Wolf Richter: Strung-Out Consumers, Desperate Retailers, Crummy Sales

By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Testosterone Pit.

During this festive time of the year, the whole world is intensely focused on American consumers, watching their every move under a digital microscope to parse if the universe is going to live or die. Retailers and the media joined forces to create hoopla and excitement and frenzy and the perception of once-in-a-lifetime deals. Stores opened on Thanksgiving, stayed open late at night, and opened early in the morning. And consumers dove right into this extravaganza.

Chaos, mayhem, melees, and stampedes ensued. Black Friday Death Count arrived, I don’t know how, at 1 death and 15 injuries that day, and 7 deaths and 90 injuries since 2006, from shootings – over parking space, obviously – stabbings, tramplings, collapses, fights, pepper sprayings, exhausted shoppers falling asleep at the wheel…. “Because only in America people trample each other for sales exactly one day after being thankful for what they already have,” is how a tweet explained that phenomenon.

The sacrifices of shoppers who paid the ultimate price, or almost did, will not be wasted. They did their patriotic duty and obeyed orders and went out there and, despite immense difficulties and bad weather, fought it out in the trenches, often mano-a-mano with other shoppers, to further our national goal of borrowing money to buy more baubles, devices, and rags made in distant countries and then re-exporting the detritus for recycling. The world economy is based on this. American consumers merely execute the plan.

This year, the shopping season from Thanksgiving to Christmas Eve is very short, 27 selling days, as opposed to 33 last year. Consumers will have to focus. They will have to buy more, as every year, but do so in 18% fewer days. It will be a short and intense shopping binge. They must not take prisoners. They must shop till they drop, and when they drop, others must trample over them without slowing down. And Thanksgiving weekend should have been the glorious beginning of this wondrously spiritual holiday season.

What the world got instead was a fiasco. The sacrifices of those patriotic shoppers who paid the ultimate or nearly ultimate price to crank up the Chinese economy were, according to preliminary data, wasted.

On Saturday, research firm ShopperTrak, which uses video surveillance in 60,000 retail stores, estimated that foot traffic on Thursday and Friday rose 2.8% from last year, to 1.07 billion store visits. It extrapolated that retail sales increased 2.3% to $12.3 billion. But Thanksgiving shopping is new, with many big retailers open for the first time. So Thursday’s excitement was followed by a Black Friday debacle, when foot traffic plunged 11.4% and sales 13.2%.

Giddy media outlets spun this as good news – until the National Retail Federation poured ice-cold water on it. Its crummy results were not based on cash that someone counted but on surveys of 4,464 consumers, conducted on November 29 and 30, with a margin of error of plus or minus 1.5%. This early in the game, there are no real numbers.

It estimated that, in terms of foot traffic, over 141 million “unique shoppers” hit the malls by the end of the weekend, up from 139 million last year. More people were coming out, but…. On average, each shopper spent only $407.02, down 3.9% from last year. Total spending fell 2.9% to $57.4 billion.

Despite Thanksgiving having been turned into a shopping day! Retailers are now discovering: it’s a zero-sum game, where the frontloading to Thursday cut sales for the rest of the weekend. Expenses were the only thing that went up. If inflation is added into the equation, the total decline for the weekend amounted to a gut-wrenching 4%!

It was the first drop in at least seven years! Even the catastrophic Thanksgiving weekend of 2009 was roughly flat. Instead of spending more money in less time, as they were supposed to, consumers are spending less money in more time. A toxic mix; many retailers get 40% of their annual revenues from the holiday shopping season.

Doorbuster bargains are biting back as strung-out consumers resort to “mission shopping.” They hone in on that TV like a heat-seeking missile, grab it, fight off challengers, manually if necessary, forgo impulse purchases that would allow the store to make some money, and leave.

“They had an absolute plan,” Thom Blischok, Chief Retail Strategist with Booz & Company’s retail practice, told Bloomberg. Every single one of the 300 or so shoppers he spoke with on Thanksgiving and Friday had a list. “I found virtually no browsing,” he said. That’s how I’d do it if I were crazy enough to go shopping on those days.

