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Store Traffic Falls Again on Black Friday but Not All News Is Bad

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Shoppers line up to buy TVs and other electronics during the early morning Black Friday opening of a Best Buy store in Costa Mesa, Calif.


Photo:

eugene garcia/epa-efe/rex/Shutterstock

A surge in online shopping and higher spending by low-income Americans gave a lift to the start of the holiday season, even as initial reports showed that foot traffic to traditional stores continued its long decline.

During Thanksgiving and Black Friday, traffic to U.S. stores fell between 5% and 9% compared with the same days last year, estimated RetailNext, which uses cameras to track people in both mall-based and stand-alone retailers. Another measurement firm, ShopperTrak, estimated traffic fell less sharply, about 1% over the two-day period from a year ago.

Purchases continued to shift online as stores put many of their best deals on their websites and more consumers, even those earning minimum wages, shop on their smartphones. Internet sales surged 24% on Black Friday from last year, estimated

Adobe Systems
Inc.,

which tracks activity on thousands of websites.

Many lower-income Americans are finally feeling more flush a decade after the recession, say shoppers and retail executives. Lower gas prices and rising hourly wages are giving them extra cash to spend, a boon for

Walmart
Inc.,

second-tier mall owners and other retailers that count on them for a large percentage of their sales.

“My company is doing better and gave us raises” this year, said James Smith, a 42-year-old forklift operator at a wine distributor, who was shopping in a Teterboro, N.J., Walmart on Black Friday.

Last Christmas, Mr. Smith, his wife, Rickeyna, and their four children had just moved out of a New Jersey shelter. “Last year the kids didn’t get a lot of things,” said Ms. Smith, who recently got a promotion at a Checkers restaurant.

The family now lives in a nearby apartment and plans to spend hundreds of dollars on gifts, including Disney Princess dolls, a scooter and a $98 motorized princess carriage. “After last year, we want to make it special,” Ms. Smith said.

Walmart U.S. CEO Greg Foran said in an interview that the retail giant’s lower-income shoppers are feeling more confident as gas prices fall, wages rise and jobs are easier to find. “As you go through each of those, I think that you’ve got to say that for most people we serve in America it’s OK,” he said on Thanksgiving.

When feeling flush, Walmart shoppers tend to add an extra item to their shopping basket, which is reflected in the company’s recent strong quarterly sales figures, he said. “I think that retail is at a really good place at the moment, online and in stores,” he said.

“A lot of our holiday shoppers, I don’t think they own shares on Wall Street,” Mr. Foran said, in reference to recent drops in the stock market that might make wealthier shoppers wary.

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When to Buy

Black Friday often has the deepest discounts, but not always. A look at discounts advertised in weekly circulars last year for select categories.

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Average discount

≥50

31-40

21-30

≤20%

41-50

Nov. 19-25

Dec. 24-30

Christmas week

Black Friday week

Oct. 15-21

Women’s

apparel

Women’s apparel had the deepest discounts of any category

Cameras and

accessories

The best deals for cameras were long before the holidays

Typical of most categories, best prices for footwear were during Black Friday

Footwear

Biggest discounts for toys were near the end of the holiday season

Toys

Electronics deals were about as good the week after Black Friday

Electronics

Sporting

goods

Not much discounting for sporting goods during the shopping season

#wsj-ai2html-1542834259972 position: relative; overflow: hidden; width: px; display: none; .wsj-ai2html-1542834259972aiAbs position: absolute; .wsj-ai2html-1542834259972aiImg display: block; width: 100% !important; #wsj-ai2html-1542834259972 p font-family: Arial,Helvetica,sans-serif; font-size: 13px; line-height: 18px; margin: 0; #wsj-ai2html-1542834259972 .wsj-ai2html-1542834259972-aiPstyle-3-0 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 18px; font-weight: 500; color: #323232; margin-top: 1px; #wsj-ai2html-1542834259972 .wsj-ai2html-1542834259972-aiPstyle-3-1 font-family: “Retina Narrow”,Helvetica,Arial,sans-serif; font-size: 13px; line-height: 16px; font-weight: 300; text-align: right; color: #333333; margin-top: 1px; #wsj-ai2html-1542834259972 .wsj-ai2html-1542834259972-aiPstyle-3-2 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 18px; font-weight: 500; text-align: right; color: #323232; margin-top: 1px; #wsj-ai2html-1542834259972 .wsj-ai2html-1542834259972-aiPstyle-3-3 font-family: “Retina Narrow”,Helvetica,Arial,sans-serif; font-size: 13px; line-height: 16px; font-weight: 300; padding-bottom: 2px; color: #333333; margin-top: 1px;

Average discount

≥50

≤20%

21-30

31-40

41-50

Nov. 19-25

Dec. 24-30

Christmas week

Black Friday week

Oct. 15-21

Women’s

apparel

Women’s apparel had the deepest discounts of any category

Cameras and

accessories

The best deals for cameras were long before the holidays

Typical of most categories, best prices for footwear were during Black Friday

Footwear

Biggest discounts for toys were near the end of the holiday season

Toys

Electronics deals were about as good the week after Black Friday

Electronics

Sporting

goods

Not much discounting during the shopping season

#wsj-ai2html-1542834259972 position: relative; overflow: hidden; width: px; display: none; .wsj-ai2html-1542834259972aiAbs position: absolute; .wsj-ai2html-1542834259972aiImg display: block; width: 100% !important; #wsj-ai2html-1542834259972 p font-family: Arial,Helvetica,sans-serif; font-size: 13px; line-height: 18px; margin: 0; #wsj-ai2html-1542834259972 .wsj-ai2html-1542834259972-aiPstyle-2-0 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 18px; font-weight: 500; color: #323232; margin-top: 1px; #wsj-ai2html-1542834259972 .wsj-ai2html-1542834259972-aiPstyle-2-1 font-family: “Retina Narrow”,Helvetica,Arial,sans-serif; font-size: 13px; line-height: 16px; font-weight: 300; text-align: right; color: #333333; margin-top: 1px; #wsj-ai2html-1542834259972 .wsj-ai2html-1542834259972-aiPstyle-2-2 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 18px; font-weight: 500; text-align: right; color: #323232; margin-top: 1px; #wsj-ai2html-1542834259972 .wsj-ai2html-1542834259972-aiPstyle-2-3 font-family: “Retina Narrow”,Helvetica,Arial,sans-serif; font-size: 13px; line-height: 16px; font-weight: 300; padding-bottom: 2px; color: #333333; margin-top: 1px;

