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Black Friday Sees Strong Traffic, So So Selling

If Black Friday is any indication, retailers are going to have to fight hard for every sale they make this holiday season.

Consumers were out shopping en masse, but inflationary pressures meant deal-hunting was back in a big way. Even a storewide discount of 30 to 60 percent off didn’t guarantee that cashiers would be ringing up sales.

Given traffic patterns and conversion rates, early projections are that Black Friday this year was shaping up as neither a boom nor a bust.

Retail consultant Gabriella Santaniello of A Line Partners said she and her team were out early taking note of foot traffic and purchasing. Some malls opened at 6:00 a.m., while others, particularly in the L.A. area, opened at 8:00 a.m. or 9:00 a.m.

“Promotions are back to the 2019 pre-pandemic cadence. The malls are busy, but they’re not packed. I think that this is not going to be a frenzied, beat each other up type of Black Friday environment,” Santaniello said.

She also noted that while shoppers were making purchases, the bags they were carrying looked like they were being thoughtful with what and how much they were buying. Some brands that seemed to be cathing the eye of consumers included Victoria’s Secret, American Eagle Outfitters, Abercrombie & Fitch and Bath & Body Works.

“What I’m seeing is people buying key items like fleece tops, Sherpa fleece, the usual holiday items. But I also noticed that while some are carrying multiple bags, the bags themselves are not overstuffed, so I think that maybe units will be down this year,” Santaniello said.

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Retail consultant Walter Loeb of his eponymous firm, said Macy’s flagship on 34th St. in Manhattan had large crowds and solid foot traffic on Friday, but the volume of purchases was tepid. Gift items were promoted on special tables that garnered interest and one area that was “very busy was the Toys “R” Us shop-in-shop, where more people were buying.”

Many have noted that due the inflationary enviornment, top-line sales could see a more robust uptick than net bottom-line results.

Murali Gokki, a managing director in the retail practice at AlixPartners, was tracking mall traffic in the Greater Atlanta area Friday morning and early afternoon. A higher-end luxury mall in the PIttsburgh suburb of Atlanta wasn’t as busy, while the bigger Dunwoody Mall in Atlanta proper, which caters to a broader consumer demographic, was far more crowded.

“It took me 30 minutes to find a parking spot at Dunwoody. Traffic is busy, and a lot of people were shopping with friends and family. Many stores had almost storewide sales ranging anywhere from 30 percent to 60 percent off,” Gokki said, noting that didn’t guarantee an avalanche of buying. He added that gift items and personal care stores such as Sephora and Bath & Body Works, in addition to the Apple store, had lines queuing up waiting to get in.

Fashion specialty chains weren’t particularly busy, although Madewell was the exception at Dunwoody. He said there was a fair amount of “window shopping,” and that people weren’t carrying as many bags. More importantly, “I noticed that as people are walking around, the size of the bags they’re carrying are noticeably smaller,” he said.

Gokki also referred to a survey AlixPartners conducted in which 70 percent of respondents said they planned to look online for items that they want to purchase before they go into a store, up from 50 percent in the year-ago survey. “So to me, it sounds like people know what they want and there’s more targeted purchases happening,” Gokki said.

“There’s good traffic at the higher-end mall and poor traffic at the more value segments of retail,” Brian Ehrig, partner in the consumer practice of global strategy and management consulting firm Kearney said Friday afternoon.

He said parking lots in Nashville were full at the better malls. There were long lines at the registers at specialty fashion chains, but less so at department stores such as Macy’s. Ehrig said given the economic backdrop, he was particularly interested in seeing how well Ross Dress for Less and Burlington Stores were doing.

“It’s very promotional. Most places are offering special deals,” Ehrig said, noting that those discounts ranged from 40 percent to as high as 60 percent. He said that after speaking with colleagues tracking sales around the country, the traffic in the malls seems to be “fairly consistent.”

“Target this morning was like any other regular weekday morning. It was empty around 9:30 a.m.,” Natalie Kotlyar, national leader of BDO’s retail and consumer products practice, said. Kotlyar, who was touring malls on Long Island, said retailers that began their promotions earlier in the shopping season—Target began in mid-October—didn’t see as much traffic on Black Friday, and they also weren’t running as many limited time doorbusters.

She next toured the Americana Mall in Manhasset. The true luxury wing wasn’t crowded, while there was “good foot traffic” and buying at the other wing, which is more aspirational. By mid afternoon, Kotlyar was at Roosevelt Field, where she said traffic was “incredibly high,” with full parking lots.

“I saw a much younger demographic than we’ve seen in years past. There were a lot of teens, a lot of younger shoppers. My guess is that these younger shoppers are buying for themselves. Most of the traffic was at the young teen or teen stores,” she said.

As for traffic patterns within the mall, Kotlyar said that if a retailer didn’t have promotions that suited the customer, that store was empty. “These customers were looking for bargains,” Kotlyar said, adding that the retailers were fully stocked. Most of the traffic was geared toward apparel categories. She was at a retailer that had “decent” promotions for soft home textiles, but sales appeared to be more or less slow and steady. “It’s so easy to buy inexpensive apparel, and the promotions are probably the biggest and most eye-catching,” Kotlyar said.

As for the older demographic, these “customers were buying what they wanted and they weren’t strolling the mall,” she said.