Nevertheless, the NRF stuck to its forecast for total sales in November and December to increase 3.9%. How could that be imaginable? “December will be a hugely promotional month to get those remaining shopping dollars out there,” said Pam Goodfellow, a director at Prosper Insights & Analytics, which conducted the survey for the NRF. “Retailers will be very aggressive.”

Online sales leave some room for (possibly false) hope. Over the weekend, they accounted for 44% of total sales, up from 41% in 2012, according to the NRF survey. Adobe Systems, which analyzed 400 million visits at over 2,000 websites, figured that online sales jumped 18% to $1.062 billion on Thanksgiving, and 39% to $1.93 billion on Black Friday. comScore reckoned that online sales rose 3.1% to $20.6 billion in November, over a quarter of which likely went to a single mastodon, Amazon, ahead of EBay and Walmart.com, with Thanksgiving sales up 21% to $766 million and Black Friday sales up 15% to $1.2 billion. The huge discrepancies? They’re all just guessing.

It will be tough for the miracles of e-commerce to overcome the brick-and-mortar debacle. Consumer confidence has been plunging in recent months. No wonder: Booz & Co. found that 65% of Americans were living from paycheck to paycheck, up from 61% last year, as wages at the lower end of the scale have not kept up with inflation – and for many workers have actually declined. Those are the lucky ones. Because there are still 1.5 million fewer jobs than there were in 2008.

But the Fed has taken good care of the economy. Its ceaseless QE and ZIRP have lost savers about $300 billion in annual income and have inflated stock prices by $14 trillion in five years. Corporate cost cutting and financial engineering have replaced revenue growth as driver for upticks in earnings per share, though that too seems to have run out of steam. Neither the Thanksgiving doorbuster hoopla nor the chaos it caused can hide the inconvenient fact that American consumers live in the real economy, a rather drab place, not the glittery one that the Fed inflated into gorgeous bubbles.

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  1. George Hier

    Every single year they report that volume is down, and that stores will have to cut prices aggressively. This is a lie. It is an annual advertising gimmick that is perpetrated on the American people, with the journalists as compliant (complicit?) enablers. The intent is to trick you into thinking there are great sales out there, so you go out and buy. The man on the telly wouldn’t lie to you, would he?

    Come January, every January, of every single year, we find that sales have gone up a nice 2-6% over the last year. That kind of growth exists regardless of recession or not. Any other industry would kill for those kinds of guaranteed returns. The retail industry, however, is careful to play their victimhood card every December. They know how to keep the good times rolling.

    1. Jim

      It may be the reverse…that 2-6% increase that retailers report to CNBC, et.al., in January may be the “gimmick” number. Anecdotally, I found shelves, including electronics, quite full on Sunday, with small crowds and quick checkout lines. In short, I don’t think that the retailers’ revenues will be that great, and they haven’t been that great for a long time. The sales “news” stories might be a fabrication (the really good sales aren’t until after Christmas, when I do most of my shopping for next year), but these shoppers surveys seem pretty legitimate, I believe.

      1. Stan Musical

        Perhaps a cohort of Americans should start giving presents on one of the latter 12 days of Christmas. I’m all for that; I’d much rather wait until early January to get 9 ladies dancing rather than a single partridge in a pear tree (though an Asian pear tree would level the field a bit).

  2. bbot

    Black Friday Death Count arrived at, I don’t know how, 7 deaths and 90 injuries from shootings

    That’s the all-time count. This year it was only 1 death and 17 injuries.

    1. Yves Smith Post author

      Yes, he caught that and sent a correction, but I had turned in, so the uncorrected version stayed up longer than it should have. Apologies.

  3. Huxley

    Oh, the humanity!

    A man is rich in proportion to the number of things he can afford to let alone.
    Henry David Thoreau

  4. DakotabornKansan

    “If TV has taught me anything, it’s that miracles always happen to poor kids at Christmas. It happened to Tiny Tim, it happened to Charlie Brown, it happened to the Smurfs, and it’s going to happen to us.” – Bart Simpson

    As our annual orgy of self- indulgence commences…there is the inconvenient fact that American consumers live in the real economy, a rather drab place, not the glittery one that the Fed inflated into gorgeous bubbles.

