CURE FOR POST-ELECTION BLUES

Retailers banking on Black Friday

Now that Election Tuesday is over, retailers are counting on Americans turning their attention to Black Friday.

The National Retail Federation projects that about 137.4 million consumers will make purchases in stores or online over the four-day weekend that started on Thanksgiving, marking the kickoff to the holiday shopping season. The amount Americans have spent has declined in the last three years, slipping 26 per cent from 2013 to an average of US$299.60 per person last year, according to the trade group.

By most accounts, this holiday season is expected to be a boon for retailers. Unemployment, gasoline prices and inflation are low, while wages, home values and the stock market continue to rise.

Shoppers have the wherewithal to spend, and now retailers are hoping the holiday season will give them a reason to do so.

Companies such as Kohl’s Corp., Gap Inc. and Barnes & Noble Inc. have said the U.S. presidential election was a major cause of consumers’ recent reluctance to open their wallets. With the outcome settled, they’re expecting the dollars to finally flow.

“We’ve had some, we believe, pent-up demand ,” J.C. Penney Co. chief executive officer Marvin Ellison, said this month. “We’re anticipating we’ll see pent-up demand released, and it being postelection will only help that.”

U.S. retail spending is expected to rise 3.6 per cent to US$655.8 billion in November and December, the Washington-based NRF estimates.

Retailers are poised to take full advantage of the Thanksgiving holiday period, now known by some as Black Week, which accounts for about 15 per cent of holiday spending, according to the trade group.

J.C. Penney opened its doors at 3 p.m. on Thursday to reach shoppers before they tucked into their Thanksgiving feasts.

EBay Inc. is trying to push the selling even earlier: It rebranded the day before Thanksgiving as Mobile Wednesday, using discounts to target travelling Americans.

The sales will stretch through the weekend, with online and brickand-mortar companies offering deals for Cyber Monday.

Investors are confident the retail industry will see strong sales. The Standard & Poor’s 500 Retail Index has risen 4.9 per cent so far in November and is on pace for its best monthly return since July. Retail stocks have outpaced the broader market since the U.S. presidential election, with the index up 4.7 per cent since Nov. 8, compared with the broader S&P 500’s three per cent rally. Historical studies indicate that elections affect the timing of retail sales rather than the overall volume, said Jerry Storch, CEO of Hudson’s Bay Co.

“Hopefully, when we get to Black Friday, which really tolls the bell of holiday shopping, then the consumer will start looking forward to Christmas,” Storch said.

That would be a welcome development for merchants that have yet to see a sales bump materialize. Dollar sales in the second week of November were eight per cent lower than in the same period a year earlier, according to research firm NPD Group. The decline was broadbased, too, with drops in apparel, toys, technology, athletic footwear and perfumes, the firm said.

For shoppers who are ready to spend, they have more ways than ever to do so, with retailers including Wal-Mart Stores Inc. and Amazon.com Inc. offering exclusive deals to customers who download their mobile applications.

Non-store sales may increase seven to 10 per cent this year, reaching as much as US$117 billion, according to the NRF.

Hopefully, when we get to Black Friday, which really tolls the bell of holiday shopping, then the consumer will start looking forward to Christmas.