Black Friday Sales Rise 0.3% as Shoppers Wait for Retailers to Cut Prices
Debbie Schwig joined the throngs at Apple Inc.’s Fifth Avenue store in Manhattan yesterday with her husband and dog. They didn’t buy a single gadget.
“We’re here to check things out today," said the 47-year- old nurse from Hoboken, New Jersey. "We’ll wait until vendors get more desperate.”
Even as stores across the U.S. reported increased traffic on Black Friday, the busiest shopping day of the year, sales rose just 0.3 percent to $10.7 billion, ShopperTrak, the Chicago-based consulting firm, said yesterday.
Still, there were signs of consumer strength. Shoppers took advantage of earlier-than-usual promotions in the first two weeks of November, pushing up sales 6.1 percent and 6.2 percent respectively, according to ShopperTrak. That helps explain why Black Friday sales weren’t more robust, the firm said.
At the same time, many consumers who pulled back for the past two years seem prepared to spend more this holiday season, Neil Stern, senior partner at Chicago-based consulting firm McMillan Doolittle, said in a Nov. 26 interview.
“There’s no question there’s pent-up consumer demand that will drive retail growth this season,” he said. “America is still a consumer-driven society. We just haven’t had the means to indulge.”
Retailers traditionally have viewed Black Friday -- so named because that’s when many stores become profitable -- as a bellwether for the entire holiday season.
That may not hold true this year because many shoppers are waiting for even deeper price cuts, says Roxanne Meyer, a retail analyst for UBS Securities in New York.
“The consumer does seem much more willing to spend when the product and the price is right,” Meyer said. “But consumers are increasingly waiting closer to Christmas” in the hopes that the deals will be better. She expects a last-minute shopping stampede.
Analysts’ estimates for holiday sales vary from little changed to increases of as much as 4.5 percent. The Washington- based National Retail Federation predicts a gain of 2.3 percent to $447.1 billion after an uptick of 0.4 percent last year and a 3.9 percent drop in 2008.
Those forecasts coincided with a rebound in U.S. consumer spending this year as the economy began adding jobs. Consumer spending, which accounts for about 70 percent of the U.S. economy, increased at a 2.8 percent annual rate in the third quarter, according to the Commerce Department. That was the fastest since the final three months of 2006.
Same-store sales, a key indicator because new and closed locations are excluded, rose for 14 straight months through October. Same-store sales for November and December may advance as much as 3.5 percent, the largest increase since 2006, according to the International Council of Shopping Centers.
Andy Bogats, a 38-year-old father of five, braved the crowds and rain on the morning of Black Friday for the first time in his life. He bought two 32-inch flat-screen Emerson televisions for $198 apiece at a Wal-Mart Stores Inc. location outside Pittsburgh.
“We targeted these TVs, and were fortunate to get them,” said Bogats, a former mortgage broker who now works in the construction industry. “Things are getting better.” So much so, that he and his wife may splurge on each other this year. “We didn’t do that last year,” he said.
While some shoppers plan to spend more this season, others continue to trim their budgets.
Shannon Parker, 39, and her sister-in-law Tracy Knapp, 42, have made a Black Friday shopping marathon an annual tradition. This year was no exception. The 12-hour shopathon took them from Wal-Mart, Target Corp. and Best Buy Co. to Kohl’s Corp. and Bon Ton Stores Inc. Along the way, they snagged everything from a TV to iPod docking stations to Christmas Eve pajamas for their kids.
There was one difference, however. Parker, a school administrator from Baltimore, put all of her purchases on prepaid credit cards to avoid busting her budget. “I’m still swiping the plastic, but it’s already paid for,” said Parker, who was visiting her sister-in-law in Allentown, Pennsylvania.
Some Americans opted to avoid the bedlam of Black Friday and shop online from home. Bridget Hujsa, a teacher from Bethlehem, Pennsylvania, is buying nearly all of her gifts online at Target and Gap Inc.’s Old Navy, where she found discounts on clothes and baby toys for her 7-month-old son.
“I prefer online," she said. "You don’t have to drive and deal with the crowds."
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