I’ll bet less than half of the people mobbing retail establishments today have a clue how today became known as “black Friday.” Time to dust off the old Business prof’s mortarboard and do a minilecture on the subject.
Many decades ago before the advent of machine accounting and computers, bookkeepers and accountants kept business records in ledgers on paper using pen and ink. When the DrsC ran a small business for several years I did it this way and, mirabile dictu, it works!
A convention among those keeping pen and ink account books was that when a business was losing money they expressed being in negative territory with red ink, while being ahead of the game or making a profit was written in black ink. That’s where the terms “being in the red” or “being in the black” arose.
Zoom back to the present. Retail establishments do as much as half of their business in the year’s fourth quarter. Shopping for Christmas and Hanukkah tends to ramp up in October and early November but begins in true earnest the day after Thanksgiving.
Retail establishments need to be big enough to deal with year-end shopping crowds, which makes them overly large for much of the year. Thus for the first three quarters their costs exceed their income and they run in the red, or lose money.
Fourth quarter rolls around and business picks up. When the holiday spending really hits its stride on the Friday after Thanksgiving conventional wisdom says big box stores start to show a profit, income begins to exceed costs, the books start to show black ink instead of red. Most of their profit occurs between black Friday and Dec.24.
Thus, the Friday after Thanksgiving became Black Friday, the day when retailers break even and start to show a profit.
