Black Friday Forecast

I used forecasts for the holiday season, which is sales for November and December, from three industry research sources. The National Retail Federation is predicting Holiday sales growth of 4% year-over-year. ShopperTrak estimates that Holiday sales will grow 3.6% y-o-y. The International Council of Shopping Centers forecasts a 2.5% sales increase.

In 2006, Black Friday accounted for $8.96 billion in sales and Thanksgiving weekend accounted for $18.1 billion (ShopperTrak). Thanksgiving weekend usually accounts for 10% of holiday sales (International Council of Shopping Centers).

I used a range of 3% to 3.5% growth (the average of the three forecasts above) to forecast growth for in 2007. I am assuming that growth in Black Friday sales is representative of overall holiday sales growth. Those assumptions yield 2007 Black Friday sales of $9.23 to $9.27 billion and Thanksgiving sales of $18.6 to $18.73 billion.

Estimates for sales for the Thanksgiving weekend should be out Monday or Tuesday next week. Actual sales results are scheduled for release on December 6.

One point to keep in mind is that this year is so different than the past several holiday seasons because of the slowdown in consumer spending and weak reports/outlooks from the retailers. This environment has spurred retailers to cut prices much earlier than normal. Think about Wal-Mart (NYSE: - ), J.C. Penney (NYSE: - ), Kohl's (NYSE: - ), Target (NYSE: - ), etc. All these stores and many others have had several sales events in the last 4-6 weeks. These promotions and discounts may have taken away some of the Black Friday sales pop.

We really won't know how good the weekend was until the retailers report sales for November. Of course, if sales are weaker or better than planned, retailers will likely pre-announce their sales prior to Dec 6.

.