The lure of bargains trumped economic concerns at the start of the holiday shopping season
as retailers logged sales that were significantly stronger than a year ago, a customer traffic counter said.
Sales rose 8.3 percent on "Black Friday" -- the first official day of the U.S. holiday shopping season -- compared with the same day a year ago, according to the National Retail Sales Estimate from ShopperTrak.
Amy Sancetta
The company estimated sales Friday totaled $10.3 billion.
Black Friday sales typically account for between 4.5 and 5 percent of all holiday sales, ShopperTrak said.
The sales spike was evidence that customers are willing to spend despite mounting worries about a slumping housing market, a credit crunch and soaring fuel prices. Experts say those concerns still may dampen the season overall.
"Although retailers need to remain cautious, the Black Friday outpouring should have them breathing a sigh of relief, and they will be paying close attention to see if consumers
continue this strong shopping pace throughout the holiday season," said Bill Martin, ShopperTrak's co-founder.
Shoppers Flock to Discounters
One sign that consumers remain budget-conscious despite the buying frenzy this weekend is that discount stores were the choice of more Thanksgiving weekend shoppers this year than last, a survey released on Sunday showed.
Almost 65 percent of people who shopped on Friday said one of the places they shopped was at a discount store, according to the survey by America's Research Group, a consumer-behavior marketing firm. That compares with 55.7 percent in 2006, according to the group.
On the other end of the spending spectrum, jewelry stores were named by only 6.3 percent of the people who said they shopped on Friday, compared with 10 percent in 2006, Britt Beemer, founder and chairman of the group, said.
For the whole weekend, 31.4 percent of people said they did most of their shopping at discount stores, 20.8 percent said department stores and 16.7 percent said electronics stores.
In an apparent sign of desperation, the nation's stores ushered in the official start of the holiday shopping season on Friday with expanded hours, including midnight openings, and a blitz of early morning specials that were more generous than a year ago. J.C. Penney and Kohl's opened at 4 a.m., an hour earlier than a year ago.
The strategy appears to have worked, as shoppers jammed stores in record numbers for early morning deals on Friday.
Judging by the lines outside Sears stores Friday, consumers were especially eager, said John Ford, regional manager at Sears Holdings in New York.
"It exceeded our expectations. We had more customers at opening yesterday than we had in prior years," Ford said of the number of people waiting outside for the stores to open Friday. "I would tell you it was 50 to 100 percent higher than it was in previous years."
Ford declined to provide sales figures or to speculate on the shopping season in general.
"Strong Performance"
Penney reported "strong performance across all merchandise categories,' including fine jewelry, outerwear, and young men's and children's assortments.
But the department store chain cautioned, "while we are encouraged by our strong start, it is still early in the holiday season, and we are mindful of the headwinds consumers are facing."
Jim Mone
Shoppers look at home theater televisions at the Best Buy store Monday, Sept. 11, 2006 in Richfield, Minn. Best Buy Co. Inc., the nation's largest consumer electronics retailer, said its second-quarter earnings rose 22 percent on a 13 percent increase in revenue. The results beat Wall Street expectations, but Best Buy left its full-year guidance unchanged. (AP Photo/Jim Mone)
Penney, Wal-Mart Stores and other major retailers are expected to report same-store results for November on Dec. 6. Same-store sales are those at stores opened at least a year and are considered a key indicator of a retailer's strength.
Most retailers and analysts have expressed cautious outlooks for this holiday season, as consumers retreat in the face of a softening economy.
A drop in weekly mortgage applications, signs of stress in the labor market and crude oil prices flirting with $100 per barrel this week added to the uncertain outlook for retailers.
The Reuters/University of Michigan consumer confidence reading for November was 76.1, down from 80.9 in October. Apart from the short-lived dip in sentiment that followed Hurricane
Katrina in 2005, it was the weakest since 1992.
Another sign of consumers cutting back is the number who said they would spend $100 or more on something for themselves. The 30.2 percent who said "yes" was an all-time low and down from about 42 percent last year, Beemer said.
Some Still Wary
"That traffic was up doesn't surprise me," said Candace Corlett, a principal with consulting firm WSL Strategic Retail. "Is that going change the financial prediction? I don't think so."
Corlett said retailers did a good job accommodating crowds, beefing up staff to assist shoppers and posting company representatives in parking lots to help customers with credit card applications.
But the larger number of shoppers was not necessarily an indication of strong sales, she said. Bargain hunting is always popular pastime, perhaps even more so during economic uncertainty.
"It's become more of a shopping sport," Corlett said.
Many of the people who shopped this weekend got to stores early Friday, snatched up deeply discounted "door-buster" items and were done shopping by the middle of the day, Beemer said.
"What jumped out at me was how big Friday was and how weak Saturday and Sunday were," Beemer said in an interview with Reuters.
Almost a quarter of those who shopped on Friday said they completed at least 75 percent of their holiday shopping that day, a much higher figure than normal, Beemer said, adding that this response might also have something to do with the economy.
Black Friday also saw an increase in traffic to Internet retail sites like eBay and subsidiaries
Shopping.com and Paypal.
Shopping.com said Saturday its traffic to merchants increased 61 percent over last year's Black Friday.
An increase in online shopping has somewhat defused the seasonal predictions based on Black Friday turnout to stores. The convenience of online shopping has caused an increase in
shopping on Thanksgiving Day itself.
Shoppers are browsing and researching more Friday, but buying more on the Monday following Thanksgiving, or "Cyber Monday," eBay said in a statement.