1115.org

Scanning the cable news networks on Friday morning, the big story was obvious: “Black Friday”, the traditional start of the Holiday shopping season. Consumers were shown lining up in front of stores at 4 am, waiting in nervous anticipation for Best Buy or Wal-Mart or Toys ‘R Us to open. The general spin was positive, that this holiday season would surpass the disappointing sales totals from the last few years, providing evidence of a strengthening economy and increased consumer confidence.

But after the first full weekend of HolidayShop ‘04, no one seems quite sure of anything. Some recent headlines:

USA Today: “Hopes rise for robust holidays”
Los Angeles Times: “Retailers’ Early Holiday Present”
Minneapolis Star Tribune: “Holiday shopping season begins softly”
ABC News: “Retailers Post Mediocre Holiday Sales”

So which is it? As with many things, it depends who you’re asking. High-end consumer electronics such as flat-screen tvs or Apple iPods are selling well. So are luxury goods and toys. But what about the big gorilla, aka Wal-Mart? Their sales were weak. While some analysts blamed Wal-Mart’s poor performance on their lack of “door-buster” sales, there is another thing to consider:

For retailers, the start of the holiday shopping season was “tough for the masses — great for the classes,” Davidowitz said. “It’s a tale of two cities.”

The well-to-do have money to burn, he said, while a family of four with a $40,000 income is “pressed tremendously” because of rising gas prices and health care costs.

If these admittedly early trends continue throughout the season, the overall holiday shopping picture could be quite top-heavy—rich people spending a lot of money on the latest toys while the working class struggle in an era of low wages, high gas prices and an employment situation that hasn’t yet fully corrected itself. But that won’t stop some people from whipping out the Visa anyway. That credit card retailer reported a 6.1% increase in use over last season, and rival MasterCard had a whopping 9.3% increase.

This might be a good sign for holiday sales. But considering how many people are walking around with thousands and thousands of dollars in credit-card debt, maybe we should hold off on the celebrations for a bit.