Black Friday Weekend Gives Retailers Hope, No Guarantees on Days Ahead

Black Friday washed away some retail blues, at least for the weekend.

Stepped-up discounting, weather conducive for getting out of the house, and renewed consumer enthusiasm for shopping the malls helped retailers reverse weak trends seen through October and most of November — and for the moment eased anxieties about how holiday 2022 will play out.

Though it wasn’t the blockbuster of years past when shoppers stampeded for doorbusters, this past weekend saw decent sales gains online and in stores. Americans responded to the surge of pre-price promotions, which were most often in the 25 to 50 percent range and preplanned, after holding back on gift spending earlier this year.

In addition, major stores stayed closed on Thanksgiving, abetting Black Friday’s business, while services increasingly being offered — such as extended deadlines for receiving packages in time for Christmas; buy now, pay later, and buy online, pick up in store — also helped.

By Saturday afternoon, traffic began to wane and Sunday was not expected to be a very big shopping day with the weather turning rainy, at times heavy in the Northeast and other areas. Several retailers, including Macy’s and Saks Off 5th, launched Cyber Monday deals on Sunday, however.

Looking ahead, industry experts suggested an evolving post-pandemic “normalization” of shopping patterns involving spikes in business on key shopping days, like Black Friday and Cyber Monday, followed by lulls in the business until about 10 days before Christmas. They see more of a roller-coaster rhythm to retailing compared to the extended, flattened sales pattern seen last year when inventories were low and consumers shopped earlier fearing stockouts. With inventory levels higher this season, and still bloated in some cases, many consumers know they can wait to buy until peak markdown days.

On Sunday, retailers told WWD they sensed consumers were eagerly hitting the stores — partly to shop and partly as an excuse to be with friends and family. They saw shoppers being very purposeful and targeted toward selections after having researched online for the products they wanted and the best deals, before actually purchasing in-store.

“Compared to what we had the last few years, it was a real Black Friday,” Stephen Lebovitz, chief executive officer of CBL Properties, a large REIT operating 57 malls and 40 strip centers in the U.S., told WWD. “We had lines of people waiting for malls to open and people braving rain to get some early-morning shopping in.

“Retailers for the most part exceeded goals early in the day,” said Lebovitz, citing Bath & Body Works, American Eagle Outfitters, Dick’s Sporting Goods, Hickory Farms and H&M among those beating plans at CBL Properties.

“Tanger Outlets experienced robust weekend traffic across the country, with overall numbers above 2021, which reflects further momentum against our record year,” said CEO Stephen Yalof. “While both Friday and Saturday performed above 2021 numbers, Friday continued to be the biggest day. Many of our brands saw heavy traffic throughout the weekend including Under Armour and Michael Kors. There was also excitement for new-to-Tanger brands including Serena & Lily and Summersalt.”

Throughout the weekend, Yalof added, “Our shoppers were in high spirits and carrying an average of three to four shopping bags. Our brand partners reported that despite long lines and crowds, customers were ready and willing to wait in order to find great deals. The extended dwell time is also building bigger baskets, and ultimately more sales per shopper visit.”

“Across the industry, this holiday season is proving to be significantly more promotional than in years past and shoppers are looking for the best deals,” said Paige Thomas, president and CEO of Saks Off 5th. “With more brands in our assortment than ever, Saks Off 5th is focused on providing value to our customers on designer fashion and top gift-giving categories.”

Thomas said Off 5th’s holiday deals began on Nov. 19 and will continue through next week. “As anticipated, we saw a strong response this Black Friday to our promotions, in-store and online, with shoppers gravitating toward dressed-up categories, including dresses and tailored clothing. As we look ahead to Cyber Week, we have an exciting lineup of designer flash sale events planned,” said Thomas, adding that the off-pricer’s strongest categories were sunglasses, denim, sweaters and luggage.

