Bridget Riegert
The Thursday night after Thanksgiving is one of the most popular nights of the year. Millions of people get some rest before waking up at midnight to go shopping all night. It is the time of the year where every business has the best deals and the greatest sales on their racks and on their shelves. Over the years as shopping becomes an annual tradition for many families and friends, many are wondering how all this spending and buying is affecting our economy as a whole? Surely selling products for so cheap will hurt our economy more than help it? After much research, it has been determined that there are overall black friday shopping has a positive effect on the economy.
According to useconomy.about.com this year a record of 92 million shoppers shopped on Black Friday. Every year the number has increased by around 4 million people. This means that more products are bought by consumers and more money is circulated through the economy. More sales taxes are paid, more items are sold, and more people can be employed. The website also states, “On average, each shopper burned through $407.23, down from last year's record $423, but more than the $398 in 2011”. Statistics also show that retail stores make around 40% of their annual revenue. This helps the economy substantially.
The graph above shows how much money holiday sales make and how much is made during black friday shopping. In 2012 around $589 billion dollars was made during the holiday season. However $60 billion was made just during the black friday shopping. You can see that the trend through time has always changed. Back in 2006 money was spent more during the holidays then on black friday. Around 2008-2009 black friday was making about $20 billion more than regular holiday shopping. Now in 2012, the holiday sales and thanksgiving weekend is almost equal. 2012 was also the year that America as a whole spent the most money.
Since it has been determined that overall black friday shopping has a positive effect on the economy, many Americans question why we haven’t made this tradition happen more often. Many mention that they wouldn’t mind having this shopping deals before New Years Eve, or in June right when schools are getting out. Part of the reason that many businesses will only promote deals this big for one weekend is because they still have products that they want to sell at a decent price for a decent amount of profit. The opportunity cost would be some of the profit that they make since they aren’t selling all the items for the full price they would like to.
Many stores will have package deals and sell Keurig coffee makers with a free Keurig coffee flavors. The businesses are hoping for this weekend that they will still make a marginal benefit with the marginal cost of the free Keurig coffee flavors. This is a marketing strategy that many will use, and still make a decent amount of money which helps the economy. This is how Black Friday shopping helps the economy more than hurts it. So keep up the midnight shopping!
Sources:
"What Is Black Friday?." About.com US Economy. N.p., n.d. Web. 10 Feb. 2014. <http://useconomy.about.com/od/demand/f/Bl
Black Friday is an interesting aspect of the holiday season – many people believe it takes away from the holiday spirit, but when people go out to shop at midnight, they are unintentionally helping the economy through their self interest. Adam Smith would agree that Black Friday shopping is a good thing for the American economy because it helps people get cheaper prices for Christmas presents, and it also helps companies make revenue due to the enormous amount of people out shopping. Although some people believe that we should have days like Black Friday more often, I think that one day of Black Friday shopping is enough because if it happened multiple times a year, the supply of cheap presents would go up, so the demand would go down, thus decreasing the amounts of goods sold. In order to keep the idea of Black Friday exciting and novel, there should only be one day a year where this amount of shopping deals and low prices occur.
ReplyDeleteI really liked your article about the black friday shopping. I have always wondered what it did to the economy because of the fact that some of the sales are so low but it made sense now. I thought it was a really good idea that you put the graph in because it gave the readers a good visual to understand what you meant when you were talking about holiday shopping versus black friday shopping. The graph gave good visuals on how our economy is doing well with the dip and increase in the chart. I really liked how you talked about the marginal benefits and cost to show that we really arn't giving anything up for the money that theyre making! Overall good job!
ReplyDeleteThis was really interesting Bridget! I really have wondered if Black Friday Sales had a negative affect on the economy but now I know it actually helps us in the long run. Really great topic to talk about and address. I also liked how you asked the question about why wouldn't we have more deals like Black Friday throughout the year. This added a lot of depth to your statements and facts you were presenting through your writing and your graph that you displayed. Awesome job!