    “Oh look, yet another Christmas TV special! How touching to have the meaning of Christmas brought to us by cola, fast food, and beer…Who’d have ever guessed that product consumption, popular entertainment, and spirituality would mix so harmoniously?” – Bill Watterson, Calvin and Hobbes

    Whatever became of the true meaning of Christmas? LOL!!!

    “Because only in America people trample each other for sales exactly one day after being thankful for what they already have.”

    During this time of festive, holiday cheer, why do so many still treat others so poorly?

    “I got up one Christmas morning and we didn’t have nothing to eat. We didn’t have an apple, we didn’t have an orange, we didn’t have a cake, we didn’t have nothing.” – Muddy Waters

    The poor are treated as freeloaders and losers; while the plutocrats take their “entitlement” for granted.

    But for those who know what it means to live a hard life, they look for the light in even the darkest of places.

    Dostoevsky’s “Heavenly Christmas Tree”:

    “Come to my Christmas tree, little one…Oh, what a Christmas tree! And yet it was not a fir tree, he had never seen a tree like that! ”

    “Christ always has a Christmas tree on this day, for the little children who have no tree of their own…”

    And down below in the morning the porter found the little dead body of the frozen child on the woodstack; they sought out his mother too…. She had died before him.

    “I keep fancying that all this may have happened really—that is, what took place in the cellar and on the woodstack; but as for Christ’s Christmas tree, I cannot tell you whether that could have happened or not.”


    That there are any homeless kids in this country, when so few have so much wealth, is indeed an embarrassment.

    “How unbearable at times are people who are happy, people for whom everything works out.” – Anton Chekhov

    1. James Levy

      I am thankful for one insight that sustains my beliefs: that I owe everything to my parents, my older brother, the love of my wife, and the good council and support of a few key friends and teachers. My input has been, by comparison, marginal, as the work I’ve put in and the effort I have shown would have meant nothing but for the efforts of others. No matter what good fortune may smile on me, I owe everything to the love, help, and guidance of others. Perhaps this does not make me as proud and self-satisfied as a man who imagines he did it all himself, but it does make me grateful, which I think is a better place from which to contemplate our life here on Earth.

      1. Sammy Maudlin

        “Perhaps this does not make me as proud and self-satisfied as a man who imagines he did it all himself”

        Maybe, but you’ll avoid becoming the tragic hero of a Pink Floyd song!

        Dogs (Waters/Gilmour)
        And when you lose control, you’ll reap the harvest you have sown.
        And as the fear grows, the bad blood slows and turns to stone.
        And it’s too late to lose the weight you used to need to throw
        So have a good drown, as you go down, all alone,
        Dragged down by the stone.

        …I think the alternative is better, too.

  5. diptherio

    “In this life I have been blessed in that I never needed anything until I already had it.” ~Rabbi Pinhas of Koretz

    Can there be any more incontrovertible proof of our absolute destitution as a society than this “Black Friday” nonsense? What pathetic creatures we make of ourselves. When the hungry ghosts come out to feed, you better watch yourself!

    1. anonymous

      One needs to look at merchandise sales for the entire season to draw any conclusions, since a lot of the merchandise has been on sale at least as far back as the beginning of October. I’ve been getting 30, 40 and occasional 50% off promotional e-mails from major retailers for weeks and weeks. There is no reason to shop on Thanksgiving or Black Friday.

    2. Stan Musical

      Or as it says in the Laozi aka Daode Jing: 知足之足常足矣, roughly translated “the only permanent satisfaction is the satisfaction of being satisfied.”

  6. Eleanor

    A young woman at the Y told me she and her mother always go shopping together on Black Friday. Usually the stores are jampacked. This year when they reached Kohl’s early in the morning, the store was almost empty. The shoppers had come and gone on Thursday.

  7. Claire

    Mr. Richter,

    Here’s what we do for Christmas. A group of us park our five cars at at a local high end mall (the Village in Corte Madera) next to the freeway, get in a minivan and drive a few miles to a small town where there is a Christmas Craft Faire.

