Vanessa Gomez, a 44-year-old mother of two, walked through a J.C. Penney Co. store last week in Queens, New York, took in the discounts of as much as 70 percent -- and walked out empty-handed.
“I’ll wait until Friday,” said Gomez, a secretary from the Ozone Park section of Queens, referring to so-called Black Friday, the post-Thanksgiving consumer event that kicks off the holiday shopping season.
Gomez may reflect the mindset of many Americans. Having watched retailers cut prices amid record unemployment and falling housing prices, shoppers have learned to play the waiting game. Of the 138 million people who plan to shop this weekend, about 40 percent will analyze the bargains before leaving the house, according to the Washington-based National Retail Federation.
“The consumer does seem much more willing to spend when the product is right and the price is right,” said Roxanne Meyer, a retail analyst for UBS Securities in New York. “But consumers are increasingly waiting closer to Christmas” in the expectation that the deals will be even better.
To get shoppers in a buying mood sooner rather than later, U.S. retailers are dangling Black Friday specials, from slow-cookers for $7.88 at J.C. Penney to $5 Barbies at Wal-Mart Stores Inc. Black Friday is so named because many retailers become profitable that day.
Analysts’ estimates for holiday sales vary from little changed to increases of as much as 4.5 percent. The 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.
These projections 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, the Commerce Department reported yesterday. 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.
“The mood of the consumer’s slightly better,” J.C. Penney Chief Executive Officer Myron Ullman said in an interview. “They feel more like they’re going to have a Christmas” after denying themselves for the past couple of years, he said.
Biggest Shopping Day
Black Friday was the largest shopping day last year with $18 billion in sales, according to MasterCard Spending Pulse, which is based in Purchase, New York. The number may rise this year because 31 percent of consumers plan to hit the stores that day, up from 26 percent a year ago, according to the shopping centers group.
As in years past, retailers are proffering so-called doorbusters -- a limited supply of discounted merchandise aimed at luring shoppers and getting them to buy higher-priced or less-discounted items.
J.C. Penney will offer its most deals ever with more than 300 doorbusters, including diamond-accented earrings slashed 80 percent to $10 and lambskin leather coats cut 73 percent to $80.
Toys and electronics often serve as doorbusters. Besides $5 Barbies, Wal-Mart, the world’s largest retailer, is offering Nintendo Co.’s handheld DS Lite for 30 percent off at $89. Best Buy Co., the largest electronics chain in the world, will sell a 55-inch flat-screen television from Samsung Electronics Co. for $1,500, a 40 percent savings.
Many retailers are also starting Black Friday earlier to boost sales, led by Sears Holdings Corp., which will open its namesake stores at 7 a.m. on Thanksgiving. Toys ‘R’ Us Inc. plans to begin at 10 p.m. that day, followed by Wal-Mart at midnight. J.C. Penney and Target Corp. will hold off until 4 a.m. on Friday, followed by Best Buy at 5 a.m.
While Black Friday is “an important barometer for how the season will go,” said UBS Securities analyst Meyer, she expects a shopping lull after the Thanksgiving weekend as consumers wait for retailers to slash prices. Then there will be a last-minute rush just before Christmas, she said.
Sara Paul, a 38-year-old hairdresser from Brooklyn, New York, said she won’t be joining the Black Friday shopping throngs this year. Instead she plans to wait until December when she will head to the outlet malls in Pennsylvania.
“I’m going to spend the same” as last year, she said.