ReplyDeleteI also learned that the expenses to advertise the Black Friday's deals are more expensive during this time of year because everyone wants to get their word out. Even though this is true, company's still obtain a lot of profit with the difference because of how successful this day has become over the past 20 years.
DeleteYour blog post and article was really well done, Bridget. You were very clear on what point you were trying to make and how this topic of high interest spending could affect out economy and your research was credible and used well.
ReplyDeleteI agree with your initial concerns about how this type of "high spending" could create issues in the long run of the overall economy. It is interesting how it has had a positive affect on the economy overall! You wouldn't think that it would be that beneficial, but it is. I wonder if that will continue as every year on Black Friday the spending rates grow and that amount of money taken out and used is increasing. However the affect is positive now, I wonder if it will remain positive with the increasing drive for these types of events. Also I wonder if the opportunity cost of some of the profit that they make being lost since they aren't selling all the items for the full price they would like to, will continue to not have a large impact or if it will create a problem. Personally, I think it would be difficult to be an investor in a business or to be in the position of having to make the kinds of decisions of what to sell and for how much of the product to sell, as you can never fully determine the marginal cost and benefit and what investments will be made - especially during a time, such as Black Friday, where the amount of investments going to be made by the consumers is completely unknown.
This is a very good topic because many of us participate in Black Friday shopping. I also believe that it has a positive effect on the economy because there are so many sales that happen on this one night and companies make a huge profit. I wonder what will happen in the future with Black Friday and how crazy this night could be. I'm interested to see if in the future this crazy shopping night will no longer help companies but instead cause them problems. It seems to be doing the economy good now but maybe that won't be the same in years to come.
ReplyDeleteI thought that the stores would be making more commission during Black Friday than any other day. I was also surprised that the total average dollar amount spent was lower than last year’s since the stores are opening earlier and trying to outdo themselves from last year. I do believe that if stores also had sales during like when school got out or right before New Year’s, they would have an even greater profit margin, and they wouldn't be relying on the Black Friday shopping to get most of their yearly profits. For somebody who rarely participates in the Black Friday shopping frenzy though, I didn't know on average how big it really was compared to the year round profits. This just really shows how many people think they’re getting a good deal, but yet still having the stores make a profit on un-wanted merchandise. It benefits the stores more than the people in my opinion.
ReplyDeleteBridget when reading your post it gave me a larger insight into what really goes on during black Friday shopping. I knew that black Friday shopping was a big deal and that during that one day the sales are great and the businesses receive a large amount of money. Yet what I didn’t know was home much money they really make on this one day in particular. I thought that during the holidays it would be just as much but it shocked me so much to see that they don’t nearly make even close to what they usually do. But I do agree that since it does have a positive effect on the economy why not have days like this one in particular more. It would give the consumers the chance to get what they want and help give the businesses out as well with selling merchandise.
ReplyDeleteSince the stores are gradually starting to open up earlier I was surprised to hear that Black Friday wasn't as big of a hit this year. I do think that they should have more "Black Friday" opportunities. It normally does well for the economy. Businesses put things on lower prices so people will buy more of that product. Eventually it all evens out and the stores really aren't losing much. Having an end of the year sale, I think, would do very good for the economy. People need to get more summer clothes and get rid of their winter apparel. Although, it might eventually create a problem for the big spenders in the long run, but it's great for businesses. This is an interesting article that I think was an awesome choice. Lots of people are very curious about Black Friday and how it actually helps businesses. Hopefully someone will decide to make more events like this, I'm sure the spending will only increase.
ReplyDeleteShopping until sunrise is a tradition in my family, we do it every year. I never really thought that my shopping or my purchases actually made a differences in the economy, i just figured since the price for everything was so low the sales probably didn't really help the stores and might have even been bad for the economy. Now i realize how the shopping actually helps the economy in the long run. I really enjoyed your post because its something i can relate to and actually have experienced first hand.
