Black Friday Isn’t What It Used to Be

Black Friday was once a hallmark celebration of American consumerism. Lately, it has lost some of its thunder.

It’s true that shoppers looking for big discountscan still line up early at Macy’s or Best Buy on the day after Thanksgiving, in hopes of snagging a bargain. But for many, the bargain has already been had.

Check your inbox: Those emails offering the “Best Prices of the Year” have been coming in for days or weeks as retailers try to beat one another to your wallet.

“When you think about Black Friday, the competitive landscape has really shifted to Black Friday deals prior to Black Friday,” Jeffrey Gennette, chief executive of Macy’s, told investors on a recent call as he explained why the company was spreading out its promotions. “We’re in the midst of that along with our competitors.”

That’s not to say that Black Friday has lost all meaning. The days when scores of customers camped out at big-box retailers or trampled one another in the rush to get cheap televisions may be gone, but Black Friday is still shorthand for the shopping frenzy that grips Americans this time each year.

“It’s still a cultural event, but it’s not what it was some years ago,” said Craig Johnson, founder of the retail consultancy Customer Growth Partners. “It’s nothing like it used to be.”

Here is what you need to know about Black Friday shopping.

How did Black Friday come to be?

The term “Black Friday” was coined around the 1960s by Philadelphia police officers. On the day after Thanksgiving and before the annual Army-Navy football game on Saturday, tourists would storm retailers in the city and the crowds would overwhelm law enforcement.

Retailers embraced the interest but the original meaning was lost on many people — who came to understand being in the “black” as a reference to profits at retailers (compared with red, which signifies losses).

Over the decades, thanks to retail promotions, it became a fixture on the national calendar, — eventually defined by long lines, unruly crowds and occasional casualties. As stores sought to compete for shoppers, they extended their hours — first starting at the crack of dawn on Friday, then the night of Thanksgiving.

That trend, facing a backlash from retail workers, began to reverse a few years ago. Many retailers, including Walmart, now make a point of staying closed on Thanksgiving.

In the past 20 or so years, Black Friday sales have also spread internationally, said Dale Rogers, a business professor at Arizona State University. “It started off as a little American thing,” he said. “Now it’s really global.”

Sales now start long before Friday.

Retailers slowly introduced sales earlier, and now deals can be found as early as October, said Mr. Johnson, the retail consultant.

“If you’re a retailer, you don’t want to capture demand by dropping your prices so low that you don’t make money,” he said. “The way most people capture demand is by targeting early demand.”

Consumers have spent 5 percent more online in the first 20 days of November than they did in the same period last year, according to Adobe Analytics.

Many retailers say that spending on the other end of the holiday shopping calendar, in the days approaching Christmas, is more important as people rush to nab last-minute gifts.

Barnes & Noble, for example, sells more than 20 million books in December alone, with the seven days before Christmas accounting for 20 times the sales of an average week. In 2022, Christmas Eve and the Saturday before Christmas were the busiest days for dollar stores, according to Placer.ai, a market research company.

Mr. Johnson said his firm predicted that Black Friday would be the third-busiest day for retailers this year, behind Dec. 23 and Dec. 16, the last two Saturdays before Christmas.

What are retailers saying about holiday shopping?

Companies have spent much of the past year celebrating a surprisingly resilient consumer who has continued to spend despite inflation and rising interest rates.

But there are signs that that’s starting to change. Last quarter, many executives told analysts that shoppers had started pulling back.

The Federal Reserve has raised interest rates rapidly starting in March 2022 in an effort to slow down the economy and curb inflation. Though the rate at which prices are rising has eased significantly, the overall increase in prices is starting to weigh on consumers, limiting the amount of discretionary income at their disposal.

“Consumers are feeling the weight of multiple economic pressures, and discretionary retail has borne the brunt of this weight for many quarters now,” Christina Hennington, chief growth officer of Target, told analysts on a recent earnings call.

That doesn’t necessarily mean consumers won’t turn out, but they are more likely to take advantage of promotions and less likely to make big purchases like furniture or certain electronics, analysts expect.

Corie Barry, chief executive of Best Buy, told analysts on an earnings call Tuesday that the company was “preparing for a customer who is very deal focused” and was expecting sales to concentrate on days like Black Friday, Cyber Monday and the days just before Christmas.

The National Retail Federation, an industry trade group, forecasts that holiday sales will increase 3 to 4 percent from last year, which is in line with prepandemic levels but not as high as the past two years. Holiday sales rose 5.3 percent in 2022 and 12.7 percent in 2021.