Robert Wagner
Mrs. Straub
AP Econ
17 November, 2015
Black Friday
Thanksgiving is fast approaching. While this is typically a time where we sit down and relax, give a few thanks and feast to our heart’s desire, it is also the beginning of the most stressful and intense shopping day of the year. Black Friday, a day where thousands of consumers all across the globe rush to their nearest stores to divulge into the countless savings. On a day like this, the monumental price drop results in consumer increase in demand. Also, prior to Black Friday the producers stock up on as many goods as they can, increasing the supply. While the effects of Black Friday can leave many consumers overjoyed with savings and can leave others disappointed because the desired products were all sold out, how does the day affect the economy?
In 2015, the projected Black Friday sales are much lower than the sales in the previous years. Producers are opening even earlier and lowering their prices, but opening earlier does not increase the amount of supply available. Firms in monopolistic competition will have incredibly low prices because so many of them are selling the same products. Examples of these, especially when Christmas shopping on Black Friday could be toy stores or clothes stores. People will still go take advantage of the discounts made available to them, especially in the previously mentioned industries, but experts still say that less people will be making the most of Black Friday sales. Doesn’t this indicate a slowing economy?
The opposite in fact couldn’t be more true. In 2013, an estimated 141 million americans spent their post Thanksgiving day shopping, while in 2014 an estimated 133 million americans took advantage of black Friday. That is a 5.2% decrease in shoppers, which in turn created an 11% decrease in money spent. Many people would think that a slowing in Black Friday sales would represent a slowing economy. However, it makes perfect sense that if people are not depending so much on Black Friday to shop for Christmas items that they trust in the economy more and more. There has been a steady decrease in Black Friday spending and amount of shoppers in the past few years, which means that more consumers are learning to trust in the economy and can spend their money at other times, instead of waiting for hours on end for one or two products that are marked down just a little bit. Whether or not the economy is actually improving seems to be a matter of opinion, something I will not include. However, to make your own judgement on the economy under President Obama, find some facts here.
The important idea here is that Black Friday’s decreasing sales may not be ideal for the producers and business owners/employees, but it shows that consumers these days are learning to trust more in the economy as a whole, and consumers trust is a very important piece to an improved economy in the near future.
Works Cited
Peralta, Katharine. "Black Friday Shopping May Show Improving Economy." US News. N.p., 27 Nov. 2014. Web. 17 Nov. 2015.
Tabuchi, Hiroko. "Thanksgiving Sales, for Big-Box Retailers, Are Not a Choice." The New York Times. The New York Times, 29 Oct. 2015. Web. 17 Nov. 2015.
Wikipedia. Wikimedia Foundation, n.d. Web. 17 Nov. 2015.
Zumbrun, Josh. "Have Most Economic Indicators Improved Under Obama?" Real Time Economics RSS. Wall Street Journal, 4 Aug. 2014. Web. 17 Nov. 2015.
Interesting point that Black Friday is not indicative of the general situation of the economy. Many people would expect that it would be, as it is a particularly visible and well known event, but other metrics, such as GDP growth and job creation can tell us much more. It is certainly true that the decrease in price on Black Friday is the cause of the massively increased demand, perhaps consumers do not feel the price drops in recent years are significant enough to change their expectations and therefore change their demand?
ReplyDeleteWorking in retail, I know that Black Friday means so much to companies and their overall sales for the year. It is very interesting to me to hear that the overall spending on Black Friday is actually decreasing. I think to add on to that point, some graphs of the annual revenue generated from Black Friday throughout years past would be beneficial, but other than that the information you provided does back up your point very well. Who knew that such an important day for the economy was not very representative of the economy itself!!
ReplyDeleteI am a black friday shopper I go every year, and I tend to go to multiple places, from Mayfair and Brookfield, to Johnson Creek and Gurnee Mills. Although I'm not an electronics person like most people, I go for more of the clothing stores. Although there is a slight decrease, that doesn't mean that millions of people are not going to do it, because they will. Black Friday will still help the economy out greatly no matter what, Black Friday will not die out that much in the upcoming years as so many people want the deals.
ReplyDeleteWith my mom working at a large retail company I am aware of the importance of Black Friday. You mentioned that over the years the demand for products has decreased. I think they should only slightly decrease the price on inelastic goods because people will buy regardless and more rapidly decrease the price of elastic goods. With those changes I feel that the total revenue will increase. Also, I've noticed that companies are moving there Black Friday sales into the end of the day on Thanksgiving. The sales may also be decreasing because less people are willing to go out and shop on a day your supposed to spend with family. Overall I really enjoyed your topic and I look forward to researching the total revenue made after Black Friday compared to last year.
ReplyDeleteAlthough some shoppers still take the treacherous journey, I assume that more and more people are using the internet because of the growth of technology. Personally, I have been checking websites to see if they offer online deals and most stores do. As time goes on I predict that the demand for online shopping will increase because it takes less time and is more efficient for the consumer. Even online, companies will still maintain profit on the most popular shopping day of the year.
ReplyDeleteBlack Friday is both a gift and a curse to the communities which stores attract. While yes, prices of goods both elastic and inelastic are slashed down to a fraction of what they would be 99% of the year which excellent for Christmas and birthday shoppers, the level in intensity to which some people go to in order to buy these goods can be catastrophic. Each year citizens across the country will stand in line outside of some Wal-Mart for several hours only to create mobs of people rioting to take advantage of the sales. This is great for the stores and not a problem for most, but people have died being trampled by hordes of people. It is near insanity. However, if there has been this decrease in shoppers on Black Friday as you say, then there very well be a much less stressful shopping season in the coming years.
ReplyDeleteThis is a very interesting topic. The sudden decrease in price definitely accounts for the mobs that formulate over Black Friday. I find it interesting that more and more people are shying away from taking advantage of Black Friday for I am like most people who believe that Black Friday will be taken advantage by almost every American. But I guess I'm wrong. It would be cool to see how many more people are beginning to purchase online rather than making the trek to the store. Yet, stores will still reap the benefits of Black Friday.
ReplyDeleteThis topic is very interesting to me. Every year, I always go Black Friday shopping because of the decrease in supply. Many people like me save me and wait for the prices to drop. Since so many people are waiting for the prices to drop, the demand is very high for the products. Although, this was written very well and provides information I did not know about, I wish you would have talked about specific stores, such as Target or malls. Many people wait in line for these stores, hoping to get the best deals. The people go so early because they know that the supply will run out sometime. Lastly, I didn't know that this years's sales are going to be lower than past and that is very surprising to me considering the stores have been opening earlier and earlier. Overall, this was a very interesting and well written project.
ReplyDeleteI have never participated in Black Friday shopping myself, however I know a lot of people that have. I find it ironic that the day after a holiday in which we are supposed to give thanks for all the things we have people go out and fight over products. Overall the idea is great for companies. I was fairly surprised by the fact that the amount of shoppers is actually decreasing. I feel as though some of this might be due to the new idea of cyber Monday which makes going out in the middle of the night to stand in line for hours rather arbitrary. I don't see Black Friday ever dying out, but I could see the amount of consumers going out to get in on the sales continue to decrease.
ReplyDelete