    There we buy items that are hand made by Americans in and around the area. We then walk around the town and patronize stores that have put up Christmas decorations and acknowledge our authentic national heritage. We boycott the few that pretend that it doesn’t exist.

    Everyone pays with cash as a deliberate means of helping the merchants, starving the credit card company parasites of their percentage and taking numbers away from this barbarous practice you’ve outlined in your article.

    Several people live near you Mr. Richter. Maybe next year you could walk up to Francisco Street and ride over with us?

    1. Brian M

      Claire makes a lot of good points. However, language about “authentic American heritage” and “punishing” some retailers makes me very nervous. This is the language of the Christian Fundamentalist rightwing.

      I would also note that the heritage is not that “deep”. New England looked very askance on Christmas, which is not “Christian” in any way. This is another 19th century Victorian creation.

      1. James Levy

        This point about Christmas being a 19th century invention is completely untrue. It was celebrated differently before the 19th century, but it was most assuredly celebrated. Yes, the New England Puritan tradition was hostile to it, but the fact that the Rump Parliament under Cromwell had to ban Christmas festivities proves that Christmas was being rather raucously celebrated in the 1640s, and we have references to English Kings back as least as far as Richard II celebrating Christmas (he went to Reading, his favorite cathedral, for mass on Christmas). For Catholics, it was a holy day of obligation.

        1. NotTimothyGeithner

          I think the issue is the American consumer Christmas. The older Christmas celebrations and world wide ones which aren’t too American more closely match a July 4th style event but with winter and less jingoism. They have quirky events, but they weren’t producing videos of kids tearing apart living rooms when they received a Super Nintendo.

  8. Massinissa

    A man with 1000 times the wealth as an average man is still unable to buy 1000 times the number of shoes and shirts.

    Consumers finance the economy, not the 1%.

    And they have no money.

  9. gozounlimited

    With 3.6 million workers with wages at or below the federal minimum retailers have already skinned the cat…. no discretionary income for bull shit. If retailers paid a living wage they would be blessed with consumer reciprocation, however, lacking the understanding of capitalism…. retailers are goin down…. waaaaaay down. Audios greedy f’ers. Got to pay to play….

  10. mk

    “Booz & Co. found that 65% of Americans were living from paycheck to paycheck, up from 61% last year, as wages at the lower end of the scale have not kept up with inflation – and for many workers have actually declined. Those are the lucky ones. Because there are still 1.5 million fewer jobs than there were in 2008.”
    thank you for pointing out that average Americans’ wages have declined. this piece of information was missing from all the retail reports i heard on my local NPR stations.

    personally, i prefer “buy nothing day”, let the corps buy from each other.

  11. Brooklin Bridge

    Retailers need a mandate placed on consumers. Fast. US citizens MUST buy what retailers tell them to buy at unregulated prices made by retailers. In return for this pool of customers, retailers are willing to let the government enforce this contract at taxpayer expense. However, because -as everyone knows- government is so inept at whatever it does, retailers retain the right to determine, without challenge allowed by state or citizen, the increasingly severe penalties for late payers, doubly so on those deadbeat hangers on who claim inability to pay. Triple penalties for the old song and dance about bankruptcy. Quadruple that if they have proof.

    1. Sammy Maudlin

      What, you mean like a tax on every American that doesn’t purchase a proper level of consumer goods? Perhaps punishable (at first) by silent liens on property and potentially denigrating your credit rating, maybe later escalating to levies and criminal prosecution?
      Guffaw! There’s no way Congress would ever pass such a law. First, they’d be hanging from the lampposts the very next Monday! Even if they did, the Supreme Court would surely strike down such a law as an unconstitutional taking.

      Oh, wait…

  12. sharonsj

    I refuse to go shopping on Thanksgiving and here it is Tuesday and I have yet to set foot in a store to buy anything. Instead I spent a wad of cash at a Sunday flea market, mostly buying up silver jewelry as a hedge against the inevitable burst bubbles, because I think the American consumer is doomed.

