Black Friday

Alec Wandler

Mrs. Straub

Economics B3

17 November 2014

Black Friday

With Thanksgiving coming up and Black Friday being just around the corner, stores like Walmart, Best Buy, and other big corporations are going to be swimming in cash due to the increased demand in products. For those of you who don’t understand, Black Friday is the day after Thanksgiving, where prices on goods and services are given special offers to help with seasonal purchases. When these prices go down, the demand for certain goods goes up. Not only will the demand of these goods go up, but the supply will raise as well due to the increased demand of goods, and the equilibrium will drastically decrease from the special offers. But how could a company possibly drop their prices from up to 90% off? The reason being is because of markup, and that the products don’t actually cost quite as much as they seem they might. Even though these stores might knock down the price 90%, they’re still making a profit. In the past, Black Friday has always been known to start the day after Thanksgiving, but according to Ashley Rodriguez from the AdvertisingAge article, she claims that, “In the past few years, stores began opening on Thanksgiving Day (some have taken to calling it Gray Thursday). This year,Walmart is stretching "Black Friday" over five days during November and December, and Target has already begun previewing its holiday promotions. Macy's, Kohl's, Best Buy and J.C. Penney are also opening earlier on Thanksgiving Day than in previous years” (Rodriguez). Stores are beginning to open nearly a week before Black Friday to give them more of an advantage in producing more sales. These companies are bound to see a big increase in their annual income, and will bring in a lot more revenue. According to Bill Martin, founder of ShopperTrak, sales are expected to rise 3.8%. Last year, many companies showed many different results on how well they actually did in sales.

This graph is used to display the 2013 companies that did the best on Black Friday (in millions).

Not only will shoppers be benefiting from these seasonal sales that Black Friday has to offer, but seasonal jobs will be in demand, and employees will benefit from temporary wage increases. Employees at select Walmarts that make minimum wage ($7.25) could make $15 an hour. Thats a little over twice what they make on a day to day basis. The demand for working will certainly go up because of the overtime/holiday pay rate. Black Friday plays a huge role every year on our countries economy. Nearly everyone is affected by this day. Businesses will invest in advertising in catalogs, newspapers, and via websites. The companies that own these advertising businesses will start to see an increase in their profits. The health of the economy will start to go up because of the demand for goods and services, and the amount of sales made. Customers will benefit by getting better deals on necessities and on the luxuries they may want. Overall, everyone will be happier. All in all, Black Friday has a major positive impact on the economy, and I’m sure the majority of you reading this will be participating and taking advantage of these special offers.

Bibliography

"Early Holiday Promotions Eat Away Black Friday Sales | CMO Strategy - Advertising Age." Advertising Age CMO Strategy RSS. Web. 17 Nov. 2014. <http://adage.com/article/cmo-strategy/early-holiday-promotions-eat-black-friday-sales/295884/>.

"Walmart Workers Promise Biggest Black Friday Strike Ever." ThinkProgress Walmart Workers Promise Biggest Black Friday Strike Ever Comments. Web. 17 Nov. 2014. <http://thinkprogress.org/economy/2014/11/14/3592556/walmart-black-friday-2014/>.

"Black Friday by the Numbers!" Make Me Social Blog. Web. 17 Nov. 2014. <http://makemesocialblog.wordpress.com/2011/11/28/black-friday-by-the-numbers/>.