Black Friday Shoppers Return, Profits Another Matter


Black Friday crowds return to their favorite spots, but many chains are squeezed by rising costs.

The shoppers are back. The shoppers are back.

OK, but what about profits?

The Crowds Returned, Retail Profits Didn't.

“It’s a good start to the holiday shopping season,” Macy’s Inc. Chief Executive Jeff Gennette said in an interview Friday. “It started early online and when the stores opened yesterday evening, we saw strong traffic and people are buying.”

But despite the crowded malls and shopping carts loaded with everything from Christmas pajamas to Samsung televisions, retail profits aren’t keeping pace with the sales gains. Chains from Macy’s to Walmart Inc. are struggling with rising costs as more shopping shifts online.

“We are in a decade of profitless sales,” said Paul Lejuez, a Citi retail analyst. “Even though sales are better, a lot of the structural issues that have weighed on the industry haven’t gone away.”

The crowds may have returned on Black Friday, but check out the rest of the year.

Monthly Retail Foot Traffic

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Note the scale. Those are negative numbers, just less negative than a year ago.

Sears Last Black Friday

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Empty shelves and sad shoppers at Last Black Friday at a Sears Store.

Instead of door busters, shoppers find a mess; ‘I came here for years and years and all of a sudden they’re closing’ said one shopper.

Many remaining products were being discounted by 75% or 80%. “They might as well give it to me for free,” said another.

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Goodbye, Sears

The company sold the best thing it had in an attempt to stay in business: Craftsman tools.

Last week, Retailers Hammered by Profit Concerns: Target fell 10%, and Kohl's 8%.

Expect more retail store closings.

Mike "Mish" Shedlock

Comments (10)
No. 1-5

Shoppers (with money in their pockets) will go to stores/malls that are:

Safe Have a great selection with unique items Treat them with respect Don't nickel and dime them (parking, etc.) Good food

Shopping used to be a social experience. A place for fun, see new stuff and meet new people.

You don't get that online.

Who wants to go to mall that illegals/teenage thugs hang out in, stores treat you like dirt, lousy selection and rude staff?

FYI - I can give you a list of at least a dozen places that do it right. And have massive crowds of real shoppers.


"Overstock... Will Sell Retail Business" Who would want it?


Meanwhile, when I picked up my new Apple Watch on release day there were lines out the door and the place was packed. I'm just as certain that the incredible amount of spam from every web retailer I ever interacted with will lead to disappointing sales on Cyber Monday (hey Microsoft, I clicked "unsubscribe." That means stop spamming me).

I don't understand this obsession with treating "retail" like a giant monolith. Retail is just a way to communicate with your customer. Some do it better than others, and many hidebound firms aren't willing to change with the times. When the books are written about the demise of Sears, every author will think they are a genius for pointing out the obvious. But that's not all that simple either. Microsoft is every bit as out of touch with their customer as Sears, but they can't hear the problem over the sound of the cash register. And Apple seems to be ignoring their long term customers' needs in favor of the whims and impulses of designers (and the marketing team). Amazon is playing fast and loose with their Prime delivery guarantees fairly often now. Yes it will ship in 2 days, but it might not ship out of the warehouse for 2 weeks or more. Very annoying.

Meanwhile I went to the liquidation sale at Sears and didn't see these massive deals, although that was 2 weeks ago. The appliances weren't moving at all. I guess people don't really care about 70% off an already overpriced refrigerator when the old one is still functioning.


E-tailing is about convenience, selection, price, and ability to comparison shop. All four are important. Brick-and-mortar retailing used to get away with murder by comparison. Remember the days when looking for something involved making phone calls and tediously describing the item over the phone to each sales person after waiting on hold each time, driving to multiple stores, and eventually paying more than expected because only one store carried the correct product and none were in stock? One also had to make a second trip, days later, to pick up the item after it arrived. Good riddance.

The places brick-and-mortar stores still get my business are: (1) if I am looking for a specialty item requiring sales expertise or selection in person, or (2) if I know the store regularly stocks what I need at a reasonable price, or (3) if they have a website where I can quickly find locations that have what I need, and their prices are at least in the ballpark. It is also convenient if their website tells me where the product is within the store. Home Depot used to be very good at this, but not so much lately. Napa’s website helps consumers locate stores with inventory, but if one physically goes there without first ordering through their website, they charge a premium over their online advertised price. I guess that’s good policy if your goal is to annoy your customers and deter them from spontaneously visiting your stores. Walmart used to do that, but they seem to have abandoned the policy in the last couple of years.

As for “pleasant shopping experience” driving consumers to brick and mortar stores, I can see how that would be true on the high end where personal service matters more than price. I doubt mainstream retailers can get enough traction from that to help pad their margins.


The teenagers around my neighborhood all woke up early Friday morning to rush to the mall. My daughter bought some clothes with money my wife took from my wallet. I need to find a new hiding place.

Seems like black Friday is as much a tradition as a great way to save.

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