“We had a strong Black Friday. We really pushed hard on price point and value and it paid off,” said Bill Brand, CEO of Rue21. “Our $5 sleep pant, in girls, guys and plus-sizes, sold double the sales units from last year. It really speaks to how our demographic, younger lower-income customers, are looking for sharp price points and a great value. They just don’t have the spend right now. This value message needs to come in loud and clear. We had a lot riding on Black Friday and we delivered.”

Other bestsellers at Rue21 were graphic T-shirts, jeans, cargo pants, hoodies and fragrances.

“People want normal again and want the excitement of Christmas and holiday shopping, but they are challenged with the economy,” said Brand. “It’s not that they aren’t showing up. They’ve just been more discerning.”

In 2021, holiday sales soared 13 percent. But with tough comparisons, and despite the positive Black Friday weekend, the overall 2022 holiday sales outlook remains at mid-to-high single-digit gains. And when factoring in inflation, real gains are seen ranging from slightly negative to a point or two ahead for this season.

“The main story was that there were no traffic-limiting weather events,” said Evan Gold, executive vice president of Planalytics, which provides weather forecasting that helps retailers in their planning. “There was some rain in the Southwest, but no snow in any major market in the country. Today [Sunday] it’s a little rainy in New York and a few other markets, probably keeping some people from putting up outdoor decorations, but nothing significant enough to keep people at home.”

Gold said December “should be a great month for demand in seasonal items, which are in better inventory positions. If you look at the next five to seven days, the warmth in the east is going to move out. The month will be colder than last December, which was the warmest December ever recorded for the country overall.”

Ken Ohashi, CEO of Brooks Brothers, said Black Friday was “really good. We were extremely pleased. We saw an uptick in traffic in all channels. I’m very optimistic. I don’t want to sound too bullish, but I’m feeling good.” But he acknowledged the macro environment “makes me nervous.”

Prior to the holiday, he said Brooks Brothers stores had actually been outperforming digital, but over the weekend, online “kicked in,” thanks in part to a 40-percent-off promotion for Thanksgiving Day, when the stores were closed. On Black Friday, the promotions dropped to 30 percent, but sales continued strong.

Ohashi said inventories are in good shape with core replenishment items such as white or blue dress shirts and the 1818 suit “never out of stock.” On trend-driven items, “We didn’t buy to double-digit comps and overload. So by Q1, we should be in very good shape.”

“We’re coming off the best holiday we’ve ever had and we’re up against amazing comps, so if we get small single-digit growth, we’ll be happy,” said Bob Mitchell, co-CEO of Mitchells Stores, which sells luxury fashion. Currently, “Most high-end people are with their families,” he said, adding that the next two weeks are when the real action begins. “Our numbers will get so much bigger over the next four weeks,” he said. And while he’s not anticipating his numbers to be as big as in 2021, so far the stores are managing to maintain momentum.

In terms of categories, Mitchell said there is a significant shift, from men’s sportswear and women’s handbags to more dressy pieces for guys — tailored clothing, tuxedos, furnishings and shoes — along with women’s designer apparel. With inventories, “Our stores are filled,” said Mitchell. “As the cycle has changed, we have plenty of men’s sportswear and women’s handbags this year when we didn’t have nearly enough last year,” when there were serious supply chain issues.

Ken Giddon, president of the four-unit Rothmans men’s chain, said business on the opening holiday weekend was “very good,” adding, “We’re not breaking any records, but we’re ahead of plan and better than we thought.…Sales have shifted from true tailored clothing to the new work wardrobe.

“This is the most confused menswear consumer I’ve seen in my career,” Giddon said. “They know they have holes in their wardrobe but they’re not sure what to buy. That’s where service is so important.”

At Rothmans, customers are purchasing a wide range, from accessories and sweaters to pants and jeans, while refreshing their outfits for events and holiday parties. “We haven’t gotten a lot of gift buying yet — people were buying for themselves.”

