Holiday Sales to Drop as Forecasters See 'Discipline'
by Lauren Coleman-Lochner
(Bloomberg) — More consumers went shopping over the Thanksgiving holiday weekend, yet spent less than last year as they hunted for bargains on toys and electronics, according to the National Retail Federation.
Spending at stores and on Web sites from Nov. 26 to Nov. 29 rose 0.5% to an estimated $41.2 billion from $41 billion a year earlier, the Washington-based trade group said Nov. 29, citing a survey conducted by polling firm BIGresearch. The higher turnout and lower average spending were in line with expectations, the NRF said. The group is sticking to a forecast for a 1% drop in spending this holiday season.
Price cuts on small appliances, toys, and winter clothes helped bring shoppers into chains including Macy's (M), J.C. Penney (JCP), and Wal-Mart Stores (WMT). On so-called Cyber Monday, 96.5 million people plan to shop on the Internet to take advantage of limited-time offers and free shipping, according to the NRF. That would be a 14% increase from 2008.
"There's still a lot of work to be done by the retailers," said Adrienne Tennant, a retail analyst at FBR Capital Markets (FBCM) in Arlington, Va. "Value is number one."
Thirteen percent more shoppers visited at least one department store this year, the NRF said. Internet spending on Black Friday, the day after Thanksgiving, rose 11% from a year ago, to $595 million, ComScore (SCOR), a Reston (Va.)-based research firm, said Sunday in a statement.
Target (TGT), the second-biggest U.S. discount chain after Bentonville (Ark.)-based Wal-Mart, for the first time this year advertised an online-only sale on Thanksgiving. J.C. Penney, the third-largest U.S. department-store company, started Cyber Monday specials a day earlier this year.
Amazon.com (AMZN), based in Seattle, is the largest online retailer and plans a series of "lightning deals" for limited time periods on Nov. 30.
The average shopper spent $343.31 in stores and online over the holiday weekend, less than $372.57 a year ago, the NRF said. The number of shoppers rose to 195 million from 172 million a year earlier, according to the NRF. The group is the world's largest trade association, according to its Web site.
"Shoppers proved this weekend that they were willing to open their wallets for a bargain," said Tracy Mullin, NRF's president and chief executive officer, in a statement. "While retailers are encouraged by the number of Americans who shopped over Black Friday weekend, they know they have their work cut out for them to keep people coming back through Christmas."
Average spending declined as prices for flat-screen televisions dropped and retailers offered a greater number of items at unprofitable prices to lure shoppers, Scott Krugman, a spokesman for the NRF, said on a Sunday conference call.
Vee Weaver, a certified nurse's aide from Atlanta, bought a set of knives, a red shirt, and a purse at Macy's and J.C. Penney after she was persuaded by a friend to shop on Black Friday.
"I have a job and I've saved all year," Weaver, 65, said at The Shops at Wiregrass, an outdoor shopping mall near Tampa, Fla.
The black leather purse she got was $14.97 marked down from $59.98. "I had to jump up and down and blink," she said.
On Black Friday, Richfield (Minn.)-based Best Buy (BBY), the biggest electronics chain, had bigger early-morning crowds and more online visitors than last year, said CEO Brian Dunn. "Those are both directionally important indicators for us," he said in a Nov. 27 Bloomberg Television interview. Best Buy rose 77¢, or 1.8%, to 43.60 at 10:18 a.m. in New York Stock Exchange composite trading.
Holiday sales make up a third or more of retailers' annual profit. The International Council of Shopping Centers, another industry trade group, predicted sales at stores open at least a year will advance 1% in November and December after a year-earlier 5.8% decline, the worst in 40 years.
Wal-Mart, the world's largest retailer, attracted consumers with $298 Hewlett-Packard (HPQ) laptop computers and other specials that went on sale at 5 a.m. the day after Thanksgiving. The stock declined 13¢ to 54.50 in New York Stock Exchange composite trading. Renee McDonald, 40, started waiting at 5 a.m. outside a Wal-Mart in Houston, hoping to purchase a television. When the store ran out, she bought a digital camera instead.
Black Friday shopping at J.C. Penney stores was strong throughout the U.S., the Plano (Tex.)-based retailer said in an e-mailed statement on Nov. 28. J.C. Penney and other retailers plan to report November sales on Dec. 3. The retailer fell 44¢ to 29.06 on the New York Stock Exchange.
At the Macy's in New York's Herald Square, shopper traffic appeared greater than a year ago, and continued to flow in after the initial rush, Chairman and CEO Terry Lundgren said. Jewelry and housewares were selling "briskly," he said. Macy's, based in Cincinnati, dropped 44¢ to 16.53 on the New York Stock Exchange.
"Last year we were just getting rid of the inventory we bought six months before," Lundgren said. "This year we've had a year to think through what is the sales trend."
To contact the reporter on this story: Lauren Coleman-Lochner in New York at email@example.com.