Black Friday Retail Observations: Tech is Golden

While the market waits, the pundits bloviate and the crush of the cost of a gallon of gas is weighted on the debt laden consumer; however, consider the following:

After seeing the ads for the 4:00 am and 5:00 am openings on Friday, I decided to check things out for myself. First up was Kohls Department Store (KSS) at 4:00 am. The people inside were standing in lines throughout the store to pay for purchases. The largest discounted sale items were already sold out at 4:30 am. Housewares, small appliances and clothing seemed most popular. Target Department Store (TGT) had lines as well, but Kohls seemed to be winning the "most bags per consumer" trend. All in all, pretty standard stuff in the department store arena.

Next was Best Buy (BBY), opening at 5:00 am. The line of people waiting to get in wrapped around the building from the front doors to the backside of the building. I'd estimate the crowd at 1,000 people. Another 300 people lined up in a second line after the initial door opening crowds began to move inside the store. Police and store personnel were on the scene orchestrating an orderly flow into the store. The typical evening news stampede with broken limbs and trampled people was not happening here, but I'm sure it will be somewhere on the evening news. Top sellers, as expected, appeared to be LCD TVs, digital cameras, laptops, external hard drives and video game consoles.

One day does not make the Christmas retail season but if Friday's observations proved only one thing it is that the consumer wants their digital age items and a screen to watch them on. Storing, saving, computing and backing up the holiday photos and music is also a must-do priority.

The bottom line

If I were a betting man I'd say the electronics retailers will be one of the primary forces in this year's Christmas economic indicators and the parallel consumer health. People will combine trips, carpool, ride share, sell a house, rent an apartment and forgo that $5 latte to save money. What they WILL NOT FORGO is cellular phones, credit cards, internet access, video gaming, LCD TVs and a gallon of gas to get all the Christmas bargains home.

Disclosure: Author has a long position in XOM, EMC and MA

Comments

[Tom B:]

"www.bloomberg.com/apps...;"

People may be in the stores, but the numbers imply a bit of a
pull back on spending-- enough to be somewhat worrying.

2007 Nov 26 09:17 AM