  13. justanotherfakename

    I work in an electronics store, buying and selling. On line sales up a bit but walk in traffic way down, and the on line does not make up for lost in store sales. Total sales down about 20% overall from my experience. The short month won’t help. Bad!

  14. Sammy Maudlin

    Give me convenience OR give me death
    – Dead Kennedys

    Granted, the vast majority of Americans behaved themselves in a completely civilized manner on “Black Friday” Still, the power that marketing has over the behavior of Americans is truly frightening. That so many could be driven to think they NEED to go fight the crowds and endure high levels of stress to obtain an unnecessary item(s) at what amounts to a nominal discount is a credit(?) to the power of, and in the investment retailers make in, marketing.

    Apparently retailers are trying to find the optimal level of investment in marketing vs. discounts to maximize profits over Black Friday:


    Looks like a little too much was placed on the marketing side of the ledger this year. Lots of foot traffic: less purchasing. Of course, it’s not that the discounts weren’t good enough, the economy is to blame! It couldn’t just be that Americans may be gullible enough to be lured out to shop, but smart enough to realize they aren’t getting a deal, could it?

    1. James Levy

      Sammy–loved the show with Bobby Bittman.

      Yes, I have a perpetual argument with students over the influence of advertising and popular culture. You face a room of 25 Freshman, all dressed the same, all dressed like any 25 Freshman in any university in North America, and they will swear on a stack of Bibles that they are individualists completely impervious to advertising.

      What makes it more insidious is that somewhere between Huntley, Brinkley, Cronkite, and today, the news media became cheerleaders for this insanity. Local news shows are like booster sessions out of Babbitt. The clarion call to spend is all-pervasive. Too bad all the “Christians” (and I was raised one and have nothing against its principles) who denounce gays and abortion and premarital sex spend no time whatsoever demanding that we keep holy the Sabbath and give up all we have and follow Christ. One wonders how Fundamentalist get around that injunction.

      1. Sammy Maudlin

        Thank you James, although much of the credit goes to my amazing guests and my co-host William B. Williams. They are WHAT MAKES THIS TOWN GREAT!

        I’m always loathe to point the finger at a particular group for any societal ill. No doubt churches of all denominations could be more effective in seeing that Americans actually get to enjoy a “sabbath” at least once in a while. However, I will agree there is some connection between the “protestant work ethic” possessed by many Christian fundamentalists and the rampant consumerism we see in this country.

        To me, the news is just another form of marketing at this point. When they aren’t selling their own importance (Chicken Little “Storm Team” forecasts and such) they’re selling their sponsors and their interests. In Milwaukee you can rarely get through any “news” broadcast without the Packers (or the Brewers) being one of the “top stories.” Redunkulous.

      1. Sammy Maudlin

        From the article above upon which you commented:

        “More people were coming out, but…. On average, each shopper spent only $407.02, down 3.9% from last year. Total spending fell 2.9% to $57.4 billion.”


  15. Roquentin

    Baudrillard was quite right in The Consumer Society when he stated that in the latter half of the 20th century, the evolution of the capitalist system went from forcing people to adopt the capitalist mode of production to training them to consume. With advances in technology, turning people in to the proletarians necessary to produce items became less relevant than convincing them that they needed the products necessary to justify capital accumulation. Ideologically, I think we should view Black Friday more as a kind of capitalist “call of duty.” Not unlike Uncle Sam beckoning one to serve one’s country, we are called upon to sacrifice our livelihoods and undergo privation to buy things we don’t need each year to ensure that American retailers stay profitable.

  16. Vedicculture

    Poor post.

    Online sales surged 20% and foot traffic means nothing.

    You won’t know to December.

    Please post better.

    1. James Levy

      Online sales are still a fraction of total sales so a rise their will most likely not make up for a fall in traditional store sales. You are correct that we do not know, yet, but there are indicators and some evidence that overall sales are down. Your own claim that online sales are up 20% is itself conjectural at this moment, as all the numbers are hardly in. If you want to point out that the article may be premature, that is fine, but in and of itself it is not a bad preliminary report on what is going on.

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