Monday December 1, 08:33 PM
Mixed picture for retailers as US holiday season opens
By Rob Lever
WASHINGTON (AFP) - American consumers (ANCS.PK - news) still shopped but with more prudence than in recent years, according to surveys from the opening weekend of the year-end holiday season.
The National Retail Federation (NRF) said its survey of the "Black Friday" weekend after the Thanksgiving holiday showed shoppers spent an average of 372.57 dollars over the weekend, up 7.2 percent over last year's levels.
The survey showed more than 172 million shoppers visited stores and websites, up from 147 million shoppers last year.
The retail group continues to project that holiday sales will rise 2.2 percent this year to 470.4 billion dollars.
"Pent-up demand on electronics and clothing, plus unparalleled bargains on this season's hottest items, helped drive shopping all weekend," said NRF president Tracy Mullin.
"Holiday sales are not expected to continue at this brisk pace, but it is encouraging that Americans seem excited to go shopping again."
Other reports suggest a grimmer picture for the year-end season, which is seen as a make-or-break period for many retailers and a key for the struggling US economy, which relies on consumer spending for 70 percent of activity.
The day after Thanksgiving is called Black Friday because it typically marks a turning point for retailers to go into "the black," or become profitable.
A separate survey by ShopperTrak RCT showed Friday's retail sales excluding food, gasoline and restaurants increased 3.0 percent over 2007 to 10.6 billion dollars.
ShopperTrak said that Black Friday is not always the best indicator for holiday season performance, but that retailers should be cautiously optimistic as deep discounts drove consumers to spend despite economic pressures.
"Retailers truly experienced what we've dubbed the 'perfect storm' over the last few weeks, with the financial markets melting down, the presidential election which typically slows retail traffic and relatively high gasoline prices -- all of which slowed both retail traffic and spending," said Bill Martin, co-founder of ShopperTrak.
"Under these circumstances, to start off the season in this fashion is truly amazing and is a testament to the resiliency of the American consumer, and undeniably proves a willingness to spend."
A note of caution however came from Howard Tubin, analyst at RBC Capital Markets, saying that the heavy discounts from Black Friday may have drawn bargain hunters but that the outlook remains cloudy.
"Shoppers appeared to come out and spend on the Friday following Thanksgiving," he said.
"However, and unlike in prior years, we do not think that Friday's momentum carried over into Saturday. We toured two malls in New Jersey and didn't notice crowds or customer traffic to be significantly different than on an average Saturday at either of the centers."
In cyberspace the shoppers were equally cautious, based on a survey by the research firm comScore, which said retail e-commerce spending for the first 28 days of the holiday fell four percent from a year ago to 10.41 billion dollars.
Black Friday saw 534 million dollars in online spending, up one percent from a year ago, according to comScore. For the combination of Thanksgiving Day and Black Friday, online sales were up two percent relative to last year, it reported.
Douglas McIntyre at 24/7 Wall Street said the increase in sales is nothing to cheer about since it comes amid heavy discounting of as much as 70 percent as retailers struggle for survival.
"The fact that Black Friday total sales saw a minor improvement is a sucker play," he said.
"It may give a slight boost to GDP (gross domestic product), but that makes GDP an unreliable indicator of how some American companies are doing. The economy may look like it is rebounding ever so slightly. But that will not matter much if companies go further into the red. All it means is more job losses down the road as retailers try to improve their bottom lines."
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