[quote=Rich Toscano]As far as Black Friday goes, Barry Ritholtz offered the idea that people crowding the stores to get the discounts while they are available is a sign of consumer weakness, not strength. I’m not convinced of that but it’s an interesting idea. I guess we will have to see what the rest of the season looks like retail spending wise…[/quote]
This is what happened in 2007, which was the slowest season I’ve ever seen in my life (based on the physical presence of shoppers wherever we looked, and personal discussions with various retailers — we made a point of traveling around different counties in So Cal to see how the shopping malls, outlets, and restaurants were doing). The inventory piled up in the second half of 2007, so retailers discounted by a very large margin. That brought lots of shoppers out, but the stores were losing money in many cases because many people only bought the loss leaders and went home.
While this year is certainly busier than 2007 from what we’ve seen, I get the sense that the discounts are steeper and people are focusing on these cheaper items.
Like many of us were saying before the bubble burst, it will take some time for people to realize this isn’t your “standard” recession. Things have not picked up for a lot of people since the credit bubble burst. IMHO, they are just now beginning to realize that they will have to cut back significantly if they want to financially survive the coming years.
