Saturday, November 26, 2016

Black Friday Shopping Shows Decline

If the world is losing interest in manufactured goods, that might show up first in U.S. retail statistics for Black Friday. The unofficial shopping holiday is focused more than any other day of the year on consumer products, most of them manufactured in countries in Asia. The Christmas shopping season got off to a slow start in November with the distractions of the political seasons, so it was hoped that shoppers would make up for that when Black Friday, the peak shopping day of the season, rolled around. Unfortunately, observations of retail traffic showed that Black Friday retail traffic was down slightly from 2015. Now preliminary sales statistics suggest that sales were down more sharply than they appeared. In-store sales on Thanksgiving and Black Friday combined were down 11 percent from the year before. Most or all of that decline was seen on Black Friday morning, with retail traffic said to be down about one third from the year before. Online sales were up 18 percent but are still much smaller than in-store sales, so total sales must be down substantially for the season do far.
The slow sales are especially a concern for retailers that stocked up in a big way anticipating an increase over last year’s results. Among major U.S. retailers, Walmart was the only one to go all-out this season, describing its plans as a 50 percent increase in inventory levels. If sales at Walmart did not increase as planned the retailer will be left with an enormous inventory overhang. This is bad news for Chinese manufacturing, as Walmart, besides being the largest U.S. retailer, is also the one most noted for carrying Chinese-made products. Walmart’s inventory reorders will have to be smaller in the months ahead.

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