Weekend no turkey, sales figures show

As U.S. holiday shopping season gets under way, most reports find spending higher compared with last year

November 28, 2005|By ANDREA K. WALKER | ANDREA K. WALKER,SUN REPORTER

A weekend full of bargains and promotions seems to have paid off for retailers, with several early surveys showing the holiday shopping season getting off to a promising start - though some experts said stores must offer more discounts to keep consumers buying.

Reports released yesterday found that U.S. retail sales increased over the holiday weekend compared with a year ago. Visa USA, for example, said purchases by people using its cards at more than 6 million retail merchants jumped 11 percent from last year, to $3.7 billion for Friday and Saturday. And Wal-Mart, the world's largest retailer, reported that it saw a record 10 million shoppers before noon Friday and that sales "exceeded plans."

"This is the most promotional I've seen retailers in the last decade," said Britt Beemer of America's Research Group, which tracks shopping patterns. "I think that what they've learned is that if you have deals, you get shoppers. You have no deals and you don't get any shoppers."

At least one retail tracking group says consumers stayed home despite the deals. ShopperTrak RCT Corp., a Chicago firm that follows patterns, found that sales on "Black Friday" were nearly flat at $8 billion, or 0.9 percent lower than last year. The group said consumers were in no rush to buy early because this year's shopping season is longer than last, and many buyers expect the discounting to continue.

Discounts on items such as computers, televisions and digital cameras brought out heavy crowds before dawn on Black Friday, so named because it's traditionally when stores enter the profitable "black" period. A steady flow of shoppers continued in stores throughout the weekend.

Online shopping also is expected to have a strong showing today. Known as "Cyber Monday," it typically is the strongest online shopping day of the holiday season. About 59 million consumers are expected to shop online today, according to Shop.org, many at work where they have faster connections and downtime during lunch.

The holiday shopping season is critical to the retail industry because it typically accounts for one-fifth of yearly sales. The weekend after Thanksgiving is traditionally the kickoff to the shopping season, although it is not as significant as it once was. The Saturday before Christmas has been the largest shopping day the past few years.

This weekend's shopping patterns have some retailers feeling more optimistic than a month ago, when high gas prices and the impact of hurricanes Katrina and Rita seemed to have dampened shoppers' moods.

As gas prices began to fall this month and shopper morale seemed to improve, the National Retail Federation raised its holiday outlook for the first time in its history to 6 percent over last year, up from 5 percent, after seeing a leap in consumer spending. Year-over-year retail sales jumped 7.2 percent in September and October.

The retail group said yesterday that more than 145 million shoppers flooded stores and logged onto the Internet this weekend. The group estimated that total weekend spending was up nearly 22 percent to $27.8 billion, compared with $22.8 billion last year.

"Many of the sales were so good that consumers ended up spending extra money buying nongifts for themselves and their family," said Ellen Tolley Davis, a spokeswoman for the retail trade group. "People may have bought things to stockpile in their attic until they needed a birthday gift, while others thought that for $5 they might as well replace that coffee maker they've had for 15 years."

Ricky Wormley, 40, of Woodlawn was one of those shoppers who ventured out Friday morning to shop for himself and secure the deals. He and his wife were at Wal-Mart in Ellicott City looking for items to decorate the new house they just bought. He had two shopping carts filled with appliances, including a toaster, a TV and a tool set, and several two-pack board games, such as Candy Land and Sorry, for $10. He shopped Saturday as well.

"I'll probably try to get it done early this year," he said yesterday. "I'm concerned there won't be enough merchandise to go around if I don't."

Michael Niemira, a consultant for ShopperTrak said that the firm's flat showing doesn't necessarily mean it was a bad day for retailers because it's being compared with 2004, when sales were unusually strong. There is also a lot of time left in the season, said Niemira, also a chief economist and director of research for the International Council of Shopping Centers, in a statement.

"With the extra Saturday this season, added to the continued influence of high energy prices, the consumer may just be waiting until later to begin their holiday spending," said Niemira.

Beemer said that although shoppers crowded stores for the early-bird specials Friday, traffic slowed significantly the remainder of the weekend.

"I think it's shaping up to be a very typical 3 to 4 percent holiday shopping season," Beemer said.

Many analysts expect shopping to slow down the second and third weeks of December and surge in the days before Christmas when procrastinators, and those holding out for the best bargains, hit the stores.

"It's very normal after a crazy shopping weekend like this to see sales drop off for a week or two," said Davis of the retail trade group. "That will not be an indicator of any kind of sluggishness. That's just consumer behavior. Retailers will be trying very hard for the next few weeks to get people back into the stores."

andrea.walker@baltsun.com

Sun reporter Hanah Cho contributed to this article.

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