Black Friday came and now it is time for Cyber Monday. Black Friday is a do or die for most retailers. If they make it good here, fine otherwise they have to discount even more. I also went to Target for some stuff in the afternoon. There was rush but not the kind that you would suffocate. It is surprising to see so many people even after you read all the news about how people are losing their jobs and having a hard time making ends meet. But I guess people love a deal and they went out in droves. The deals were good and people really bought stuff which they need and some which they did not simply because they were unable to resist a good deal.
But my point here is that the deals people see now are the real price of the things. It is that all year long the prices are marked up so high so that the profit margins of these retailers are up to satisfy the Wall Street and analysts and of course the investors. But since this year is special due to the recession the retailers have started to panic and the drive to having a good deal to persuade people to buy their stuff has never been greater.
But again here is the dilemma, the people are so stressed out with all the debt that either they don’t have the money to spend or a reluctant to spend but the retailers are enticing people to spend because if they don’t then the retailers will have to slash prices even more hurting their bottom line and also laying off their workers which in turn will lead to more joblessness and less customer traffic. So it is a catch-22 situation where the customers are reluctant to spend but the retailers have to sell in order to keep their employees and lower the jobless rate and if they don’t sell then there will be layoffs whose unemployment insurance will indirectly be financed by the same reluctant customers. Lets us see how Cyber Monday goes.