Summary
I was at home watchig thousands of people spending the night to crash stores. I watched carts overfilled with product and long lines at the registers. I opened the paper to see deep discount coupons.
Analysis
I always enjoyed watching the big numbers rolling in during this time of the year. It gave me a high that sales were higher then the year before. Giving high fives and strutting around was better then declining sales. Yet, when all the numbers were tallied and the final results were figured the end results ended with a loss and not a profit. I did feel like I passed for 400 yards going 35 of 40, but not scoring a touch down. In the end my numbers were good but the game was lost.
The name of the game in retail is to show a profit. SSS is a good measuring stick, and very important, but the bottom line is the most important. Example you have a great year and celebrate, yet you must look ahead to next year. Now how do you repeat last years numbers? Sell more product! Well if the product you sell becomes cheaper, due to dollar valuations and overseas producers one needs to sell more product to hit the previous numbers. Factor in competition and the desire to deep discount coupons on top of already sale prices the retailer finds himself in a position to sell 2-3 times the goods just to hit the numbers from the year before.
How can the retailer sell that much? One way is to have hotter prices earlier in the season then, not only the competitor, but also himself. This continues the spiral downward. This year the pre thanks-giving ads had as hot prices then black friday last year. I see 50% off ads with 15-20% of everything with a 15% senior discount. Where is the margin?
It is good for the consumer but it wil be hard for the retailer to hit profit estimates. 400 yard passing is great, but I would rather win the game.
