Today’s POV blog

According to Wikipedia, the term Black Friday refers to the Friday following Thanksgiving Day — the beginning of the traditional Christmas shopping season — and used by the media to refer to the beginning of the period in which brick-and-mortar (physical store) retailers go from being in the red (i.e., posting a loss on the books) to being in the black (i.e., turning a profit).

Upon opening — sometimes as early as midnight and staying open for 24 hours — retailers offer deals and loss leaders to attract shoppers. Sales during the Christmas season can represent 50% or more of a retailers’ annual sales.

The term Black Friday is believed to have originated in Philadelphia in the 1960s in reference to the heavy traffic on the day after Thanksgiving. While most of the US saw the heavy traffic ending up at shopping malls, total sales for the day are reported at $10.66 billion; up only about 0.5% from the same day last year.*

Additionally and according to Shoppertrak.com:

• Year-Over-Year Retail Sales Rose 0.9 Percent for Week Ending November 21*
• Year-Over-Year Retail Sales Rose 0.7 Percent for Week Ending November 14, Week-Over-Week NRSE Sales Increase 7.5 Percent*

*Information provided by National Retail Sales Estimate (NRSE), Retail Traffic Index (SRTI) and ShopperTrak RCT Corporation.

The term Cyber Monday, according to Wikipedia, refers to the Monday immediately following Black Friday — a day that symbolizes a heavy traffic for online retailers. While Cyber Monday is not nearly as well known as Black Friday, there does seem to be a direct correlation between the popularity of the event and the increase in and shift of brick-and-mortar sales to online sales.

In a quick review of three key indicators — borrowing, spending, and working — the word for the holidays seems to be “proceed with caution.”

This week the US Federal Reserve unanimously agreed to keep near zero the cost of borrowing money for an extended period.

According to TradingEconomics.com, the United States unemployment rate stands at 9.80 percent. (The labor force is defined as the number of people employed plus the number unemployed but seeking work. The non-labor force includes those who are not looking for work, those who are institutionalized, and those serving in the military.)

In the national employment report compiled by ADP, non-farm private employment was reduced by another 203,000 from September to October 2009. However, October was the seventh consecutive month in which the decline in employment was less than in the previous month.

ADP projects that despite recent indications that overall economic activity is stabilizing, employment, which usually trails overall economic activity, is likely to decline for at least a few more months.

In light of high unemployment rates, Gallup is reporting that Americans are planning to spend about $740 on gifts this year, down from $801 in 2008. 33% today, versus 35% a year ago, say they will spend less, while over half plan to spend about the same amount and 9% will spend more.

Though total sales are expected to be lower this holiday season, U.S. online sales are expected to rise eight percent and reach $44.7 billion. Big-box retailers such as Walmart and Amazon – those able to support discounts – are likely to see the best results.