Black Friday Offers “Creep-y” New Sales Trend: Visa Vis your Wallet; Defensive Save for the GDP

On your mark, get set, shop!

Image courtesy of Feelart/

Image courtesy of Feelart/

Black Friday keeps coming sooner and sooner. Expect to see Kohl’s, JC Penney and Macy’s all unlocking their doors while your still trying to pry yourself out of your chair, post turkey. In fact, Kohl’s is opening at six pm, two hours earlier than last year. But that’s nothing compared to Amazon which is starting its Black Friday deals on Saturday. This Saturday, November 1, nearly four weeks before the actual “Black Friday.”  This trend even has a name. It’s called “Black Friday Creep.” How clever, sort of. You can thank the recession we endured a few years ago for all this Thanksgiving retail interruption. Several retailers aren’t too thrilled with their sales forecasts and are hoping those added shopping hours and Thanksgiving day will give their sales a much needed boost. But don’t bother standing on line at Gamestop or Costco. Those companies feel Thanksgiving should be spent with families. However, GameStop will be flinging it’s doors open at midnight. Not sure how that fits into the quality-family-time equation. Costco, however, strongly feels its employees need time with their families and that they work especially hard during the holiday season. So what does that say about how Walmart executives feel about their employees, whose stores will be open all day on Thanksgiving?

Speaking of transactions…

Image courtesy of Michelle Meiklejohn/

Image courtesy of Michelle Meiklejohn/

Visa reported its fourth quarter earnings and how do you think the largest credit and debit card company did? I am being rhetorical. The company reported $3.23 billion in revenue, a whopping 9% increase over the same time last year. Analysts expected only $3.19 billion. Net income for the company came in at $1.4 billion which came out to a sweet $2.18 per share. That pretty little figure was 17% higher than last year’s fourth quarter and $0.07 higher than what Wall Street predicted. One of the reasons these numbers are so darn plump has to do with Visa’s growing payment volume. The company processed almost 17 billion transactions with about $1.2 trillion changing hands. Note the use of the “t.”  For the year, the company can already boast almost 70 billion transactions. That’s nothing to sneeze at, I am sure you know. All eyes are always on Visa, which is seen as a barometer of our collective spending habits and other financial aspects of our lives.

Growing, growing not gone…

Image courtesy of jannoon028/

Image courtesy of jannoon028/

Our fourth quarter grew at 3.5%. Economists only predicted a growth rate of 3% How ’bout that? But don’t pop open the champagne just yet because it didn’t grow as much as the previous quarter’s 4.6% rate. But it’s not fair to compare the quarters. After all, we were just coming off a brutal and fiscally inconvenient winter so the economy did have a jump of rebound there. So what kinds of things contributed to this quarter’s growth? One of the big contributors, whose spending frenzy helped growth is the government. Yes, in this case, major government spending proved to actually be healthy for the economy. But it wasn’t just any kind of government spending that sent our GDP into upward glee. For that we need to give a big shout out to defense spending, which played a prominent and much appreciated role in our economy this quarter.



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