Is Black Friday the best indicator of holiday retail sales?

The holiday season is almost upon us, and retailers and economists are eagerly looking forward to Black Friday sales numbers as a prediction of what's to come over the month of December. But are Black Friday results really the best indication of future performance? Some economists say no.

"Traditionally, people think that whatever happens on Black Friday sets the scene for the strength or weakness of sales for the whole holiday season," London-based economist Paul Dales told The Wall Street Journal. "It's an okay relationship. Sometimes it works. Sometimes it doesn't."

Last year, holiday transactions accounted for almost 20 percent of the year's sales, which increased to 27 percent if figures from January were included. November and December are traditionally considered the holiday months, but many retailers offer additional holiday sales in the new year, and many customers take that time to spend gift cards they received in December.

The Journal reported that economists have charted Black Friday sales over the last two decades, comparing them with overall holiday sales performance. They found that the Black Friday results were not, in fact, a strong indication of things to come.

Additionally, there isn't very much retailers can do in response to an underwhelming Black Friday, because they've already ordered all their inventory for the month of December and hired seasonal staff.

Some economists are also wondering if Black Friday sales are simply pulling in profit from other months, or whether they really are generating extra revenue. Consumers may hold off on spending money during the rest of the year, waiting for the bigger sales that arrive in November.

Regardless, your business is likely to see many more customers than usual this holiday season, so be sure that your credit card processor is fully able to support your store.

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