ShopperTrak, a Chicago research firm said Black Friday 2008 sales rose 3% over last year. The firm tracks retail sales at over 50,000 stores across the country. As stores were jammed with people looking for bargains, foot traffic is expected to decline nearly 10% due to the souring economy and rising unemployment rate. My own off-the-cuff research felt different, however.
Every year I go down to the local mall here in Silicon Valley to see the crowd and get a feel of the mood of the holiday shopping season. As typical, the shopping mall parking lot was jammed pack and the crowds were large. It was chaotic and frantic as usual.
I first visited Westfield Shopping Mall, the largest mall in Silicon Valley. My sense was that people were out there spending, but not spending on high ticket items like in the past. The bags were filled with smaller items and the consumer wallet seemed tighter. Foot traffic was healthy but as I watched people walk into stores, they weren't coming out with two bags in hand.
Perhaps there was a little more responsibility given the dampened spirits of late. I noticed less smiles and people looked less happier than usual. Some looked more stressed and worried. Definitely not like back in 1999 during the dot com run up when everyone was filled with enthusiasm.
Then I went across the street to the upscale Santana Row shopping mall where all the wealthy drive up in their high end Mercedes, Lambourghini's and what not. The crowds were also good, but there seemed to be less bags in hand as well. It looked more like people were window shopping if anything which is common in Santana Row given the high end services and products (like Beverly Hills Rodeo Drive).
I realize one day isn't going to define the holiday shopping season but for all practical reasoning one would think that this holiday season is going to be a disappointing one for retailers in Silicon Valley. The unemployment situation grows steadily worse as layoffs continue.
Silicon Valley unemployment is hovering near 7%, nearly a 50% increase from last year. California unemployment is at 14 year highs at 8.2% in October. Rumours are that Google is laying off employees. Yahoo has been laying off employees since the beginning of the year and undergoing another round. Hewlett Packard is laying off 24,000 people and Sun Microsystems has laid off 5,000 employees. Then there's the layoffs in the semiconductor industry and more.
Yes, Christmas may not be as wonderful as it once was but it is still Christmas. And for many here in Silicon Valley, if not California, they are looking more for a change in Presidential leadership to lift their spirits in the years to come.
About Kerry Kobashi
Kerry is the founder of KerryOnWorld. He lives in Silicon Valley and has worked as an engineer and project manager. He owns Kobashi Computing a consulting company.
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