It’s still a new thing in Australia, but Aussies are lapping it up.
So, the Black Friday weekend is gone… what did we learn?
Is the Aussie consumer alive and kicking? Is the economy going to keep pumping along? Or has the RBA’s rate hikes thrown a poo into the party?
It’s actually funny. Five years ago, Black Friday wasn’t even a thing. But now, it’s the biggest trading day of the year. It’s even busier than the Boxing Day sales. It’s bigger than the entire week leading up to Christmas Eve!
That’s wild. It accounts for 25% of the whole Christmas shopping period (if you believe that Christmas shopping starts in November.)
Ruslan Kogan reckons that sales at Kogan.com will be 500% above the daily average.
So Black Friday is big.
(Fun fact: Black Friday is called that because it’s the Friday after the Thursday thanksgiving holiday. No one was showing up to work and people were pulling so many sickies that they started comparing it to the Black Plague! If that doesn’t put you in a buying mood I don’t know what will.)
And what have we learnt?
Well, it seems like consumers have palmed off the RBA’s rate hikes and are happy to spend big.
Gerry Harvey at Harvey Norman said that Friday set a new record, and momentum continued through the weekend:
“All the bargain hunters are out there. The biggest sales are in computers and electronics. There’s still a lot of money out in the community and people are looking to buy now instead of waiting,” Mr Harvey said.
And the head of the Australian Retailers Association expects to break records:
Paul Zahra, the former boss of department store group David Jones and now chief executive of the Australian Retailers Association, said that ARA forecast that about $6.2 billion would be spent over the four days and records were likely to be set. “There’s still a day to go, but that’s what we’re seeing,” Mr Zahra said.
Boom. Killing it.
Now it may be the case that consumers are pulling purchases forward. They might be looking at the inflation data and thinking that now’s the time to get in cheap.
Economists might tell that story.
But how many people do you know who check the inflation data before they make a purchase?
I think it’s more likely to be the case that the savings warchest that households built up over the pandemic is still in effect.
Yes, rates have lifted. Yes that’s impacting on household budgets.
But there’s enough buffer there to protect consumer spending.
And since consumer spending is about two-thirds of GDP, that should buttress economic growth going forward.
The RBA might not be happy about that right now. They want to stomp on demand to break the back of inflation.
But I think it does make their job of nailing a soft landing an awful lot easier.
And that’s good news for everyone.
JG.
Graham Johnson says
Who told you that was the reason this Friday was named “Black Friday”? Because that’s wrong.
This was the day of the year when all retailers have paid for in the preceding 11 months is overheads, and where thus ” IN THE RED” up to this point. Black Friday marks the day when all monies collected from now until the end of the year are Pure Profit….. ie: ” IN THE BLACK”
Thats where Black Friday came from…… Not some tripe about the black plaque….