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Why Most Black Friday Deals Are Not Really Deals

While people fight and push for Black Friday deals today, the cruel irony is that most of those "deals" really aren't bargains.

According to, shoppers will actually pay more over the next few weeks compared to the rest of the year.

The retail profit margin (the amount of price hike) is usually higher during the holiday period.

For 15 of the largest stores in the US, their profit margin will be 11 percent during the holidays, but only 9 percent during non-holiday shopping.

Home Depot and Lowe’s are likely to be the only stores that offer real bargains, while Macy’s, Bed Bath & Beyond, and L Brands (Victoria’s Secret) normally pull higher profits during the holidays.

The Wall Street Journal reported that this trick, also called "price massaging," works well because most stores hardly ever sell products at their full price to begin with, so any markdown looks great.

Many retail companies actually push up prices of certain products months before the holidays, which makes those Black Friday discounts seem too good to pass up.

"A lot of the discount is already priced into the product. That's why you see much more stable margins," said Liz Dunn, an analyst with Macquarie Equities Research, told the Wall Street Journal.

However, shoppers don't seem to care as long as they get the "feeling" that they got a good deal, that's all that matters.

The real deals will likely be in January, when stores have to clear out their seasonal merchandise.

Sources: and Wall Street Journal


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