Brown Thursday Backfires as Holiday Sales Plummet

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The decision by major retailers to move the start of the official holiday shopping season to Thanksgiving, may have backfired.

Walmart, Kohls, Toys R Us, JCPenny among others all opened their doors on Thanksgiving Day, calling it Brown Thursday,  an unprecedented move to jump start the already shortened holiday season that upset many. While the early open may have tamed often violent crowds, the numbers suggest that Brown Thursday was a gamble not worth taking.

Retailers saw the first spending decline on a Black Friday weekend since 2009, reinforcing economist projections for a lackluster holiday season  and chances retailers will extend the deep discounts already hurting their profit margins.

In store and on-line purchases fell 2.9 percent to $57.4 billion during the four days beginning with the Nov. 28 Thanksgiving holiday, according to a survey commissioned by the National Retail Federation.

While 141 million people shopped, about 2 million more than last year, the average consumer’s spending dropped 3.9 percent to $407.02, the survey showed.

Some analysts believe adding the extra day changed the mood of the consumer, as the shopping frenzy petered out by Friday afternoon.

“Retailers didn’t get what they wanted from Black Friday and they will need to make it up in the next three weeks,” Poonam Goyal, an analyst for Bloomberg Industries, said in an interview. “There will be some panic sales.”

While this is great news for those of us like to bargain shop, its also another sign of a deeply troubled economy. For the fourth year, disposable incomes have inched up minimally and job growth remains scattered. As a result, lower income Americans will have a harder time stuffing their stockings than America’s wealthiest, who are richer thanks in part to surging U.S. stock markets.

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Consumer confidence declined in November to a seven-month low, according to the Conference Board.

“Consumers are generally not in a great mood, feeling very uneasy about the economy and their jobs, and are looking for value this year,” Stephen Stanley, chief economist at Pierpont Securities LLC in StamfordConnecticut, wrote today in a note to clients. “They have their list and will check it twice, but they are not going to the mall and grabbing a bunch of random stuff because it is on sale or looks nice.”

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