Average discount

≤20%

21-30

≥50

41-50

31-40

Dec. 24-30

Nov. 19-25

Christmas week

Black Friday week

Oct. 15-21

Women’s

apparel

Women’s apparel had the deepest discounts of any category

Cameras and

accessories

The best deals for cameras were long before the holidays

Typical of most categories, best prices for footwear were during Black Friday

Footwear

Biggest discounts for toys were near the end of the holiday season

Toys

Electronics deals were about as good the week after Black Friday

Electronics

Sporting

goods

Not much discounting for sporting goods during the shopping season

#wsj-ai2html-1542834259972 position: relative; overflow: hidden; width: px; display: none; .wsj-ai2html-1542834259972aiAbs position: absolute; .wsj-ai2html-1542834259972aiImg display: block; width: 100% !important; #wsj-ai2html-1542834259972 p font-family: Arial,Helvetica,sans-serif; font-size: 13px; line-height: 18px; margin: 0; #wsj-ai2html-1542834259972 .wsj-ai2html-1542834259972-aiPstyle-1-0 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 18px; font-weight: 500; color: #323232; margin-top: 1px; #wsj-ai2html-1542834259972 .wsj-ai2html-1542834259972-aiPstyle-1-1 font-family: “Retina Narrow”,Helvetica,Arial,sans-serif; font-size: 13px; line-height: 16px; font-weight: 300; text-align: right; color: #333333; margin-top: 1px; #wsj-ai2html-1542834259972 .wsj-ai2html-1542834259972-aiPstyle-1-2 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 18px; font-weight: 500; text-align: right; color: #323232; margin-top: 1px; #wsj-ai2html-1542834259972 .wsj-ai2html-1542834259972-aiPstyle-1-3 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 18px; font-weight: 500; text-align: center; color: #323232; margin-top: 1px;

Average discount

≤20%

≥50

41-50

31-40

21-30

Women’s apparel

Cameras and accessories

Footwear

Toys

Electronics

Sporting goods

Dec. 24-30

Oct. 15-21

Nov. 19-25

Christmas

week

Black Friday

week

Source: Numerator

Over the past year, low-income workers saw long-awaited wage gains after being left behind during most of the last decades economic recovery. Pay in the retail sector, one of the country’s largest employers of hourly workers, rose 3.8% in the second quarter, more than the 3% increase for professional-services workers, according to the Labor Department.

While upper-income families might not change their spending drastically from year to year, an extra dollar or two in hourly wages can substantially alter what some low- or middle-income households are able to afford over the holidays. Some gains may also show up later in the season since several people were working long shifts on Black Friday.

A pay raise means that Michael Lehman, a 29-year-old worker at Walmart, will be able to buy toys for his daughter this holiday, something he plans to do later in the season since he had to work on Black Friday. The raise was “not really substantial, but it was enough to be able to do things for my little one,” said the Zephyrhills, Fla., resident. “I couldn’t really afford anything last year.”

Mark Zandi, chief economist for Moody’s Analytics, said, “It should be a banner Christmas for lower-income households, and the increase in their spending this holiday season should outpace the growth in spending by middle and higher income households.”

Long-term bifurcation of wealth has helped some U.S. retailers that cater to low-income shoppers face off against

Amazon.com
Inc.

with fewer bruises because those households are less likely to shop online. Around 57% of online consumers with a household income of $35,000 or less bought online in the past three months, while 70% of online consumers overall did so, according to research firm Forrester.

Still, the battle for low-income shoppers online is heating up as smartphone usage becomes widespread in all income brackets. Last year, Amazon.com said it would offer people who obtain government assistance a cheaper monthly Prime membership. Walmart allows online grocery-pickup shoppers to pay in cash or through the food-stamp program. Big chains, including

Target
Corp.

and Walmart, have been sacrificing profit margin to compete more aggressively on pricing.

Overall, buying online surged over Thanksgiving weekend, as shoppers juggle time with family and a hunt for deals. Even shoppers who came to stores made many of their purchases online. Store pickups of online orders rose 73% over Thanksgiving and Black Friday compared with the same days last year, said Adobe.

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Not all Americans are feeling more confident. Since the recession, low-income households also face rising costs and a slower recovery compared with wealthier Americans, some economists say.

“Wages are going up, but real wages are not for those income groups,” because rising rents, health-care costs and inflation are eating into wage gains, said David Weil, dean of the Heller School for Social Policy and Management at Brandeis University and a former Obama administration labor official. “It’s just costing people more to live.”

Melody Maguder, a 56-year-old telecommunications specialist, said her union wasn’t able to negotiate a new contract and in recent weeks her 401(k) took a hit from the stock-market selloff, making her less inclined to open her wallet. “I’m not getting any younger,” said the Menomonee Falls, Wis., resident. “I want to conserve the money I have.”

Write to Sarah Nassauer at sarah.nassauer@wsj.com and Khadeeja Safdar at khadeeja.safdar@wsj.com

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