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Shedding Some Light on Black Friday

Jeremy Glaser

Jeremy Glaser: I'm Jeremy Glaser with Morningstar.com. With Black Friday upon us, shoppers across the country are heading towards the mall. Here to talk about the impact that this is going to have on retailers is senior retailer analyst, Kim Picciola. Kim, thanks for joining me.

Kimberly Picciola: Thanks for having me.

Glaser: So there is a lot of talk about how this day is just so important for retailers' bottom line, do you think that's the case?

Picciola: Well, it is the official kickoff to the holiday shopping season, but actually the busiest shopping day tends to be the Saturday before Christmas. So while there are great deals and everyone is into the door busters and it really does kind of get consumers into the holiday shopping spirit, it isn't necessarily the most important day of the year for them.

Glaser: So if we see breathless reporters from the mall saying that sales are up half-a-percent or something like that, we shouldn't read too deeply into that about how it's going to impact the rest of the holiday shopping season?

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Picciola: No. You know I think the big retailers that are really focused on the door busters, Wal-Mart, Best Buy, Target, really pushing consumer electronics, I think those retailers stand to do pretty well this holiday shopping season and on Black Friday, but I wouldn't get too concerned about the actual numbers that come in on that day.

I do think it is an opportunity for retailers to kind of tweak their strategy as they enter the holiday shopping season and they get a better feel for what consumers are demanding and the prices that they are willing to pay on certain goods.

Glaser: Now last holiday season was kind of marked by pretty incredible markdowns, we saw some just huge sales across almost every category. Do you think that this holiday period is going to be as promotional as last year?

Picciola: We think it's going to be a very promotional holiday period. We think the promotion is going to start at a little slower pace. Retailers last year were entering this period really frantic about how much inventory they had on hand and they really had no choice but to slash prices early on.

We think this year inventories are much leaner as we head into holiday shopping season and retailers can be a little more selective about the promotions and the way that they're going to carry out the promotional activity this holiday shopping season.

Glaser: So if you're looking for a great deal, it might make sense to actually wait a little bit instead of trying to be first in line at the blowout sales?

Picciola: Yeah. I mean the door busters on Friday, there is usually some great deals then, but we do think that as the holiday season progresses, retailers will tend to get more aggressive on price as they look to get rid of goods.

Glaser: Is there a sense of certain categories that might be a better deal? If you're looking for a present for someone or are you better off buying that flat panel TV or a tie?

Picciola: Well, consumer electronics tends to be pretty popular promotional item on Black Friday, so we expect some pretty good deals on TVs, laptops, GPS systems. There's a little bit of apparel deals going on on Black Friday, but probably not as much as what you would see probably later into the holiday shopping season.

Glaser: Kim, thanks for helping me shed some light on Black Friday.

Picciola: Thanks, Jeremy.

Glaser: For Morningstar.com, I'm Jeremy Glaser.