Black Friday Sale begins at midnight

[Ronnie]

We are having a Black Friday Sale at ReattaOwner.com. Beginning at midnight tonight, all information on our website is 40% off the regular price... And best of all you don't even need to stand in line to get the discount!

[Guest Richard D]

I WANNA BE FIRST!!!!

[padgett]

Or find a parking place. Unless something extraordinary comes along I do not plan to go anywhere. My son is a manager at a major chain and his workday today is almost 24 hours.

If you do go shopping, be nice to whoever is working there, they need it.

[KDirk]

Ok, Rant on - fair warning.

I worked 18+ years in retail and will never go back as I'd rather starve than deal with that scene again. That stores chose to open at 9 and 10 pm on Thanksgiving (and the corporate mindset that results in such stupefying decisions) is a large part of the reason I got out of it entirely in 2008, when I was down to a 1 day a week part time position. The people who line up and pitch tents to take advantage of it are enablers, and are most of the problem. This could be expressed as "If you come, they will build it".

All these places are chasing their tails trying to outdo each other. What they won't admit is that there is pretty much a fixed pot of money to be tapped in consumer spending (and that pot is not what it used to be either, these days is it more like a 40 oz). Take this admittedly over-simplified example:

There are 100 customers with an aggregate total of 1 million dollars to spend. There are 10 stores, each open 10 hours. If each store gets an equal slice of the spending pie (unlikely but bear with me here), they each will have sales of $10,000 per hour. Then they deduct their expenses and have their profit.

What happens when they all decide to open for 20 hours instead of 10? Hint: customers do not suddenly have more money to spend. So, they have sales of $5000 per hour. Since they are now paying an additional 10 hours of payroll (on an admittedly lousy level of staffing in most stores, I know because I've been there and done that) and keeping the lights and heat or A/C on, they have increased their expenses, yet with the same gross sales they end up with less profit.

This doesn't take into account the public backlash over their decision to open so much earlier, and the resulting loss of goodwill that may cause some customers to give them the big kiss-off as a result. It also doesn't factor in the disgruntled sociopath with the pepper spray who lays up a couple of dozen customers who now are not spending their money at your store, but rather on an ambulance ride to the ER due to severe respiratory distress.

Nice going guys. Makes me proud to say I didn't do any shopping at all. I'll go on record as predicting this moronic trend of early opening will further erode profits and be bad for business. Despite that, they will do it again next year just because in big business stupid decisions almost never get rolled back, they just get justified with semantics and expense cuts elsewhere to mitigate the damage.

/Rant off.

KDirk

[Guest steveskyhawk]

Kevin is correct with the exception of one huge factor. There is NOT a finite amount of money for consumers to spend. That number is inflated by the aggregate limit on the consumers credit cards.

Edited November 26, 2011 by steveskyhawk (see edit history)

[padgett]

a) I use a debit card but not online.

Years ago in Texas (Barney may remember) there were blue laws (no Sunday sales). Ethnics complained so the law was changed to limit sales to one day on a weekend. A few stores closed on Saturday so they could open on Sunday, and get access to an untapped market.

c) The bulk of Americans with money work during the day. In many cases today it is both partners. By staying open until 7 or 9 pm during the week, that taps a market that normally cannot be reached 9-5.

d) Not saying it is easy but in today's economic climate management can expect people to work 14-16 hours a day at times for a fixed salary.

e) Just a note but when I was a kid back in antediluvian times, the average work week in the US was 48 hours (six days), the 40 hour work week is comparatively recent. Many employers seem to be using the downturn as an excuse to return to 48-50 hours. and reduce the workforce by 20%. Considering the fixed costs of an employee (Social Security, health and life insurance) even paying overtime, it is a cost savings.

[KDirk]

Ok,

Steve raises a variable I did not address. I will conceded that credit cards do increase the pool of "money" available to spend at a given point in time, however I will also point out that:

1. Purchasing on credit is not creating more money, it is only deferring the payment of the amount spent to some point in the future. In the process of so doing, it also adds interest, such that you can add x% to the original amount spent, perhaps many times over if you only pay the minimum amount due each month.

Compound interest is a nasty thing; I urge everyone to play with the exponent function on your calculator sometime to see what I am talking about! Compounding of interest, especially at today's loan-shark rates of 25% and up on some credit cards, is a weapon that destroys many who lack restraint. And let's face it, watching the news coverage of Black Friday's shopping orgy shows there are many who lack restraint. One thing they will not lack come January is regret.

