Holiday sales encouraging, but are shoppers done?
NEW YORK (AP) - November 28, 2010 (WPVI) -- Holiday spending appears to be off to a respectable start, with shoppers crowding stores and malls in bigger numbers than last year on Friday and maintaining steady traffic the rest of the weekend.
Add in strong spending earlier in the month and robust sales online, and retailers are feeling encouraged. That's particularly true because shoppers also scooped up fashion and other items for themselves, though mostly where they saw bargains. The question remains how many dollars shoppers are prepared to spend before Dec. 24 in an economy that's still bumpy.
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.
"I started Thursday, and I'm finished," said Tyler Jones, 34, of Manhattan, clutching packages at the Manhattan Mall on Saturday. She said she started shopping online on Thanksgiving, grabbing deals on LCD TVs at Walmart.com, as well as clothing at Gap and Old Navy throughout the night and into Friday. Then she went to the mall. She figures she spent $1,000 on holiday gifts, $500 less than last year.
Sharon Collins, 57, of Wilmington, N.C., said she had aimed to stagger her holiday shopping, but she 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 heavy discounting and lower prices on certain types of items, particularly LCD TVs, held down overall spending. On Friday, retailers at shopping malls eked out a 0.3 percent increase to $10.69 billion, according to preliminary figures from ShopperTrak, a research firm that tracks sales 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 anywhere from 15 to 20 percent lower than Christmas 2009.
Earlier buying in November also stole some sales away from the day, said ShopperTrak co-founder Bill Martin. But 2.2 percent more customers came into stores on Black Friday compared with the same day last year. The research firm tracks sales at stores in shopping malls, not big discounters like Wal-Mart and Target, which draw much Black Friday spending.
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, according to a survey it conducts.
A fuller picture on spending will come Thursday when retailers report November revenue figures.
Online, spending rose more than 14 percent from Thanksgiving Day through Saturday, according to IBM's Coremetrics. The average order rose 14 percent and the number of items per order grew 15 percent, fueled by shoppers taking advantage of deals on Black Friday.
Online research firm comScore Inc. reported late Sunday that online spending for the first 26 days of November rose 13 percent to $11.64 billion, compared with the same period a year ago. On Thanksgiving Day, traditionally a lighter day for online spending, e-commerce sales rose to $407 million, up 28 percent from the year-ago period. That was helped by more stores pushing exclusive deals. Online spending is still a relatively small piece of the holiday pie, between 8 and 10 percent by various estimates.
Clearly, shoppers' approach to the holidays has shifted, shaped by the stores themselves. While Black Friday is expected to be the busiest day of the year, more spending was pulled forward as stores from Best Buy to Sears promoted discounts on holiday items earlier in the month, often pitching them as "Black Friday doorbusters" weeks before the real thing. More stores opened on Thanksgiving, 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 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.
Retail executives offered an upbeat assessment on Sunday.
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 laptops, but shoppers are also throwing in a few 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 including Taubman Centers Inc. and Macerich Co. both reported sales and traffic gains compared with last year, and traffic has remained steady through the weekend. Both reported that shoppers' buying for themselves remained strong. Footwear and clothing were key big sellers.
Analysts are also closely watching stores' inventory levels. Earlier this fall, many retailers worried they'd ordered too much holiday merchandise in the spring when the economic recovery had looked like it was gaining steam.
There was scattered evidence those worries continue. Gap, for example, offered 50 percent discounts throughout the entire store until 10 a.m. Friday, rather than just discounting specific 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. 15-25, 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.
black friday, cyber monday, consumer news
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