U.S. retailers are extending deals into Cyber Monday and beyond to try to sustain a 13 percent gain in Thanksgiving weekend sales.
Spending in stores and online rose to $59.1 billion in the four days starting Nov. 22, the National Retail Federation said in a statement yesterday. A year ago, sales advanced 16 percent over the holiday weekend.
Retailers have turned Black Friday into a week’s worth of deals, with earlier openings and online offers. Thanksgiving Day, once reserved for family gatherings, saw the number of shoppers rise to more than 35 million from 29 million last year, the NRF said. Even today’s so-called Cyber Monday is losing its distinction, with Best Buy Co. yesterday cutting online prices of televisions and J.C. Penney Co. (JCP) discounting cookware.
“What was Cyber Monday is now Cyber Weekend,” Poonam Goyal, a Bloomberg Industries analyst, said in a telephone interview yesterday. “It is no longer a one-day event. Year over year, Black Friday sales were strong and margins should have also been strong.”
About 28 percent of the weekend shoppers were in stores on Thursday night, up from about 24 percent last year, the NRF said. Chicago-based researcher ShopperTrak observed a 1.8 percent decline in sales on Black Friday itself, after chains including Wal-Mart Stores Inc. (WMT), the world’s largest retailer, offered early-bird specials.
Customers spent $423 on average this weekend, up 6.3 percent from last year, the Washington-based NRF said. The 13 percent jump in total spending suggests that some sales were pulled ahead from December and that retailers will have to keep up the promotions to avoid a lull.
“Retailers are going to have to get creative, such as price discounts or special events, to keep the customer engaged,” Patricia Edwards, chief investment officer for Bellevue, Washington-based Trutina Financial, said yesterday by telephone. Her firm owns stakes in Wal-Mart and Starbucks Corp. (SBUX) among more than $300 million in assets.
Online shopping on Black Friday rose 26 percent to exceed $1 billion for the first time, research firm ComScore Inc. (SCOR) said yesterday. Online sales advanced 16 percent in the first 23 days of November to $13.7 billion, with sales on Thanksgiving Day increasing 32 percent to $633 million.
“Retailers like Kohl’s, Macy’s and J.C. Penney are starting their Cyber Monday deals Sunday to transition their shoppers from the mall to their websites,” Miro Copic, a marketing professor at San Diego State University, said yesterday by telephone. “Retailers who wait may risk not having the momentum going into the holidays.”
The NRF said yesterday it may revise its holiday forecast once more is known about whether the U.S. Congress and Obama administration will avert the so-called fiscal cliff of budget cuts and tax-rate changes in 2013. It predicts holiday sales, including online, will rise 4.1 percent to about $586.1 billion this year, compared with a 5.6 percent gain in 2011.
Allan Schweber, 56, a home builder who lives in Bethesda, Maryland, said he planned to spend about the same this year as last -- several hundred dollars -- on clothes, consumer electronics and toys. He was browsing at the Wisconsin Place shops in the Washington suburb of Chevy Chase, Maryland.
“I expect taxes will go up for everyone next year,” Schweber said. “Maybe I am holding back a little.”
Online retailers are poised for a record $43.4 billion holiday sales season as shoppers increasingly rely on social networks and mobile devices to find and buy merchandise.
Internet sales will grow 17 percent from a year earlier and make up more than 10 percent of U.S. retail spending, excluding gas, food and cars in the year’s final three months, said Andrew Lipsman, ComScore’s vice president of industry analysis. That compares with $29.2 billion during the same period in 2007, when electronic commerce made up 7.4 percent of total spending.
“We shop mostly online,” said Lora Quinlan, 35, who with her husband, Kevin, bought most gifts for their two children on a site called onestepahead.com. The Waltham, Massachusetts, couple bought a toy kitchen set, play shopping cart and food, qualifying for free shipping, she said yesterday while looking for Christmas decorations and movies at a Target Corp. (TGT) store in Woburn.
Retailers had increasingly confident consumers visiting stores this weekend. More Americans this month said the U.S. economy will improve than at any time in the past decade, according to the Bloomberg Consumer Comfort Index. The share of households saying it would get better rose to 37 percent, the highest since March 2002. A year ago, the measure showed a record number of consumers said it was a bad time to spend.
The Standard & Poor’s 500 Retailing Index (S5RETL) slipped 0.2 percent to 668.97 at the close in New York.
A rebound in housing and the job market, along with a drop in household debt, has led additional consumers to say they’ll buy more this holiday, according to a survey this month by the Credit Union National Association and the Consumer Federation of America. Of those polled, 12 percent said they would boost spending, the highest level since 15 percent in 2007, while 38 percent said they would spend less.
Weather may help gains too as colder temperatures increase sales of sweaters, boots, scarves, gloves and jackets, according to weather-data provider Planalytics Inc. Last year’s Black Friday was the warmest in five years, the Berwyn, Pennsylvania- based firm said in an e-mail.
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