ReplyDeleteThis was very well done Bridget! The topic of Black Friday is very relatable for all of us, and I found this article to be a very interesting read! When I read that “retail stores make around 40% of their annual revenue” on Black Friday alone, I was shocked. That is nearly half of the income for the whole year. I was always unsure if it was beneficial for businesses and the economy to significantly lower prices, which clearly it is. I liked how you backed up all of your thoughts with clear evidence such as the $60 billion dollars made during Black Friday shopping alone. It really strengthens the article. The graph shows that each year, more and more people participate in Black Friday shopping, so I can't imagine what it will be like ten years from now! Great job!
ReplyDeleteYour blog post was really interesting Bridget! I was never really sure how black Friday shopping effected our economy. It's good to know that this crazy event is good on our economy considering all of the problems that It has caused. I also liked how you tied your own personal opinions and ideas into your writing. It really got me questioning the same things as you.
ReplyDeleteThis was a very unique post. As an avid Black Friday shopper I have always wondered if this holidays low prices were beneficial to the companies. It was great to see how this day improves United States economy. While Black Friday retail stores made around 40% of their annual revenue, I am eager to see if companies will continue to make a profit in the future.
ReplyDeleteThis was a excellent post. The overall problem with Black Friday is the amount of time in takes away from family time. Last year Walmart opened their doors at 6:00, and our family went early to the doors to pick up the deals of the day. It's a tradition that may have taken out of thanksgiving day dinner, but then again due to out ethnicity, we never had a truly dinner celebration.This will cause issues with your family, but has massive benefits to the economy. So we will have to see that if time continue the benefits will continue to outweigh the cost of Black Friday and continue to be the most popular day to shop until you drop.
ReplyDeleteWhile reading your post about Black Friday shopping I learned a lot about how it affected the economy as a whole. It's amazing how much Black Friday shopping helps out stores, and the economy. Black Friday has always been a crazy day, with tons of exciting events, but it's amazing how such crazy day can help the economy. It's amazing how helpful Black Friday is while it is helping people get their holiday shopping done!
ReplyDeleteBlack Friday has many benefits like what you said and the positive benefits do outweigh the negative ones. The abundance of people brings in more profit during the weekend after Thanksgiving which is always a plus for improving the economy. If there was a way to control the crazy shoppers on Black Friday, I guarantee you that more people would participate.
ReplyDeleteWell since Black Friday has such a positive affect on our economy then I say it not only should be continued, but also maybe happen more than once a year, and this is because our economy needs the help. Things may be cheaper that day, but the stores make about 40% more than their annual revenue, meaning there is more money going in rather than the product that’s going out, which in turn is an improvement to our economy. On the graph there showed a trend of the money made going down around the years of 2009-11 but in these past years the money made has started to improve greatly showing how well of our economy is starting to do, and with this it will make it easier for our debts as a nation to be paid and a bump up in the sense for our economy to rise back to the top, instead of this continuous descending.
ReplyDeleteI never really thought about it this way! I only ever thought about Black Friday as something to avoid in my life. I only ever went Black Friday shopping one year and I never thought I was helping make a positive effect on the economy. I really thought it'd be a very negative effect on these shops and even the economy. I never know that many people went black friday shopping or even that they gained that much money just from one night/day. This stuff is insane. It seems like so much more money is spent but it's just about the same amount but just more things are being bought, most people wouldn't think about it this way. Great article!
ReplyDeleteI believe as though that Black Friday is an awesome way to boost up the economy substantially as shown. On that note it would help the employment rate go up by having more people work on that day, not only should we have it once a year but maybe even 2 or 3 times a year during main holidays not just for Christmas. The reasoning behind will help us and maybe other countries build more upon their economy. It is very successful in the long run. Yes the graph does show from 07 to 09 that holiday sale decrease but then again will eventually balance its self out. As stated before I believe it will help out majorly.
