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 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

    Explaining Like-for-Like Sales

    Companies use like-for-like sales figures to compare sales volume from one period to another.
  2. Stock Analysis

    Markets Are Tanking: Time to Buy Like Buffett

    Learn about three value stocks Warren Buffett holds in his portfolio. See how Buffett uses market declines to find good deals on stocks.
  3. Stock Analysis

    The 6 Best Dividend Stocks in the Consumer Staples Sector

    Learn about the top six companies that make an attractive investment for investors looking for stocks for dividend income investing.
  4. Mutual Funds & ETFs

    Top 3 Consumer Cyclical Mutual Funds

    Obtain information on, and analysis of, some of the best performing mutual funds that offer exposure to the consumer cyclicals sector.
  5. Mutual Funds & ETFs

    Top 3 Muni California Mutual Funds

    Discover analyses of the top three California municipal bond mutual funds, and learn about their characteristics, historical performance and suitability.
  6. Stock Analysis

    The Biggest Risks of Investing in Amazon Stock

    Find out which risks are most important to Amazon's shareholders. Learn which operational risks impact share prices and which financial risks affect investors.
  7. Stock Analysis

    How Does Work and Make Money?

    Learn how is taking on retail giants Amazon, Walmart and Costco by promising to save customers an average of 10 to 15% on over 10 million items.
  8. Stock Analysis

    Top 3 Stocks for the Coming Holiday Season

    If you want to buck the bear market trend by going long on consumer stocks, these three might be your best bets.
  9. Investing News

    This is the Fastest-Growing Consumer Complaint

    There’s no way to guarantee that your Social Security number won’t fall into the wrong hands. Here are some ways to make yourself less of a target.
  10. Entrepreneurship

    5 Ways to Make Money on Twitter

    Find out how people are making money online on Twitter, and get some ideas that can turn Twitter into a source of revenue for you or for your small business.
  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

Hot Definitions
  1. Ex Works (EXW)

    An international trade term requiring the seller to make goods ready for pickup at his or her own place of business. All ...
  2. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. LOIs are usually not legally binding in their entirety. ...
  3. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  4. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  5. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  6. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
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!