2. By virtue of point #1, what is bought on credit will reduce what can be purchased later on when the bill comes due. So, retailers may have a profitable Christmas shopping season on paper. But then the sales will be way down in the 1st quarter and probably 2nd Q as well (even more so than usual), as people sit at home and weep over their credit card statements, unable to spend any more until they have knocked down the balance which may take many months or years even.

This in turn makes retailers reliance on the next year's Black Friday even more critical to bring them back to profitability. This cycle of pulling demand forward by way of credit, and thus reducing sales even more once past the apogee of spending that occurs in November and December can only run so many cycles before it blows up. Things are dangerously near that point now.

3. The only exception to points #1 & 2 is if a consumer runs up their credit cards and then declares bankruptcy, thus effectively defaulting on what is owed. Still, this amount has to be eaten by someone, so it shows up as a loss somewhere when this happens. Of course, it is assumed that the debtor is successful in getting a bankruptcy judge to wipe out the entirety of their debt. This may not be the outcome, as the judge will see what has taken place and likely not discharge what is owed entirely.

Addendum: I also think that credit card usage is way down out of necessity. Many people maxed out their cards on essentials during the crunch of the last few years. These individuals are either shut off by their card issuer, too spooked to run up their balances anymore, or have learned the hard lesson of profligacy that has destroyed them financially, and they have cut up their cards, only to spend what they can in cash. That stores have advertised layaway so heavily in the weeks leading up to Nov. 25th, is clear proof that they are not counting on the availability of consumer credit as much as in years past. This is very telling about the financial state of the average consumer.

This is not the go-go 1980's or 90's anymore, and while a lot of people are still trying to keep up appearances, it is becoming painfully apparent by their strain to do so that we are upon the last hurrah of shameless, unabashed consumerism. This would be a good time to brace for impact.

KDirk

[DAVES89]

All I know is I did my Black Friday purchasing at my local U Pick. Good pricing short wait.

These are the guys I took leftover Thanksgiving meals to. It has become a tradition for me to take meals to two different yards for the guys to enjoy.

[NCReatta]

All I know is I did my Black Friday purchasing at my local U Pick. Good pricing short wait.

These are the guys I took leftover Thanksgiving meals to. It has become a tradition for me to take meals to two different yards for the guys to enjoy.

Did anyone take you out with pepper spray over some Reatta parts? :eek:

[DAVES89]

No but I was pulling parts for one of the guys over at the Riv site. Left some of my tools in a Riv's engine compartment, forgot which one and just as I found them a guy showed up to pull parts. Surprised me a bit as usually I am the only guy in these cars.

As a matter of fact they moved all the baby Rivs and Reattas into one area. [i'm talking all within 20 cars of each other]. I don't know if they did it for me [i like to think that they did it for me] but it sure is convienant.

[padgett]

There are ways to create demand for something obscure and possibly their computer noticed particular cars being accessed at particular times. Those with demand wil go to the front of the yard.

Personally keep credit cards (have had AmEx cards for years I use for online purchases - have had very few disputes and they are aggressive about handling. Locally I use debit cards when I do the swiping.

Key is to keep things paid off. Only payment I have is home mortgage and that is at 4% & holder is my credit union. No car payments help.

Like you said, all to many are upside down on car, home, and credit cards. When that happens, the vig is significant. Interesting thing is that the best interest rates go to those who do not need to borrow so the cycle is even worse.

Guess many are just relying on the collapse of the dollar (US$ is already less than Canadian) to pay off in worthless money if they have thought at all.

[DAVES89]

We have one credit card [my wife and I] and use it only for emergencys or on line purchases. I try to pay for everything in cash. As a matter of fact when I bought my first Reatta I flew down to Florida with a pocket full of $100's in my pocket. All my other "fly down drive back" cars I now use money orders. I don't want charge card companies profiling me if I can help it.

As an added benefit I find I get better service and better pricing as the seller doesn't have to worry about scams, bounced checks, or the transaction fee charged by the charge card companies...

Edited November 26, 2011 by DAVES89 (see edit history)

[Ronnie]

I never use debit cards for anything but ATM machine withdrawal. I like having a middle man (credit card company) between my bank account and Julio, who takes my card in the back room and swipes it, at the Mexican restaurant. Don't like the idea of the money coming directly out of my bank account as is the case with debit card purchases. If something goes wrong with a purchase I want to be able to complain before I pay instead of pay and then complain .