Cash Reigns During Thanksgiving Weekend Shopping
Thanksgiving weekend is known as a period of intense shopping for American consumers. As such, businesses expect to make up for lost revenues during the weekend. This weekend, however, there was a definite change in how consumers shopped during Thanksgiving weekend.
During the shopping spree of Thanksgiving weekend, cash was once again king. Considering that in the past few years, consumers usually took out their credit cards when they shopped on these days, the switch to cash only spending by a majority of consumers is a definite indication of how much consumer outlook on credit cards have changed.
According to a poll conducted by America’s Research Group for Reuters, a low 26% of Thanksgiving weekend shoppers used their credit cards to pay for their purchases. For the majority of consumers, cash was the preferred payment method. The switch is quite unexpected and may actually have cost retailers some additional sales.
America’s Research Group founder, Britt Beemer, said, “That’s an amazing shift in consumers’ habits”.
The research showed that a total of 39% of shoppers during the weekend paid with cash and the difference used debit cards in place of credit cards. For retailers, the preference of consumers to use cash is bad for business. According to Beemer, when consumers shop with credit cards, they usually spend anywhere from 20% to
40% on the gift than they would with cash.
One good news is that, of the people who earlier said that they planned to shop during Thanksgiving weekend, a greater percentage than the past years did so. According to the survey, of those who said that they would shop during the weekend, only 25.7% made no purchases. In 2008, the number was higher at 37% and it was at 38% in 2007.
The data taken from the survey, which was sourced from 680 persons, conforms to the results from a study by the National Retail Federation. The National Retail Federation’s survey showed that stores and websites would show more traffic during the Thanksgiving weekend but spending per person would be lesser.
Retailers have focused on avoiding the discounts they had to offer last year and have been cutting down their inventories to avoid the sap in their margins that these discounts bring. However, around 71% of consumers in the survey expect prices to become lower as Christmas approaches, putting up a hard challenge for retailers who want to avoid steep promotions.
Almost 50% of those surveyed said that store prices were at their expected levels for the weekend. 28% said that they were higher and 21% said that they were lower than expected.