Amish Tolia, co-CEO and cofounder of Leap, which operates nearly 100 physical stores for digitally native brands, said sales were strong over the weekend. Among the 50 brands with the largest number of stores are ThirdLove women’s intimate apparel, Goodlife men’s and women’s basics, and Naadam cashmere.

Tolia said planned promotions drew customers “chasing deals,” adding, “We’re in footwear, fine jewelry, home furnishings and apparel and we found apparel was the strongest, particularly women’s athleisure, which proves that comfort is still king.” Dressier products and office wear were more popular last summer.

On Small Business Saturday, Leap’s stores saw higher traffic than Black Friday, though the conversion rate was lower, suggesting customers were reacting to Black Friday incentives.

Tolia said while comping last year’s numbers will be “challenging,” he’s hopeful stores will reach their modest projections. “We’ve seen strong traffic in the streets and the malls and the consumer is generally excited to see what deals exist. They’re wanting and needing to buy, and while they will be slightly more selective, I think we’re in for a pretty good holiday season.”

While most accounts for the Black Friday and Saturday period were positive, there were a few mixed messages from certain financial and software firms tracking sales one way or another.

According to Adobe Analytics, on Black Friday a record $9.12 billion was spent online, up 2.3 percent from last year, with the major drivers being electronics, toys and exercise equipment. Adobe’s analysis covers more than 1 trillion visits to U.S. retail sites, 100 million stock keeping units, and 18 product categories.

Mastercard Spending Pulse reported that on Black Friday in-store sales were up 12 percent year-over-year, while e-commerce sales rose 14 percent.

“This Black Friday, retailers offered promotions across channels leading to strong year-over-year growth online and in-store,” Steve Sadove, senior adviser for Mastercard and former CEO and chairman of Saks Inc., said in a statement. “Apparel, electronics and restaurants were strong performing sectors as consumers turned holiday shopping into a full-day experience.”

“With holiday promotions kicking off long before the Thanksgiving weekend, consumers have been shopping strategically for the season’s best deals,” added Michelle Meyer, North America chief economist, Mastercard Economics Institute. “Retailers delivered on Black Friday with deals that enticed consumers to fill their carts despite the inflationary environment.”

Consultant Sonia Lapinsky, a managing director at AlixPartners’ retail practice, said: “What we saw was pretty lackluster traffic through malls. Folks were there buying, but they were buying with intent. There’s some energy around getting back into stores, but people are looking for a real deal.”  

Lapinsky said Black Friday was only OK and that consumers were just spending less as the traditional holiday selling season started in earnest. “If retailers were disappointed on Friday, I don’t think they’re going to make up for that on Cyber Monday,” she said. Going into the New Year, retailers are going to be busy clearing inventory and trying to incentivize this consumer “who really isn’t going to want to spend,”  Lapinsky said.  

That observation on purchasing was backed up by brick-and-mortar store data from RetailNext, which found that while Black Friday traffic increased 7 percent from a year ago, spending per consumer, or shopper yield, fell 6.8 percent. 

“What I saw was lines at companies like Lululemon or Apple or Canada Goose,” said Simeon Siegel, an analyst at BMO Capital Markets. “While those higher-end companies were trading on the strength of their brands, others seemed to be relying more on price discounts.  

“Promotions were clearly back,” the analyst said. “That should come as no surprise; we all know there was a ton of inventory. But I don’t know if [the price cuts] triggered what companies were hoping to. There was a lack of demand.” 

Siegel said replenishment is the key “r” word, not recession, in understanding the consumer. “In a replenishment conversation, there’s no price that will convince you to buy something you simply don’t need,” he said. 

Jane Hali & Associates, a retail analyst and consulting firm, has been tracking Black Friday/holiday deals since October. “In November, many brands/retailers already had higher promotions early in the month compared to last year. The week of Thanksgiving many started their Black Friday Preview, which did not change much the day of Black Friday. This makes sense since deals have started much earlier than any other year. We feel some of the promotions remain strategic. Handbags, footwear and luxury continue to hold on to prices and are the least promotional.”

