Question

What is the significance of Black Friday?

Answer

If you define the “holiday season” from the Friday after Thanksgiving to December 24th, you see a disproportionate amount of sales on Black Friday. Normally, within that period, we should see 3.3 percent of sales per day, but on Black Friday, we see 10-12 percent of all holiday sales. This is extremely important for retail.

Q

Is Black Friday actually the biggest shopping day of the season?

A

Yes, because so many people have that Friday off. What’s more is that, generally, the weather is better the day after Thanksgiving than it is right before Christmas. An interesting note here also, is that December 26th is actually the second-largest shopping day of the season, because of all of the returns.

Q

With gas prices so high, what does this mean for retail?

A

The impact of the increased gas price is overstated. Take for example; if gas is 10 percent of a person’s budget, and the price of gas goes up 20 percent, gas still only takes up 12 percent of one’s budget. That 20 percent increase makes it seem much worse than it is. With this in mind, I don’t think it will have much of an effect; actually, I think holiday sales will be up from last year.

Q

What role does online shopping play in holiday sales?

A

Overall holiday sales were $456 billion in 2006, which represents about 20 percent of total sales revenue for the year. Overall online holiday sales were $24.6 billion in 2006. That means that about 5.4 percent of all holiday sales were made online in 2006. Online shopping is growing rapidly, about 20 percent a year, but shopping is still overwhelmingly done in person.

Q

What role do holiday sales have in our economy?

A

They are important. One month represents 30 to 40 percent of yearly sales. It can also turn an unprofitable company into a profitable one. In that sense, it has a substantial effect on retail employment. So I would say that it is big for retail, but less significant for our economy.