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Shoppers Jam Stores, Giving Cheer to Retailers

AP
Friday, 23 Nov 2007 | 12:50 PM ET

Shoppers -- shrugging off a spate of lead-tainted toy recalls and higher prices for food and gas -- jammed stores before dawn Friday to grab discounted TVs, toys and clothing for the official start of the holiday season, expected to be the weakest retail showing in five years.

David Kohl

Stores are counting on hordes of shoppers who have pulled back in recent months. Merchants need them to keep coming throughout the holiday season to make their sales goals.

Wal-Mart Stores, the world's largest retailer, threw open its doors at 5 a.m., offering such specials as a Polaroid 42-inch LCD HDTV for $798 and a $79.87 Sony digital camera. From 5 a.m. to noon, Toys "R" Us Inc. offered 101 early morning specials on such toys as Mattel Inc.'s Barbie styling set and Hasbro Inc.'s FurReal interactive jungle cat toy. That's four times the number it offered last year.

J.C. Penney, which opened at 4 a.m., an hour earlier than last year, served up such deals as a leather massage recliner for $298.88, after a $50 mail in rebate. The original price was $799. Other deals include 50 percent off toys and board games.

In a scene replayed again and again at stores nationwide, about 200 people stood in line outside a Targetin Columbia, S.C., at 5 a.m., an hour before the store was to open.

Tracy Jenkinson, 34, arrived just after 3 a.m. to take the first spot in line.

She planned to buy a $199, 19-inch LCD television for his daughters.

"It's kind of crazy if you're not here to get a particular thing," Jenkinson said

At a nearby Wal-Mart, Linda Ballew, 56, arrived at 4:30 a.m. to shop for her six grandchildren, and others.

She pushed and pulled two shopping carts containing 42-inch LCD television, 5 hand mixers for girlfriends and more than 50 DVDs, some for just $2, as stocking stuffers for the grandchildren.

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"It's just exciting, it's wonderful to get out because it just puts you in the Christmas spirit," said Ballew of her holiday tradition.

In Manhattan, Best Buydrew crowds for such early morning bargains as a Sony laptop computer for $399.99, reduced from $749.99, and a GPS device from TomTom, which was priced at $119.99, from $249.99.

Let the Buying Begin

"If they were selling it, we were buying it," Tom Shea, 23, said as he surveyed his purchases at a midtown Manhattan Best Buy store. He said he, some friends and a cousin were the first through the doors when the store opened at 4 a.m.

Shea, of Brooklyn, and two friends spent a total of about $2,500 on two laptop computers, an Xbox game console, a vacuum and several other items. They estimated they had saved about $1,500 -- after waiting for 35 hours outside the Fifth Avenue store to make sure they were first in line, he said.

Some shoppers from overseas were reveling in discounts made deeper by exchange rates.

Glenn Branney, of Belfast, Northern Ireland, had timed his visit to New York to coincide with the post-Thanksgiving shopping frenzy, known in retail circles as Black Friday. He spent Thursday relaxing, readying himself for Friday's consumer melee.

Arriving at the Apple Store on Fifth Avenue at 4:30 a.m., he bought an iPod Touch and an iPod Nano, both music and video players. Then he moved on to Macy's, where he had amassed a haul of coats, belts and wallets by 7 a.m.

"I've only just started," said Branney, 31, as he stood in a men's department peppered with sale signs and strewn with clothes scattered in the shopping scrum. He said he intended to spend a couple of thousand dollars, perhaps more.

"It's fantastic, really, really good," he said, adding, "and really cheap." His home currency, the British pound, rose to $2.0716 in morning European trading Friday, up from $2.0634 the day before.

Macy's spokesman Orlando Veras said at least 250,000 people were expected to visit the company's massive Herald Square store, the same number as last year. But Veras said there were early indications the store could surpass the 2006 tally.

Slim Pickings

Many prepared in advance to snap up their most coveted items, though some were not happy with what they found.

Amber Hanson, 23, of Madison, Wisc., and her mother, Heather Ludwig, 51, of Stoughton, Wisc., mapped out a game plan using ad fliers Thursday. Hanson went to bed at midnight and was up again at 2:30 a.m. to get to Kohl's 4 a.m. opening, where she bought sweaters and candles.

Ludwig said the best deal the store offered was $10 cash to spend on Saturday for every $50 spent on Black Friday, calling the lines "ridiculous," after an hour-and-a-half wait to check out.

Both mother and daughter, who hit other stores including Old Navy, said they weren't too impressed with the "deals."

"The stores are giving away a lot less free things," Ludwig said.

Recognizing a potentially tough shopping season ahead, stores began discounting weeks ago, with such gimmicks like expanded hours. While top luxury stores like Saks Fifth Avenue continue to do well, merchants that cater to middle and lower income shoppers have suffered as consumers struggle with higher gas and food prices as well as a slumping housing market.

There are no new, must-have holiday items like Apple's iPod, though certain products are doing well. At toy stores, Smart Cycle, fromMattel'sFisher-Price, and Jakks Pacific'sEyeClops, a handheld device that magnifies objects, are among the early hits, though sales have been stymied by concerns over Chinese-made toys. At clothing stores, dresses have been a strong seller, according to Dana Telsey, CEO of Telsey Advisory Group, an independent research firm.

In electronics, there are no new game consoles, though shortages of Nintendo's Wii, which made its debut a year ago, have kept shoppers alert to whatever has dribbled in.

Pam Batts, of Raleigh, N.C., arrived at a Target in suburban Knightdale at 3:30 a.m. Friday, ready to buy a Wii for her 8 year old son but left empty handed.

About 30 minutes before the doors opened, Target staff announced the store had been sold out of the consoles since Sunday.

"Now what do I do?" Batts asked. "I've got just a month to find one."

While Black Friday is expected by some analysts to be the busiest day of the season, it's not a predictor of how retailers will fare in the season overall. In fact, the weekend only accounts for about 10 percent of overall holiday sales. But it does set the tone since what consumers see that day influences where they will shop for the rest of the year.

C. Britt Beemer, chairman of America's Research Group, noted that if shoppers walk into a store on Black Friday and like what they see, they will more likely go back during the Christmas season.

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"This is their biggest chance to win at retail during Christmas season," Beemer said.

Last year, retailers had a good start during the Thanksgiving weekend, but many stores struggled in December and a shopping surge just before and after Christmas wasn't enough to make up for lost sales.

This year, analysts expect sales gains to be the weakest in five years. Washington-based National Retail Federation predicted that total holiday sales will be up 4 percent for the combined November and December period, the slowest growth since a 1.3 percent rise in 2002.

Holiday sales rose 4.6 percent in 2006 and growth has averaged 4.8 percent over the last decade.

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