EDITORIAL: Black Friday

By | Friday, November 28, 2008

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Retailers hope the ink on their balance sheets is black, which means they turn a profit. The financial crisis means that how this shopping season turns out is anybody's guess. The signs from retailers and consumers aren't looking promising (and it's clear that neither President Bush nor President-elect Barack Obama's wants families to load those Christmas stockings with lumps of coal).

Reporter Heather Cobun put it this way the other day: "Sales fell 3.3 percent September to October, leaving retailers scrambling to find ways to survive what promises to be a challenging season." "Challenging" is an understatement. Many shops are offering deep discounts, and BOGO (buy one, get one) is as popular an enticement as ever. One California auto dealer is making what ordinarily would be considered an unbelievable sales pitch: Buy one car, get another for $1. It's all part of meeting the challenge in this historically hard economic times.

The numbers for high-end stores like Saks, Neiman-Marcus and Abercrombie & Fitch are down, while big-box retailers like Wal-Mart and Target are moving in the other direction. Saks sales are down 17 percent compared to last year, Neiman-Marcus, 28 percent; Abercrombie & Fitch, 20 percent. And customers are exactly falling into the GAP, whose sales are down 16 percent. Wal-Mart, the world's No. 1 discount chain, is experiencing an increase in sales of 2.4 percent and No. 2 Target is seeing a 1.7 percent rise in sales (or $14.6 billion). What these numbers reflect is consumers' demand for bargains - a sacrifice, if you will, whether driven by economic realities or moral consciousness.

The National Retail Federation says 128 million people will shop between today, Black Friday, and next weekend. Last year was measurably higher at 135 million. The president and CEO of the federation, Tracy Mullin, offers optimism: "Shoppers who held off buying a DVD player or winter coat over the last few months will find that prices may literally be too good to pass up."

Consumer confidence, which is down by 50 points on the Rasmussen consumer index compared with the beginning of the year, is as grim as Wall Street. Mr. Bush and Mr. Obama are trying to soothe the minds of investors and consumers with fiscal and monetary policy, but a credit crunch remains a credit crunch.

The days of sales assistants saying "cash, check or charge" are over, but cashier registers still ring. Then again, retail sales - or the lack thereof - are not the reason for the season. Don't you agree?

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