Friday, November 28, 2008

Black Friday.

This year there was only 1 (update, there are now 3 shopping fatalities) reported Black Friday related fatality. Lots of people either camped outside stores or woke up very early to grab a few discounted items.

For the readers from outside the US. Black Friday is the day after the Thanksgiving Day. It is the traditional beginning of the Christmas shopping season. It is called Black Friday because that's when the retailers go into black. Being in red means making losses. Being in black means being profitable (to see what I mean, look at how the negative and positive numbers are formatted in the 'number' type in Excel). The retailers claim that they operate with negative margins all year long and make profits during the 1 month Christmas shopping season. I'm not sure that it's true as I have not researched their income or cash flow statements. But a lot of them go bankrupt in late January and early February when the financial data are put together so there must be some truth to it...

Given the negative savings of the American households, (we spend more than we earn!) the retail business sounds like an attractive thing to do. Hence there are a lot of sellers which drives the margins down.

2 comments:

Armen Filadelfiatsi said...
This comment has been removed by the author.
Armen Filadelfiatsi said...

People should boycott these shamefully shameless public displays of greed. If they're not trampling people, their throwing all merchandise to the floor as they rifle through the right size, leaving the general impression of infants going through their toys.