The firm listed American Eagle Outfitters, Gap, Nordstrom, Kate Spade, Calvin Klein, Tommy Hilfiger, Vans, Kohl’s, Target and Walmart, among others, with higher promotions than a year ago.

Foot Locker, Rack, Levi Strauss, Wrangler and Lee were among those exhibiting lower promotions and those with price promotions even to a year ago included Ulta, Anthropologie, Free People, Macy’s, Coach, Michael Kors, RH and West Elm.

Talbots, which has 392 stores and 98 outlet stores, reported all of its channels — retail, outlet and online — were busy, with friends and families shopping together at pre-pandemic levels. “Customers are being very thoughtful on where they are spending their money given external factors, and we believe we are continuing to meet them where they are,” said a spokesperson. Customers were shopping for “refined and festive items, which indicates a return of holiday plans and parties,” the spokesperson added.

The brand’s Hampshire pant in red tartan, Black Watch and silver rose to the top five most-sold items. Customers were also looking for Talbots’ most popular cable crew sweaters, flannel shirts and corduroy five-pocket pants. The top categories were sweaters, pants, woven tops and jackets.

With 45 stores in the U.S., Uniqlo reported an overall increase in store traffic compared to last year with consumers gravitating toward products that offer functionality, a trend seen throughout the year. HeatTech — a fabric technology that retains heat and generates warmth — was a top seller, especially Ultra Warm HeatTech.

“We’ve noticed customers purchasing multiple units of one product, whether HeatTech in an array of styles or our U Crew Neck T-shirts in an array of colors,” a Uniqlo spokesperson said. The spokesperson added that customers are shopping earlier this year for the holidays, and seemingly more so for themselves.

“Selling was solid, not frantic,” said Craig Johnson, president of Customer Growth Partners. “Right now our estimate is for plus-5 to 7 percent for Black Friday weekend. People are making considered purchases. Black Friday is no longer the cultural phenomenon, though for teens and young adults it’s a big, big day. A great rebalancing is occurring here on the sales side. Instead of the crazy numbers of last year, this year it looks like it’s more in the normal range. There’s also more of an even split between hard and soft lines, suggesting a rebalance that way, too.”

CGP’s 16 researchers, who visited malls, power centers, outlet centers and lifestyle centers around the country over Black Friday weekend, concluded that American Eagle Outfitters, Aerie, Hollister and Urban Outfitters, as well as Lululemon, and home furnishings retailers Pottery Barn, Williams Sonoma and West Elm experienced very strong traffic. The beauty and toys categories also fared well. But Johnson added that women’s sportswear was slow, while department stores “were OK but by no means a home run. Mass retailers are little on the soft side. Walmart and Target not as strong as we’ve seen in the past, there is a trade-down effect, but people are struggling” with inflation.

Looking ahead, Johnson said the December lull will start in a few days and may be worse than in past years. “The buying pace started slowing down Saturday afternoon.”

Deborah Weinswig, CEO and founder of Coresight Research specializing in retail and technology, said, “Over the weekend, traffic density varied. Malls across the country seemed more crowded than one-off stores. There was plenty of inventory, including special Black Friday stock, though some items in the electronics category were selling out. There were substantial promotions throughout, many of which had started the week leading into Black Friday. From those we spoke to, traffic tapered [off] Saturday, but since Black Friday, consumers were still shopping the deals. There were Black Friday-only deals, weekend-only deals and Cyber Monday deals. The consumer is most likely more price-aware due to so much advertising and marketing. They know the price that they are comfortable paying and will act when they see it. Rewards and gamification loyalty programs are in full swing this holiday season driving consumers to increase their loyalty and spend into fewer retailers.”

— With contributions from Jean E. Palmieri, Evan Clark and Rosemary Feitelberg

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