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A Foolish Take: Retailers Lowered Black Friday Discounts

By Leo Sun - Dec 11, 2017 at 1:33PM

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U.S. retailers offered less generous discounts to shoppers this year.

Retailers usually promote significant discounts for Black Friday. That trend continued this year, with pricing firm Market Track (via eMarketer) reporting an average discount of 44% in Black Friday circulars from 15 brick-and-mortar retailers.

However, it marks a small decline from an average discount of 45% in 2016. Retailers like Best Buy (BBY 2.42%), J.C. Penney (JCPN.Q), and Target (TGT 0.81%) all offered slightly lower discounts this year.

A comparison of Black Friday discounts in 2016 and 2017.

Data source: Market Track via eMarketer. Chart by author.

Those declines offset slight increases at other retailers, including Wal-Mart Stores and Sears. Market Track also notes that its study of 17 product categories across these retailers found a combined average discount of 45%, compared to 48% last year.

However, many consumers probably didn't save that much money. The deal site BestBlackFriday.com reported that the average savings on this season's most popular items likely topped out at 35%.

The slight reduction in promotional pricing is a positive sign for retailers, since the number of shoppers from Thanksgiving through Cyber Monday continues to grow, with over 174 million Americans buying goods in stores or online this year, according to the National Retail Federation. This means retailers won't have to crush their margins to attract shoppers.

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Stocks Mentioned

J. C. Penney Company, Inc. Stock Quote
J. C. Penney Company, Inc.
JCPN.Q
Target Corporation Stock Quote
Target Corporation
TGT
$142.38 (0.81%) $1.15
Best Buy Co., Inc. Stock Quote
Best Buy Co., Inc.
BBY
$66.77 (2.42%) $1.58

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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