When consumer spending on Black Friday is high, investors have their first indication of a profitable shopping season. Stock prices for retailers may reflect this trend.
Why Is It Called Black Friday?
Black Friday got its name in Philadelphia in the 1960s. An annual Army-Navy football game would bring in tons of tourists, who were also on hand to descend on shops the day after Thanksgiving. The police took to calling the long work day of traffic, crowds, and bad weather “Black Friday.” Retailers tried over time to get consumers to use “Big Friday,” but it did not stick. Eventually, and no doubt helped by customers who experienced the crowds and long lines for sales, retailers took the name as their own, saying Black Friday refers to how the holiday season pushes retailers into the “black,” meaning positive profitability, for the year
Thanksgiving Shopping
Retailers rely on strong Black Friday sales to earn a profit for the year, commonly offering major sales.
In 2023, a record 200.4 million people shopped in stores or online from Thanksgiving Day through Cyber Monday, according to the National Retail Federation, spending an average of $321.41 each over the five days for a total in excess of $966 billion. Top Thanksgiving purchases included food, decorations, clothing, and accessories, as well as gifts and black Friday deals-including toys, cards, books, video games, candy, and electronics.
Key Takeaways
- Black Friday is the name given to the day after Thanksgiving when retailers rely on major sales to bring in crowds of buyers.
- Sales during the five days of Thanksgiving through Cyber Monday reflect consumer sentiment for the holiday season.
- Strong sales during this period can benefit retail sector stocks.
- 2024 is expected to see record Thanksgiving and Holiday shopping figures.
Another continuing trend is the shift to online channels for holiday purchases. Indeed, 71% of consumers surveyed by Deloitte report that they will be going online this year. Still, brick-and-mortar retailers are not forgotten.
What Is Cyber Monday?
Cyber Monday takes place on the Monday following the Thanksgiving weekend. Online retailers offer sales, and traditional retailers offer website-only deals.
References
2024 Holiday Spending Expected to Reach New Record, Investopedia
