It isn't only turkey that people look forward to when Thanksgiving arrives. Thanksgiving is also the time of year when most Americans look toward the holiday season, and many take to the frenzied stores on "Black Friday" to take advantage of the deep discounts that many retailers offer. According to the National Retail Federation (NRF), the average American spent $365.34 on Black Friday in 2010 with overall sales adding up to $45 billion. The NRF states that was an increase of $22.03 from the 2009 average of $343.31. According to the NRF, there was also an increase in the number of Black Friday shoppers in 2010 with approximately 212 million people heading out to the malls, which was up from the 2009 figure of 195 million.
TUTORIAL: 20 Investments You Should Know

Regional Factors
Residents of the southern states typically spend more than those in the north. This is perhaps a little surprising since many Canadians cross the border to take advantage of Black Friday sales which aren't commonly offered north of the border. The state of Texas, and even more precisely the city of Austin, Texas, is home to the biggest spenders in the country. Other cities known to be home to the big spenders are Scottsdale, Ariz. and San Jose, Calif. States with a higher cost of living also tend to see larger expenditures. Some of the top states include Connecticut, Hawaii and California.

Online Sales
Online retailers are getting in on the Black Friday action as well. In 2010, comScore Inc. reported that online retailers enjoyed sales of $648 million, which was a 9% increase from the preceding year. With total spending of $45 billion, online retailers may not account for a huge percentage of the overall spending on Black Friday, though they are certainly gaining popularity. The massively popular online retailer Amazon.com enjoyed huge successes during 2010's Black Friday with a 25% increase in unique visitors coming to the site to take advantage of their sale offerings. That's a pretty hefty increase in traffic for one day. (For related reading, see What Is Black Friday?)

Individuals who do a large portion of their holiday shopping online are also likely to spend more than those who opt for more traditional retail venues. The National Retail Federation also suggests that those that buy online are 3% more likely to buy things for themselves while holiday shopping than more traditional shoppers.

Who's Spending?
Statistics show that men are more likely to shop on Black Friday than women, with men spending an average of 3% more. Statistically, age also factors into holiday spending with those in the 50 to 65 year bracket spending nearly 75% more than those aged 18 to 25. These figures make sense when considering that older individuals who are generally more established in their careers tend to have more disposable income than those who are just starting out.

What's Being Bought
Black Friday tends to be when shoppers are looking to buy big ticket items. According the NRF, jewelry and electronic items are both popular choices, and both these items saw an increase in sales in 2010. In 2009, 11.7% of shoppers purchased jewelry items on Black Friday, which increased to 14.3% in 2010. Toys, books and gift cards have also been popular choices.

Other Factors
Though it's difficult to say for sure, some analysts suggest that colder weather may even lead to higher sales on Black Friday. Many retailers are also offering "Cyber Monday" sales on the Monday following Black Friday. These sales are meant to attract those who are unable to get out on Thanksgiving weekend to do their holiday shopping. Perhaps some consumers are saving their cash for Monday when the malls and online retailers are a little less swamped with traffic. Store hours are also thought to be a factor in Black Friday spending. In 2010 many stores opened earlier than in previous years, and many consumers were out waiting for the stores to open at an earlier hour. (For related reading, see Goodbye, Black Friday; Hello, Green Monday.)

The Bottom Line
Why is everyone so obsessed with Black Friday sales figures? With people spending rather hefty sums of money on this notoriously busy shopping day, the amount spent on Black Friday is often thought of as a litmus test for the overall economic condition of the country and a way for economists to measure the confidence of the average American when it comes to discretionary spending. Those who are afraid of losing their job aren't likely to be out in the malls buying diamond rings or new video game systems to hide under the Christmas tree. However, to use the Black Friday expenditures as the sole measure of overall economic conditions isn't too wise, though these figures do help retailers to anticipate what kind of sales they can expect through the remainder of the holiday season. With 2011's Thanksgiving season just around the corner, it will be interesting to see what kind of story this year's figures will tell us about consumer confidence and spending.

Related Articles
  1. Economics

    The Problem With Today’s Headline Economic Data

    Headwinds have kept the U.S. growth more moderate than in the past–including leverage levels and an aging population—and the latest GDP revisions prove it.
  2. Investing Basics

    10 Companies That Yuppies Love

    Learn about 10 companies loved by the modern Yuppie, including how this demographic's impressive buying power has boosted these companies' earnings.
  3. Professionals

    3 States Where Taxes Can Hammer Retirees

    Knowing which states ding retirees with the highest tax implications should be part of your retirement research.
  4. Investing News

    How 'Honesty' Could Pay off for Jessica Alba

    Is it possible that Jessica Alba is one of the savviest businesswomen on the planet?
  5. Investing

    Top Websites to Start an Online Business

    The Internet offers nearly endless ideas and opportunities for new businesses. Here are some great resources to get your online business up and running quickly.
  6. Personal Finance

    Invest in Costco? First Understand Its Balance Sheet

    A strong balance sheet sets a company apart and boosts investor confidence. How healthy is Costco based on an analysis of its balance sheets from the last two years?
  7. Investing Basics

    The 5 Reasons Why RadioShack Went Out of Business

    Learn five reasons why RadioShack went bankrupt: store concentration, online competition, product concentration, management issues and financial missteps.
  8. Economics

    Understanding Forward Integration

    Forward integration happens when a business takes over functions that were originally performed by its partners farther down the supply chain.
  9. Stock Analysis

    What Puts the Dollars in Priceline's Bottom Line?

    The Priceline Group is more successful than it may appear and is on track to enjoy tremendous profits down the road.
  10. Active Trading Fundamentals

    How Groupon Makes Money

    Find out how Groupon makes money, including a rundown of how Groupon works and what benefits it provides to the businesses it partners with.
RELATED TERMS
  1. Substitute

    A product or service that a consumer sees as comparable. If prices ...
  2. Fast Fashion

    Definition of "fast fashion."
  3. Duty Free

    Goods that international travelers can purchase without paying ...
  4. Transaction Authentication Number ...

    A one-time code used in the processing of online transactions.
  5. Mail Or Telephone Order Merchandise ...

    A regulation that controls businesses that sell products over ...
  6. Online-To-Offline Commerce

    A business strategy that draws potential customers from online ...
RELATED FAQS
  1. How can I invest in electronic retailing (e-tailing)?

    Electronic retail is one of the fastest growing segments of the economy. Every year, more people are choosing to purchase ... Read Full Answer >>
  2. What is the difference between JIT (just in time) and CMI (customer managed inventory)?

    Just-in-time (JIT) inventory management focuses solely on the need to replenish inventory only when it is required, reducing ... Read Full Answer >>
  3. What are some common ways product differentiation is achieved?

    There are many ways to achieve product differentiation, some more common than others. Horizontal Differentiation Horizontal ... Read Full Answer >>
  4. What economic indicators are important to consider when investing in the retail sector?

    The unemployment rate and Consumer Confidence Index (CCI) rank as two of the most important economic indicators to consider ... Read Full Answer >>
  5. What factors make it difficult to compare performance ratios between retail stocks?

    Companies that operate in the retail sector significantly differ in terms of their profitability and efficiency, making stock ... Read Full Answer >>
  6. Which socially responsible retailers appeal most to ethical investors?

    Ethical investors have many reasons to consider companies in the retail sector. The sector is broad and features an abundance ... Read Full Answer >>

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!