ReplyDeleteThe facts in here are stunning. From this data, I obviously agree too that Black Friday is very good and necessary for our economy. Sixty billion dollars in sales in one day is quite a feat. Not only does this holiday bring in mass amounts of money for businesses and our economy it also puts many more people to work. Overall it is a very beneficial holiday tradition that should be continued, but should there be multiple Black Friday sale events throughout a year? I believe there shouldn't be. The opportunity cost of losing profit margins on Black Friday is too much to do twice in one year. One day with maximum price cuts and sales is better than two days throughout the year where there is only half of the sales and people. The Black Friday after Thanksgiving would lose much popularity if there was two different dates. Black Friday only being kept once a year is great for the businesses and the consumers therefore it shouldn't be changed.
ReplyDeleteEven though Black Friday can extremely dangerous and out of control, it is extremely important! It's shocking how important to boost the economy in a cool way! Black Friday also increases the employment rate which over all makes the economy better as well. It's crazy how some stores get around half their income in the year on Black Friday. The way you back up all you evidence makes this piece even stronger. The way the graphs shows the future makes me curious how Black Friday will be years from now!
ReplyDeleteAs a Black Friday shopper myself seeing all these statistics about it really shocked me! I was always curious as to how much money companies and stories made because of their ridiculously low prices, it seems that every year when I walk away from black Friday shopping I was saving hundreds! Looking back though too, I was also that average person who spent around 400 dollars when I went out also so I can see how they are making money but doing these blow out deals. 92 million people shopping on one night has a positive impact on stores, even though they are having deals the amount of people buying from them makes up that discount. Everyone knows that the amount to make a product always cost a lot more than how much they sell it for, so looking at the overall picture all these companies and stores are really doing is benefiting and it's smart on their part. They are getting great business and making a positive reimbursement with the money being taken in.
ReplyDeleteThis was very interesting to think about- Black Friday is really just a mind game played with the public to make them think they can afford all of these things because they're "cheap" but really they end up spending ridiculous amounts anyway because their way of thinking is changed. Another example of this is when a person checks out at a store and has one shirt, but the cashier says "are you sure you only want one? If you buy another its half off!" So the person buys the other shirt thinking they are saving money but all the store cares about is they spent more money than they originally planned. These mind games are so interesting to think about this was a very interesting and eye-opening read!
ReplyDeleteIt's interesting to consider, you have to wonder how much of a marginal benefit Black Friday needs to be for the event to be worth it. If the Black Friday sales account for 40% of their annual revenue, do stores suffer the rest of the year? It would seem that such an unbalanced revenue might hurt, considering there is more than 40% of annual revenue in holiday sales. It’s still good that Black Friday generates so much revenue; that and the jobs that holiday season provide people that desperately need one. Hopefully the tradition will stay alive for the sake of our economy.
ReplyDeleteI really liked your article, I've always wondered what that one day of insane shopping does to the economy and how the rest of the year compares to it. I feel like all that shopping on Black Friday would throw the sales for the rest of the year and mess things up for a company. The stores have always made me feel like I'm saving a ton of money but in reality I still spend the same amount of money as normal just at a few more stores. Would Black Friday still be as popular if it wasn't the day after thanksgiving? What would happen if the date changed? Overall this article was really shocking to me and the rest of the Black Friday Shoppers that read this.
ReplyDeleteI have never been black friday shopping at midnight before only during the day. I was never sure about how black friday shopping affected the economy and I also didn't know that in 2012 America spent the most money they have ever spent! Can't wait to go black friday shopping this year and think about everything in terms of economics.
ReplyDeleteI think it is amazing that one day of shopping can generate so much of the overall sales of a store. I knew about black Friday and sometimes my family goes but I avoid it because of all the people. If it is such a good idea and generates so much money it would make sense to do it other times of the year. Funny how grocery stores and retail stores celebrate holidays differently too. Thanksgiving is for grocery stores while Christmas is more for retail.
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