Black Friday Disappoints Retailers

According to The NPD Group's Black Friday Report, retail results from the week may offer retailers little to rejoice about.



Given the massive advertising (and, ahem, online coverage) surrounding this year’s Black Friday, you would think retailers would be ecstatic about the numbers. Not so, says The NPD Group, a prominent provider of consumer and retail information. In fact, NPD claims that this year’s consumer technology retail sales grew by just 6 percent over 2006, less than one-half of last year’s growth rate. That’s the first time in the six years (tracked by NPD) that sales growth has dipped below the 10 percent mark.

“While revenue growth declined this year, we’re at least seeing a more rational pricing environment than last year, as well as a more stable competitive outlook,” says Stephen Baker, vice president, industry analysis, The NPD Group. “This is most certainly a positive harbinger of expected profitability throughout the holiday season, even if it calls growth prospects into some doubt.”

Last year NPD reported unfavorable unit-sales growth for consumer technology products, despite heavy customer traffic. Black Friday 2007 was different. This year unit-sales were up 9 percent, which is far ahead of the 6 percent dollar growth and a reversal from prior years. The consumer technology arena tends to be dominated by large and rapidly growing segments; however, this year there has been a further narrowing of the market, as the growth rate for plasma TVs, digital cameras and MP3 players declined sharply.

The Winners
Areas like notebook computer accessories and bags, camera accessories and cases, remote controls, digital cables, and computer memory all performed well—and likely contributed to the “basket-of-goods” mentality retailers were trying to impress upon their customers.

LCD TVs were the star of Black Friday this year. Unit volume increased by 45 percent and revenue jumped 80 percent. Most of this result was driven by the enormous change in the product mix that has occurred over the past year. This year 30-inch-and-larger products outsold the smaller sizes, which led to triple-digit increases in units and dollars among the larger sized TVs. The resulting triple-digit increases in units and dollars among the larger sized LCD TVs only required a 14 percent decline in average selling prices (ASPs).

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[Link: electronichouse.com]