Many believe Black Friday got its name because it is the time of year when traditional retailers moved from the red into the black because of their after-Thanksgiving sales, but the term Black Friday was first used to describe something completely different.
In September 1869 two robber barons, Jay Gould and Jim Fisk, colluded to buy as much of America’s gold as they could in order to drive the price up. Then the two planned to sell it at a huge profit. Instead, they caused the stock market to collapse the next Friday, hence the term, Black Friday.
One hundred years later, in the 1960’s, Philadelphia police described day-after-Thanksgiving shopping as Black Friday. People flocked downtown and the police had to work extra long shifts managing the mayhem and preventing shoplifters who took advantage of the crowds and chaos. Philadelphia retailers tried to change the term to “Big Friday” to erase the negative perception, but the phrase didn’t catch on.
The term Black Friday wasn’t widely used nationwide until the late 1980s, when retailers across the country began having door-buster sales. In the thirty years since, Black Friday has become a five-day sales event and includes Small Business Saturday and Cyber Monday. It historically makes up 20% of total retail sales. In 2020 the pandemic caused an even greater shift toward online shopping, with 44% more consumers shopping online compared to 2019.
Typically Black Friday sales numbers are used as an indicator of the country’s economic health. Consumer spending makes up almost 70% of U.S. GDP, so a strong Black Friday points toward a strong economy.
In 2021, there was a 1.3% decrease in Black Friday sales compared to 2020, and Cyber Monday sales were down 1.4%. Worse yet, compared to pre-pandemic 2019, sales were down 28%. This year, Black Friday sales were impacted by supply chain issues. Because consumers were fearful of shortages, they expanded their holiday purchasing window, beginning as early as October, potentially making the after-Thanksgiving sales period less important overall.
Inflation has also impacted sales. The Christmas Price Index measures what it would costs to purchase all of the items from the Twelve Days of Christmas song (though the methodology of putting a price on ten lords a-leaping remains a mystery). Compared with 2019, the Christmas Price Index is up 5.7%. In 2019, buying all items in the full verse (i.e. a partridge in a pear tree, two turtle doves, three French hens, etc.) was $38,994. This year it was $41,206. While twelve drummers drumming is likely not on anyone’s holiday shopping list, the Christmas Index does reflect the current inflationary trends in the U.S. economy.
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