While retailers reported a strong Thanksgiving weekend, they are unsure how much people will spend before Christmas in an economy that's still bumpy.
Holiday Sales Encouraging, Will It Continue?
NEW YORK (AP) – Holiday shoppers gave retailers a happy Thanksgiving weekend, crowding stores and malls more than last year.
Add strong spending earlier this month and robust sales online, and retailers head into “Cyber Monday” encouraged. Particularly because many shoppers were buying for themselves, in addition to gifts, though mostly where they saw bargains.
But retailers remain unsure how much people will spend before Christmas in an economy that’s still bumpy. Shoppers, grappling with an unemployment rate of 9.6 percent, remain careful about spending and driven by deals.
Discounts, particularly early-morning specials, were deep enough that many shoppers say they bought more than they had planned. But some say that means they’re done, and they spent less than last year.
The heavy discounting and lower prices on some things, particularly LCD TVs, held down overall spending. On Friday, retailers at shopping malls had sales of $10.7 billion, an increase of 0.3 percent over last year, according to preliminary figures from ShopperTrak, a research firm that counts shoppers at 70,000 stores.
TV prices are falling almost twice as fast as they did earlier this year amid a glut. They’re selling for 15-20 percent less than Christmas 2009.
Earlier buying in November also stole some sales from Friday, said ShopperTrak co-founder Bill Martin. But 2.2 percent more customers came into stores on Black Friday than last year. ShopperTrak tracks sales at stores in shopping malls, not big discounters like Wal-Mart and Target, which draw much Black Friday spending.
Sharon Collins, 57, of Wilmington, N.C., said she had planned to stagger her holiday shopping but found a lot of good buys on Black Friday at Target and Kohl’s. By Saturday she had spent about $1,000, reaping savings of about 50 percent. She said she’d budgeted $2,000 but won’t need it.
“I am completely done.” Collins said. “Unless it is something I really need, I am not going back.”
The National Retail Federation trade group estimated on Sunday that 212 million shoppers visited stores and websites over Black Friday weekend, up from 195 million last year. A fuller picture on spending will come Thursday when retailers report November revenue.
Online, spending rose more than 14 percent from Thanksgiving Day through Saturday, according to IBM’s Coremetrics. The average order rose 14 percent; the number of items per order, 15 percent. The numbers were fueled by shoppers taking advantage of deals on Black Friday.
Online research firm comScore Inc. reported late Sunday that online spending in November through Friday rose 13 percent to $11.6 billion, compared with the same 26 days a year ago.
On Thanksgiving, traditionally a lighter day for online spending, e-commerce sales rose to $407 million, up 28 percent from last year. That was helped by more stores pushing exclusive deals. Online spending is still a small piece of the holiday pie – 8-10 percent by various estimates.
Online sellers are stretching what they call Cyber Monday promotions all week in an effort to attract shoppers.
“We’re expecting the biggest Cyber Monday. We’re seeing double-digit growth rates, and we don’t expect it to stop,” said Jerry Storch, CEO of Toys R Us, which is offering discounts on toys from Little Tikes to Imaginarium.
Cyber Monday got its name from the National Retail Federation when computer shopping was starting to become popular. People returning to work after the holiday weekend would shop online on office computers. As more homes got high-speed Internet service, Cyber Monday became less of a factor.
This year, shoppers’ approach to the holidays has shifted, shaped by retailers. Black Friday is still expected to be the busiest day of the year, but spending was pulled forward as stores from Best Buy to Sears promoted discounts earlier in the month. They often pitched them as “Black Friday doorbusters” weeks before the real thing. More stores opened on Thanksgiving this year, too.
“You are going to have to look at the overall month, instead of just Black Friday,” said Laura Gurski, retail practice leader at A.T. Kearney.
Lauren Beckley, a 28-year-old retail co-manager in Cincinnati, said she got a promotion at work this year but still plans to cut her holiday spending by 50 percent. This year, rather than scrambling at the last minute, she started shopping in July, taking advantage of “Christmas in July” promotions that were embraced by more retailers this year.
“I think I am bargain hunting a little more,” said Beckley while browsing for DVDs at a Best Buy in suburban Cincinnati on Saturday.
Stores hope to keep shoppers coming back with continuous deals and early-morning events on weekends. But some industry analysts question whether the lull between Thanksgiving weekend and the days before Christmas will be even more pronounced than usual.
“I believe customers will be waiting for the next round of deals,” Gurski added.
Stifel Nicolaus analyst Richard Jaffe described the weekend as a “success.”
“I think retailers have won the battle of driving customers into the stores, but have they won the war? We won’t know until January,” he said.
Amy Adoniz, general store manager at Best Buy’s Union Square store in Manhattan, reported steady traffic through the weekend after the frenzy Friday. The best sellers have been TVs and laptop computers, but shoppers are also throwing in extra items like Blu-ray players and cables that they hadn’t planned, she said. They’re also springing for more expensive items, she said.
Mall operators Taubman Centers Inc. and Macerich Co. both reported sales and traffic gains compared with last year, and traffic remained steady through the weekend. Both reported that shoppers’ buying for themselves remained strong. Footwear and clothing were big sellers.
Analysts are also watching stores’ inventories. Earlier this fall, many retailers worried they’d ordered too much holiday merchandise in the spring when the economy appeared to be strengthening.
There was scattered evidence those worries continue. Gap offered 50 percent discounts throughout its stores until 10 a.m. Friday, rather than discounting fewer items to draw shoppers.
Dana Telsey, CEO of Telsey Advisory Group, said Sunday that she believed inventories were appropriate and retailer profits aren’t in danger yet. Dec. 15-24, which accounts for 40 percent of holiday business, will tell the tale.
“It’s the crux of the season,” she said.
AP Business Writer Chip Cutter in Cincinnati contributed to this report.