James Gellert, CEO of RapidRatings, called for a decent turnout for Black Friday, but not necessarily a strong selling period. RapidRatings analyzes the financial health of public and private companies to help firms manage supply chain and third-party vendor risk.

“Inflationary pressures will make some goods more expensive while other goods are being deeply discounted to move them off over-inventoried shelves. Keep in mind, a lot of people are licking their wounds from watching their savings and retirement dollars decrease,” he said. “I expect the net of this will be fairly decent turnout at stores but circumspect, conservative spending.

Gellert also noted the broader, big-picture dynamic between larger companies and the smaller businesses and suppliers that are reflected across many industries: “The smartest companies are being conservative and many are right sizing, which is seen in layoffs.  Holiday shopping can’t be robust with this backdrop.”

By the time Black Friday arrived, many consumers had already been shopping online, not only on Thanksgiving Day but also earlier in the week as retailers began unleashing their specials.

Adobe Analytics data said its early estimate for Thanksgiving Day saw consumers spending a record $5.29 billion, up 2.9 percent year-over-year. Mobile shopping drove 55 percent of online sales, up 8.3 percent year-over-year and hitting an all-time record for Thanksgiving. Adobe’s data analytics indicate that consumers so far have spent $77.74 billion in the first 24 days of November. It’s projecting that Black Friday sales could reach $9 billion online, up slightly versus year-ago levels.

Salesforce estimated that online sales on Thanksgiving grew 9 percent to $7.5 billion, while online sales globally saw growth at up 1 percent from 2021.

The National Retail Federation, a retail trade group, is projecting holiday retail sales during November and December will grow 6 percent to 8 percent over 2021 to between $942.6 billion and $960.4 billion. That total includes a 10 to 12 percent projected gain in online sales to between $262.8 billion and $267.6 billion. But S&P Global Ratings credit analysts estimate that retail sales growth could come in as low as up 4.5 percent.

With the hunting for deals, Christopher S. Tang, UCLA Distinguished Professor and Edward W. Carter Chair in Business Administration, said small- and middle-market companies—those with annual volume hitting $500 million at the top end—might be among the hardest hit over the holiday season. With inflation on the rise, he expects shoppers to remain more mindful about their spending as they look for “value for the price they pay.” But he also said consumers are eager to spend money on services, such as travel, dining and entertainment.

“Share of wallet for buying physical products will be lower than 2021. On top of that, due to inflation, sales revenue may go up this year, but the quantity is unlikely to rise,” Tang said.

Black Friday deals at La Rinascente in Milan.

Across the pond, London’s High Streets were packed during the weekend and days leading up to Black Friday as many stores kicked off sales early. Comfortable temperatures helped draw people out, as well as holiday sightseeing.

Dior overtook Harrods’ façade, windows and interior decorations for the holidays showcasing its full range of products through a gingerbread-themed campaign. The basement level holiday shop in Harrods was dense with locals and visitors picking up glass and British-themed ornaments, Christmas crackers and advent calendars. Makeup and fragrance halls were crowded with many people looking at designer candles. Inside Harrods, shoppers revived at the new Dior Café, where handbag-shaped cookies sell for 15 pounds a pop. In general, Harrods’ eateries had long lines of customers waiting for tables.

River Island offered at least 20 percent off all items. The retailer placed holiday party fashion front and center. Lots of red and purple sequin suits, feather-trimmed blouses and bodysuits and metallic dresses.

Primark’s checkout lines at its Oxford Street stores are notoriously long all year. Many shoppers were buying giftable pajama sets and partywear. Merchandise was sorted by color, most notably teal, cobalt blue, purple and Valentino-inspired pink.

Weekday on Regent Street offered 20 percent off all puffer coats. Customers were picking up the brand’s soft recycled polyester and polyamide blend hoods, however. The hood can be layered under tops and outerwear—perhaps a more practical alternative to balaclavas which rose in popularity during the pandemic.  

Crowds filled all five floors of Selfridges. The Dr. Martens area was buzzing in the women’s shoe department. Dense crowds filled the holiday section, where customers could customize wrapping paper, stockings, ornaments and more.

In Milan, La Rinascente is offering up to 50 percent off select designer merchandise. Diesel puffers and hoodies were 30 percent off. Palm Angels accessories are 50 percent off. Customers are also stocking up on holiday cakes, cookies and chocolates, purchasing multiples of the same items.

U.K. footfall data research firm Springboard said Friday that foot traffic rose from year-ago levels, but were still below pre-pandemic 2019 rates—likely a sign of the impact from inflationary pressures on consumers. Springboard, which tracks all U.K. retail destinations, predicted last week that footfall for the entire day would be 12.8 percent higher than Black Friday 2021, but would remain below Black Friday 2019 levels.

Meanwhile, Barclaycard Payments said that sales in the U.K. through 1:00 p.m. on Friday were up 0.7 percent, or what the credit card issuer referred to as a “marginal increase” from year-ago levels.

Elsewhere in Europe, Black Friday sales in France are still relatively new, introduced after 2013 and still not considered a major event. In Italy, the Italy Shopping Outlook report from Bain & Co. Italia indicates that half of consumers plan to spend less than in 2021 due to the high cost of living and concerns over the war between Ukraine and Russia. Most sales are expected to come from in-store shopping instead of online, although the report indicates that consumers, like their American counterparts, will research on the web before heading to the stores.

Over in China, Reuters reported that streets in Beijing were deserted, with stores closed amid another Covid lockdown.