Shoppers lined up at 6 Friday morning at department stores.
US Holiday Shopping Starts Strongly By Monica Summers
dailynews.yahoo.com
Saturday November 24 8:17 AM ET
NEW YORK (Reuters) - Shoppers mobbed U.S. malls Friday, chasing deep discounts offered by retailers desperate to salvage the holiday selling season from the grip of economic gloom, layoffs and the attacks of Sept. 11.
Traditionally one of the busiest shopping days of the year, the Friday after Thanksgiving is typically the start of the holiday shopping season. But, with discounts that are normally reserved for post-Christmas sales, retailers may be purchasing volume this year at the expense of fourth-quarter profits.
Even so, crowds of shoppers at shopping malls in predawn hours of Friday were larger than in past years, according to some shoppers, and continued to grow steadily throughout the day as people looked for bargains on hot toys and other goodies for the holidays.
The better-than-expected turnout, despite forecasts for holiday gloom, sent U.S retail stocks higher. The Standard & Poor's retail index rose almost 14 points, or 1.6 percent, to close at 894.05.
``All in all, I'm pretty encouraged by what I see here,'' said Jackie Fernandez, a retail analyst out watching the action at the Glendale Galleria mall, one of the largest shopping malls in southern California.
``It would seem to me that people are out looking for bargains right now and willing to shop as long as the price is right,'' Fernandez, a partner with Deloitte & Touche's consumer business practice, said.
Many industry watchers had said this year would be the worst holiday in recent history for retailers, as the fear of recession, continued job cuts, and increased personal debt prompts many shoppers to spend less than in previous years.
Declining confidence after the Sept. 11 attacks on New York and Washington, widespread layoffs and the recent spate of anthrax scares are all seen by consumers as reasons to hold down spending.
Ted Clinnin, a shopper at Chicago's popular State Street shopping district, said he expected to spend less money this year because of the volatile stock market and job insecurity.
``You don't know what's going to happen around the corner,'' Clinnin said. ``Getting into debt isn't the smart thing to do.''
Traditionally called ``Black Friday'' because shopkeepers used to mark their books in black ink to show a profit, the day after Thanksgiving is the one retailers look forward to most.
But, this year, U.S. households are expected to spend an average of $462 on gifts this Christmas, down from last year's projected average expenditure of $490, according to a survey conducted by The Conference Board (news - web sites), a private research firm.
DISCOUNTERS VS. DEPARTMENT STORES
The battle between the discounter and off-price department stores is expected to continue this holiday season, as price-conscious consumers opt to shop the budget route and department stores and specialty retailers rush to mark down prices in order to lure shoppers back into their stores.
The fear that follows, however, is that increased markdowns by retailers will further pinch gross margins and ultimately hurt the bottom line, making for more dismal fourth-quarter earnings results.
Even from the consumer standpoint, bigger markdowns and promotions could make for slimmer selections later on in the season, as many retailers have curbed their inventories in light of the slowing economy.
Ellyn Longacre said she ventured out to the Mill Stream Factory Shops in Lancaster, Pennsylvania, more out of tradition than necessity, and ended up spending about $1,000 with her mother and two sisters.
Still, while she had intended to buy sheets and towels from the Polo Ralph Lauren outlet store, the lines were so long and the stores so crowded, she ended up abandoning her purchase.
Afterward she conceded that anyone she didn't buy a gift for on Friday would likely end up with a gift certificate.
``I don't know that I have that kind of spirit to go out like I did in years past,'' Longacre said.
In previous years, toy retailers quickly ran out of the most popular games and toys, drawing the anger of consumers who were forced to wait until after the holidays to buy what they wanted for their family.
``The inventory levels that they're holding are probably pretty low overall, so as a consumer if you're not out there getting what you want now while they're promotional you're going to lose the opportunity to get sizing, the color and the items you want,'' Fernandez said.
ONLINE SALES ALSO SHOW BLACK FRIDAY BOOST
The online holiday shopping season also saw a surge on Friday, with many Web portals and retailers showing larger numbers of Web surfers visiting their sites.
Rob Solomon, vice president and general manager of Yahoo! Shopping, said the portal is seeing huge momentum going into the holiday shopping season with transaction volume up nearly 100 percent over last year.
But even online, sales and promotions were they name of the game, with many of Yahoo!'s top retail partners like Gap Inc., Neiman Marcus and Nordstrom offering discounts and free shipping to customers who shopped online.
Solomon said this year's hot battle for the No. 1 gift spot is going to the video game console makers like Microsoft XBox (news - web sites), Nintendo (news - web sites) Game Cube and Sony PlayStation. He said while XBox and Game Cube both rule from a search perspective because they are new products, PlayStation still garners more sales because it has been on the market longer than others.
A spokesman for Amazon.com Inc. also said activity was strong but gave no numbers, saying it was too early to gauge business this season.
Amazon.com said an interesting trend was the increased popularity of ``Wish Lists,'' in which shoppers list items they want and friends and family can purchase for them. This suggests that fewer people will traveling for the holidays this year, or they may be unable to carry multiple bags onto an airplane.
``This is the year when you're not going to be able to take four shopping bags of wrapped gifts on the airplane with you,'' said Bill Curry, a spokesman for Amazon. ``This is the year when some people may not be traveling at all.''
(additional reporting by Brad Dorfman and Laura Jacobs in Chicago, Mike Ellis in Detroit, Jeff Goldfarb in Pennsylvania and Andrea Orr in Palo Alto) |
