Category Archives: Consumerism

Black Friday Leaves Retailers Optimistic About Holiday Shopping Season

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Shoppers Crowd Store on Black Friday

Every year the holiday shopping season opens up on what is known as “Black Friday,” the day after Thanksgiving. A bit like the groundhog on February second that foretells how many weeks are left of winter, the success of Black Friday is said to predict the mood of shoppers and what retailers can expect in sales during that crucial winter rush to buy gifts for Christmas and other seasonal holdidays.

This year analysts and businesses were pleased with Black Friday’s turnout, especially with the sharp rise in online shopping. The stores that did the best, such as Wal-Mart and Macy's, were those that have a strong online presence coordinated in tandem with their physical stores and mobile channels, creating for shoppers a  more holistic experience.

"The more you can make a shopper shop multiple channels, they are at least twice as likely to be a loyal shopper and spend tons of money," Patty Edwards, chief investment officer at investment firm Trutina Financial, said.

Observers noticed that although there may be more shopping, individual shoppers were also practicing some restraint in the face of the flood of deals offered during the Black Friday weekend.
According to shoppers’ responses to a Reuters/Ipsos poll, 52 percent of BF shoppers said they stayed within their budgets and 34 percent they actually spent less than what they had planned to spend. Over-budget shoppers totaled only 14 percent of those answering the survey.

Of the 404 respondents to the poll that shopped on BF, 33 percent said that this year’s deals were better than last year’s; 39 percent said the deals they found were the same, and only 15 percent said that this year’s deals were worse.

Analysts are cautioning that just because sales this year appear to be off to a good start it might be premature to judge the rest of the shopping season by figures from just one weekend. The good start will have to be maintained throughout the rest of the shopping season in order for it to have the impact on the entire year: holiday season shopping can account for as much as one-third of annual sales and 40 to 50 percent of annual profits.

Holiday shopping also has a huge impact on the economy as a whole, since consumer spending accounts for approximately 70 percent of all economic activity. There has been a slow but steady improvement in employment statistics, but fears of the approaching “fiscal cliff” that is threatening the entire economy is keeping analysts alert to retail sales and buying patterns of consumers.
 

US Credit Card Debt Grows During Third Quarter

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US Credit Card Debt Going Up

According to the credit card reporting agency TransUnion the average amount owed on credit cards per borrower is $4,996, a 4.9 percent increase since last year’s third quarter debt. Borrowers are also less careful about paying their credit card bills on time. The number of credit card payments at least 90 days overdue went up to 0.75 percent, compared to 0.71 percent during the same period last year.

The late payment rate rise is not that alarming however, since it is going up from historically low late payment rates. During the mid-1990s the record low late payment rate was 0.56 percent, reached in the third quarter of 1994. During the second quarter of 2011 the late payment rate was 0.60 percent.

Many Americans during the recession were able to slow down on their spending while working off their credit card debt, paying off their balances as much as possible. The depressed real estate market inspired many homeowners to make paying their credit cards on time a priority, even at the expense of other financial obligations, including mortgage payments.

Ezra Becker, vice president of TransUnion’s financial services business division, says there is not sign that this trend has changed, even with the slight increase in the late payment rate.

“We definitely see consumers being more conservative in their spending and making every effort to pay down the balances and maintain the health of those card relationships,” Becker said.

Consumer Spending Up in Third Quarter

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The end of the third quarter produced some good economic news, sending hopes that the economic recovery is picking up momentum. According to the economic data which was released on Monday retail sales in the United States went up in September as Americans made more purchases of just about everything, from cars to electronics.

In less good news manufacturing slowed in again October in New York State, although the size of the shrinkage was not as large as September’s manufacturing slowdown.

Retail sales advanced at a pace faster than what was originally expected; 1.1 percent in September, according to Commerce Department data.

This increase in consumer spending is great news for the economy because purchasing accounts for as much as two-thirds of economic growth.

“This is a good end of (the) third quarter and we have some good momentum to the fourth quarter,” said Craig Dismuke, an economic strategist at Vining Sparks in Memphis, Tennessee.

Business Still Booming On Massachusetts’ Cape

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Cape Cod

As summer ends and Labor Day a distant memory, the usual trend for tourists at such summer destinations as Cape Cod, Martha’s Vineyard and Nantucket is to stay home, or head south. But as the next big three-day weekend approaches, Columbus Day, hotels like the Sea Crest Beach Hotel in North Falmouth, the harbor View Hotel and the Kelley House in Edgartown, are reporting the best business they have seen in years. Robin Kirk, the president of Scout Hotels which operates the above mentioned properties, says that advanced reservations are up by between 15 and 20 percent over last year’s autumn bookings.

Paul Zuest, general manager of Chatham Bars Inn agrees. Not only are bookings up for Columbus Day weekend. Zuest says that reservations for the end of October and even November are improved over last year. Mark Snider of Winnetu Oceanside Resort on Martha’s Vineyard concurs, explaining that almost all of his 60 suites are booked for each weekend until October 21st.

Business leaders from the Cape and Islands attribute the good business to several factors, including the ease of finding off-season travel deals on the internet; the promotion by the local chambers of commerce of local cultural points such as art galleries, theater and festivals; and the moderate weather keeping people happy with a few more beach days before the cold and wintery weather really sets in.

Bill Zammer runs two hotels including the Coonamessett Inn and four restaurants and is the owner of the Cape Cod Restaurants Group. In his opinion the lengthening of this year’s tourist season is a sign of an improving economy.

“There are still people who are employed and who do want to take a break,” Zammer said. “It used to be the last one across the bridge shut off the lights on Labor Day.”

Super Watched Super Bowl

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Super Bowl Action Viewed by Millions

For the third year in a row fans tuned-in by the millions, making the Super Bowl football game the most-watched television broadcast in history.

According to Nielsen estimates 111.3 million fans turned on their TVs to watch the NBC sponsored final match of the 2011/2012 football season between the New York Giants and the New England Patriots, constituting 47.8% of all US households.

The halftime show was an even bigger hit as far as number of viewers is concerned with 114 million people watching Madonna perform, making this show the most-watched Super Bowl halftime spectacle in history.

Twitter also went ballistic as 12,233 tweets per second were registered during the final few minutes of the game, setting a Twitter record for sporting events. According to Twitter, this Super Bowl game received the most tweets per second for an English language event in Twitter history. Last year’s game registered one third the number of tweets, 4,064 per second, but a year ago that was a record number.

So who won? Some say the Giants, but really, it was the businessmen selling ad time for this incredibly lucrative American commercial experience.