By Beatrice E. Rangel
BLACK FRIDAY -- the super duper sales after Thanksgiving Day were slower and less bountiful than years past we are told by a chorus of economic observers, including the Wall Street Journal, Bloomberg and Reuters. Six million Black Friday shoppers stayed home, apparently, unlured by the bargains on offer.
Several explanations for this behavior have been presented. First, retailers began to offer discounts earlier this year, with many retailers beginning the consumer hunt as early as November 1st. Then there was another retailer strategy of opening on Thanksgiving Day to better spread the seasonís shopping traffic. Consumers accordingly complied!!
According to the National Retail Federation (NRF), 44.8 million out of an estimated 136 million holiday weekend shoppers joined the onsite shopping fray on Thanksgiving Day rather than Black Friday in 2013. This represented a 27% increase from 2012. This year the figure went up by about 10%. Of that number, roughly 8% of those were at stores by 5 p.m. Thanksgiving Day.
In terms of dollars spent in the two day shopping frenzy, the number was $12.29 billion -- a 0.5% decrease from $12.35 billion in the same two-day period last year.
Then there was the Internet -- Thanksgiving Day and Black Friday fell short of the previous years sales records with $1.33 billion and $2.4 billion, respectively, according to Adobe's data, though Thanksgiving Internet traffic increased a solid 27%.
Shoppers spent $380.95 on average, mostly on clothes, electronics, books, DVDs and video games, down 6.4% from $407.02 last year. This means consumers were much more cautious about their expenditures but also are mastering the task of hunting for bargains.
Cyber reality has consolidated to the point where price competition and consumer convenience are essential to succeed in business. Malls and laptops will from now on need to be fully synched for retailers to capture a larger share of the more prudent consumer spending pie. This will enhance choice, reduce prices and increase convenience.
Meanwhile, South of the Rio Grande a large tranche of consumers seem to have been quarantined.
In Venezuela, the already high scarcity index jumped from 36% to 48%. With a rapidly growing inflation that was officially over 60% during the summer and a dollar that has more than doubled in local currency terms to 175 bolivars in just 2 months, consumers have been effectively priced out of both the malls and net.
In Argentina, these distressing developments are yet to take place, but the government in Buenos Aires is trying hard to enter the fray and successfully compete with Venezuela in a race to the bottom. This week the Argentine Peso was trading in the parallel market at 17 per US dollar -- it doubled in a year -- while inflation was officially clocked at 35%.
And in order to make sure it continues to be the country of the future, Brazil has let the cost of living grow over the past five years to a point were all gains in reducing poverty are now threatened. Indeed, in 2003 the dollar traded for 3.5 reais; by mid-2011, it only bought 1.53 reais -- virtually a third of the 2003 figure in real terms. And although the exchange rate has slipped back to 2.3 reais to the dollar, the impact upon the price index has been virtually null. Domestic appliances cost about 50% more than in the US.
In short, many countries of South America seem to have placed their bets on the roulette of destiny and pray for yet another commodity boom to ignite their growth. In a sense they are holding to corporativism, when they need to nurture internal aggregate production and demand, whether physical or cybernetic. Also by Beatrice Rangel in her Latin America from 35,000 Feet seriesBeatrice Rangel: An Eerily Familiar Week in the Americas
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Beatrice Rangel is President & CEO of the AMLA Consulting Group, which provides growth and partnership opportunities in US and Hispanic markets. AMLA identifies the best potential partner for businesses which are eager to exploit the growing buying power of the US Hispanic market and for US Corporations seeking to find investment partners in Latin America. Previously, she was Chief of Staff for Venezuela President Carlos Andres Perez as well as Chief Strategist for the Cisneros Group of Companies.
For her work throughout Latin America, Rangel has been honored with the Order of Merit of May from Argentina, the Condor of the Andes Order from Bolivia, the Bernardo O'Higgins Order by Chile, the Order of Boyaca from Colombia, and the National Order of Jose MatŪas Delgado from El Salvador.
You can follow her on twitter @BEPA2009 or contact her directly at BRangel@amlaconsulting.com.