Saturday, November 30, 2013

The dirty side of Black Friday: discounts up, profits the same

National Public Radio (NPR) is giving us the Black Friday low down, and it is not a pretty picture for us average consumers.

First of all, Black Friday, the Friday after Thanksgiving, is presented as the day "that retailers traditionally start making a profit" - which is an urban myth. It is pretty firmly entrenched, and it is nothing but PR.

Second, those pesky academic researchers looking at numbers, well, they have findings that make minimalist consumers happy and could well infuriate the rest of us.

Since the Great Recession, those Black Friday retail discounts have been up by 63%, yet retail profits have remained steady, flat.

The explanation is as simple as it is logical:  your friendly retailers will inflate the starting prices and then offer you deep discounts on these.

Finally, we can see what the big MBA tuition fees are really for. And how those student loans get paid back.

To be sure, there are a few real steep discounts, the "loss leaders", which are used to get you in the door and buy all the fake discount stuff.

Researchers have also found that, despite the internet price comparisons, determining "the price" of something is extremely hard. And that's just for the United States. Over here in Europe, the same "sh**"  (short for 'shopping') happens, though largely less publicized.

We are not sure if NPR had any agenda when they laid out the discounted facts to their audience but the timing is perfect.

We are still basking in the afterglow of the turkey dinner, making us less easily upset when confronted by unpleasant facts.

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