NPD Reports Black Friday Declines

Just-released data from The NPD Group throws cold water on the flurry of previous Black Friday reports depicting retail sales gains.

NPD reported Friday that during the week ending Nov. 26 spanning Thanksgiving, Black Friday and Small Business Saturday, sales were 5 percent lower than the same week in 2021, while unit sales fell 8 percent.

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NPD also reported that total November 2022 general merchandise retail sales were 8 percent lower than in 2021. NPD’s report is based on data collected from U.S. retail point-of-sale information. NPD did not break out data on any individual days.

“Black Friday appears to have brought more shoppers out to the stores, but that traffic clearly didn’t amount to more spending,” Marshal Cohen, chief retail industry adviser for NPD, said in a statement. “Retailers and manufacturers need to find new ways to engage the consumer in making purchases, converting consumers from social browsers to active buyers.”

NPD also reported that the 2022 Black Friday week underperformed 2021 and 2019, while exceeding the sales revenue results of the same week in 2020 during the first year of the pandemic. NPD said the week ending Nov. 26 marked the sixth consecutive week of in-store sales revenue declines for U.S. discretionary general merchandise. That’s consistent with retailers citing business slowdowns in October and November during their third quarter financial calls with analysts, yet some cited a pickup later in November, suggesting an acceleration of holiday gift shopping.

Black Friday week was also “the first time this year that discretionary general merchandise retail sales revenue fell below pre-pandemic 2019 levels (down 9 percent). Beauty was the only industry tracked by NPD where revenue and unit sales both increased during Black Friday week compared to each of the three previous years. Even the typically heavy-selling Black Friday industries, like technology, toys and apparel, fell short of last year’s sales performance.

“Compounding the economic pressures on consumers, the absence of new product in the market is a huge challenge for retailers right now,” Cohen said.

“The good news is that the traffic is there, which opens the door for impulse purchases and some self-gifting — if the consumer can be persuaded.”

NPD’s mostly somber take on Black Friday belies reports from Mastercard, Adobe and RetailNext.

The Mastercard Spending Pulse report for Black Friday showed retail sales rose 12 percent year-over-year, with in-store sales increasing 12 percent and e-commerce sales rising 14 percent. Mastercard also cited a 19 percent increase in apparel sales, a 4 percent rise in sales of electronics, and a 21 percent increase in sales at restaurants.

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.

RetailNext Inc., a retail intelligence firm tracking traffic at brick-and-mortar stores, said store traffic rose 2.5 percent for Black Friday through Sunday over last year. “The Black Friday weekend is proving to be a comeback kid year after year as consumers show an eagerness to return to pre-pandemic shopping levels.” said Joe Shasteen, RetailNext global manager, advanced analytics. “In 2020, we saw foot traffic at negative 42 percent compared to 2019, the last pre-COVID-19 year. In 2021, the variance was halved as store traffic jumped to negative 21 percent compared to 2019. Now for the holiday weekend in 2022, we see traffic rising compared to 2021, and continuing to reduce the gap between current traffic and the pre-pandemic traffic totals we were seeing in 2019.”

The National Retail Federation said a record 196.7 million Americans shopped stores and online during the five-day Thanksgiving to Cyber Monday period, supporting expectations for a 6 to 8 percent nominal sales gain for the holiday season.

But more consistent with the NPD’s Black Friday assessment was one from the Bank of America, which reported Friday that for the week ended the Saturday after Black Friday, clothing spending declined 6.2 percent year-over-year, but was up 24.9 percent versus 2019.

Bank of America, which aggregated credit and debit card data, indicated, “Last year was a strong holiday shopping season as consumers were still benefiting from stimulus payments and just beginning to attend social gatherings again, prompting spend on both gifting and refreshed wardrobes. We also think steeper discounts this year are contributing to lower nominal spend. These factors tempered the year-over-year spending growth rate. We expect this year’s shopping patterns will mimic a normal pre-pandemic holiday, versus a more spread-out pattern last year as consumers bought early to avoid stock outs.”

It should be noted that different organizations have different ways of calculating retail results, such as through payment data, consumer research and surveys, or retail data, and could be covering different merchandise categories and time periods.