U.S. consumers poured into the malls and took to the Web during Thanksgiving weekend, spending a record $52.4 billion at a pace that may be hard to sustain as the holiday shopping season gets under way.
Retail sales climbed 16 percent, and shoppers spent $398.62 on average, up from $365.34 a year earlier, the National Retail Federation said yesterday, citing a survey from BIGresearch. Web sales on Black Friday surged 26 percent to $816 million and 18 percent to $479 million on Thanksgiving Day, said ComScore, a Reston, Virginia-based research firm.
Shoppers took advantage of deals and earlier opening hours at retailers from Gap Inc. to Wal-Mart Stores Inc. to Toys “R” Us Inc. Apparel and electronic sales were particularly strong, said the Washington-based NRF. With the monthly U.S. unemployment rate averaging 9 percent this year, the results suggest consumers with jobs remain willing to spend.
“It’s a good, encouraging sign the consumer is out there despite all the distractions,” said Marshal Cohen, an analyst at NPD Group, a Port Washington, New York-based research firm. “We’ll have an OK holiday,” he said, adding a caveat that the strength of the Thanksgiving holiday may simply have pulled sales forward from December.
Retail stocks rose as the Standard & Poor’s 500 Retailing Index increased 3.5 percent to 517.97 at 10:03 a.m. in New York. Macy’s Inc., Amazon.com Inc. and Abercrombie & Fitch Co. led the gains by all advancing more than 4 percent.
Consumer spending, which accounts for about 70 percent of the economy, grew at a 2.3 percent annual rate in the third quarter, the fastest pace of 2011, the Commerce Department said Nov. 22. The nation’s savings rate fell, suggesting some consumers used their nest eggs to keep spending.
The U.S. unemployment rate likely held steady in November, matching the 9 percent average for all 2011, according to the median estimate of 55 economists in a Bloomberg News survey. The economy may have added 120,000 jobs this month, according to the average of 59 estimates. While that’s more than the 80,000 added in October, it’s less than this year’s 125,600 monthly average.
Today analysts will have another opportunity to assess consumers’ resilience when online merchants dangle deals in what has become known as Cyber Monday. On Dec. 1, retailers report same-store sales, a key indicator for retail growth because new and closed locations are excluded.
Black Friday arrived with consumer sentiment at levels previously reached during recessions, as a record share of households said this is a bad time to spend, according to the Bloomberg Consumer Comfort Index. The measure has reached minus 50 or less in nine of the past 10 weeks, an unprecedented performance in its 26-year history.
Brisk Black Friday sales may illustrate a gap between what consumers tell pollsters and how they actually behave -- a trend that has prevailed for much of this year, according to Ken Perkins, president of Retail Metrics, a Swampscott, Massachusetts-based research firm.
Industrywide monthly same-store sales have gained for more than two years and missed analysts’ projections once this year, according to Retail Metrics.
“A solid Black Friday suggests the rest of the season should be pretty good,” Perkins said. “Those who have jobs have been willing to spend.”
The NRF didn’t raise its estimate for holiday spending: a 2.8 percent increase in sales, or about half of last year’s 5.2 percent gain. A strong Black Friday doesn’t guarantee a better holiday season said NRF spokeswoman Kathy Grannis. In 2008, Black Friday also hit a record while overall holiday sales dropped 4 percent, she said.
While some shoppers said they planned to cut back this holiday season, others said they would spend more because their financial prospects have improved.
One was Pam Jones, a 51-year-old mother of two from Columbus, Ohio, who got a job at a medical billing office this year and said she planned to spend $1,200 this holiday season, or about twice as much as usual.
Jones was shopping on Nov. 26 for clothes for her 13-year-old son at an Abercrombie & Fitch store in Dublin, Ohio. The New Albany, Ohio-based teen-oriented chain was offering 40 percent off the entire store. Jones purchased jeans and t-shirts emblazoned with the Abercrombie & Fitch logo.
“My son is getting into name-brand fashions now so we want to get those for him,” Jones said. “The stuff is expensive, though, so I came out for the sales.”
Doubling Holiday Purchases
Kristen Gartland said she’s nearly doubling her Christmas shopping budget to $350 this year. On Black Friday the 20-year-old waitress filled a cart with oven mitts, stockings and toys for her seven younger siblings at a Target Corp. store in Huber Heights, Ohio.
Gartland said she’s positive about her finances because she’s making decent money working at a sports bar.
“It’s a good job to have,” she said.
Shoppers such as Stacey Carfi planned to buy for themselves. The 32-year-old controller visiting Washington from Charleston, South Carolina, paid full price for two pairs of pants -- one for herself -- at Lululemon Athletica Inc., the Vancouver-based purveyor of yoga gear. She planned to buy herself shoes this holiday, too.
“It is the season for buying, so why not get in on that?” Carfi said.
A record 226 million people went shopping during the Thanksgiving weekend, compared with 212 million last year, the NRF said.
OK To Spend
“There seems to be a bit of an exhale happening” with U.S. consumers, Ellen Davis, NRF vice president, said on a conference call yesterday. “They feel like it’s OK to spend a little bit more.”
People shopped in fewer destinations and they spent more money -- indicating they weren’t only buying merchandise advertised in circulars, she said. Department stores were a favorite destination, as they have been all year.
Macy’s Chief Executive Officer Terry Lundgren said he was struck by how many people in their 20s descended on the Cincinnati-based chain’s flagship store in Manhattan on Black Friday.
“It was almost a continuation of whatever social experience they were having hours before,” he said.
Strong online sales demonstrated that consumers are increasingly comfortable shopping on the Web, said Jennifer Davis, an analyst at Lazard Capital Markets in New York.
“We can definitely expect Cyber Monday sales to be stronger than ever,” she said.