American's Shop till they drop: Record Thanksgiving Sales for 2011

In my Earlier blog Exagerrated Poverty Levels in the USA, I was mentioning how the American media was projecting the state of affairs of US economy and particularly the poverty levels. While there are cries over increasing poverty, falling salaries, increasing unemployment numbers a surprising and contradictory scenario emerged from the Thanksgiving sales.

Thanksgiving apart from being an American tradition is the most happening Sales season in the US, where the retailers and consumers across the country and from neighboring countries get into a shopping frenzy.

What's rattling are the emerging numbers from the National Retail Federation (NRF), USA. NRF reported that estimated sales of $52.4 billion during the four-day weekend, up from $45 billion last year. With 9% unemployment numbers and $15 trillion in debt, this is rather surprising figures. The consumer spend continues and no conservatism seems to ever return. Whatever the news of bad economy and recession are the spending in the holiday season has not on held on but also rose year on year.
The retailers make about 20% of the revenue over the Thanksgiving weekend sales which typically lasts 4 days.

Annual revenue earned by Indian I.T. which is estimated $88 billion in revenue in 2011 according to Indian I.T. trade group, NASSCOM looks like a ridiculous figure comparing what the retailers make in an year which is around $500 Billion. One could imagine how deep the consumerism in the US is and how it drives the debt, prices and costing skyward.The same spending can not only eradicate poverty and hunger in the US but the world over !!!!
 

A few observations

1. Exceedingly heavy promotions this year, couple with staggered store openning times drew more consumers. More stores participate and many opened at midnight or even earlier - during Thanksgiving Thursday - rather than waiting until 5 or 6 a.m. as they used to.This added shopping hours in peak season mean that year-on-year comparisons will be skewed. For example Walmart opened it stores at 10pm instead of 12am Kohls and Target opened early at 12am. Many retailers followed this suite. For myself I had my own road map based on store openings. There were beelines everywhere huge huge lines. Even the afternoon sales at North Face and Coach outlets had a line for getting into to the store and billing. North face we stood in entry line for 30minutes and another 55 minutes for billing. 
2. What was ironic was most of the Apparel and few regular consumables have been marked up by atleast 15% in comparison to last year.Add inflationary measures the cost of merchandise has actually increased. Am pretty sure that the basket size of shopper definitely shrunk this year compared to earlier years.
3. Thirdly the hardships of 2008 seems to be taken care as of today, as many consumers either got of debt or reduced their debt or refinanced it better. With worse off shoppers did manage to indulge in some impulsive buying suppressed previously.
4. To sum it up the observed human condition behind the supposedly bullish Thanksgiving weekend sales indicates a bearish consumer mindset. Even though small-scale personal anecdotal experience is rarely cause for significant investment action, the nature of the encounter serves to reinforce my belief that the so called bullish Black Friday sales numbers were borne out of both consumer and seller desperation rather than some sort of resurgent confidence.

Behind the Statistics of NRF, ShopperTrak
Here is the survey method from NRF.
The survey, conducted Nov. 24-26 by BIGresearch for NRF, polled 3,826 consumers and has a margin of error of plus or minus 1.6%.* NRF’s definition of “Black Friday weekend” includes Thursday, Friday, Saturday and projected spending for Sunday. The survey estimates number of shoppers, not number of people. 
 

For a person like me who had been working with statistics for a major part of my career can say the sample set is rather misleading and too unrepresentative of the actual population. The numbers given out by NRF are sample projection to a population and not actual numbers by any means. There is a significant error factor in the same. More so going by the Thanksgiving numbers it is highly improbable to predict how the rest of the holiday season which is to follow will pan out. Dampening, fatigue is never ruled out looking at 2008 numbers.
Secondly the shoppers numbers is actually traffic and not count of people who shopped. In traffic it is again an estimate of people who went to a shop.

Some more Interesting Numbers
$11.4 billion Retail sales on Black Friday alone.
28.7 million Shoppers who visited stores and websites on Thanksgiving Day
37.8 % Spending done online
48.7 % Shoppers went to department stores
37.5% Shoppers went to discount retailers
51.4% Bought clothing and accessories 39.4% Bought electronics 32.6% Bought toys
More than 9,000 People waited outside the Macy’s flagship store in New York City’s Herald Square for a midnight Friday opening
$2Price of waffle irons that set off a frenzy – or a “near-riot” as some have called it – among shoppers at a Walmart near Little Rock, Ark
20 People injured at a Los Angeles area Walmart when a woman eager to buy an Xbox 360 reportedly pepper sprayed her fellow shoppers


Financials
On Black Friday alone, retailers raked in an estimated $11.4 billion, up 6.6% from last year, according to ShopperTrak. It was the biggest year-over-year increase since an 8.3% surge in 2007, and easily surpassed the anemic 0.3% growth rate reported last year. Nationwide, about 227 million shoppers visited stores and websites during the long weekend, up from 212 million last year, the retail federation said. Foot traffic on Black Friday jumped 5.1%, ShopperTrak said.
Spending during the period is closely watched by retailers to gauge how sales might go in the final sprint before the holidays, and is also monitored on Wall Street because consumer spending accounts for about 70% of the U.S. economy. The market loves the news flow overall, by close of trading, the Dow Jones industrial average was up 291.23 points (2.59 %), the S&P 500 gained 33.88 points (2.92%).