased generators and building supplies in the aftermath of Hurricane Sandy.

Overall, this year’s Thanksgiving and Black Friday showed impressive growth considering tough 2011 comps and that the retail DVG has been around the 3 percent range for the past few months. The holiday spending rush seems to have started off well and merchants will monitor shoppers in an effort to sustain the growth throughout the season.

Rikard Bandebo is vice president and economist at First Data. First Data SpendTrend, a macro-economic indicator, is based on aggregate same-store sales activity in the First Data Point of Sale Network. First Data SpendTrend does not represent First Data’s financial performance.

Leave a comment

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>