Retail Season Starts Stingily

More Holiday Shoppers Hit Stores, But Average Spending Is Down

November 30, 2009|By Hanah Cho | Hanah Cho,Hanah.cho@baltsun.com

Door-buster deals and steep discounts on small appliances and toys lured more shoppers to malls and big-box stores during the Thanksgiving weekend but consumers spent less on average this year, providing retailers a somewhat encouraging but still mixed picture for the rest of the holiday season.

Shoppers in Maryland and across the country spent $41.2 billion over the weekend, slightly higher than last year, according to figures released Sunday by the National Retail Federation. But the average consumer spent $343.31 - a 7.8 percent decline from $372.57 last year, the trade group said.

Still, retailers reported some positive signs that people were willing to open their wallets for bargains, based on early surveys.

Online sales on Friday rose 11 percent compared to the same period last year, making it the second-heaviest online spending day in 2009, according to preliminary figures released by comScore Inc. The retail federation expects 96.5 million people to shop today on so-called Cyber Monday, up from 85 million in 2008.

Large crowds hit stores and shopped online over the weekend - about 195 million shoppers, up from 172 million last year, according to the retail federation.

But retail experts say stores must continue to entice shoppers with low prices to keep them coming back through December as consumers remain wary about spending while unemployment rises.

Chicago-based ShopperTrak RCT said sales increased 0.5 percent to $10.66 billion on the day after Thanksgiving, nicknamed Black Friday because it was traditionally when retailers posted their first profit of the year.

"What we saw this weekend was a good Black Friday," said David Herskovits, a partner at Deloitte & Touche, which does retail consulting. "But that said, people went out and went shopping as we expected them to do.

"The question is how much will they spend in the aggregate when they're all done," Herskovits added, noting there are plenty of shopping days left.

Anna Rita Hydock, an office clerk from Pasadena, continued shopping Sunday at the Mall in Columbia after venturing out to numerous outlets and discount stores on Friday and Saturday.

Hydock said she braved the crowds and frenzy surrounding Black Friday for the first time to stick to a budget and snatch deals on clothes, video games and other holiday gifts.

"Last year, I just spent," said Hydock, who was taking a lunch break with her shopping companions -- daughter-in-law, Lisa Hydock, and friend, Christine Wright. "This year, I'm watching my spending."

The Thanksgiving weekend is no longer the bellwether for the season that it once was. Last year, retailers reported a robust Black Friday, only to be left with disappointing sales at the end of the holiday season.

The retail federation said Sunday it is maintaining its projection of a 1 percent sales decrease, the second-weakest holiday season since the group began tracking sales more than 40 years ago. Last year was the only other time the group has reported a spending decline: Sales dropped 3.4 percent in November and December.

Scott Krugman, a spokesman for the retail federation, said the lower average spending wasn't a surprise because retailers slashed prices on big-ticket items, such as big-screen televisions, and small appliances like toasters and crock pots, which were priced below $5 in some cases.

"All the retailers are competing in terms of value and price," he said, pointing to price wars among retailers in recent weeks.

Herskovits, the Deloitte & Touche analyst, said he expects retailers to continue their promotions through December.

"Even though retailers are being careful about inventory, they need to get customers into the stores," he said. "There is plenty of competition out there."

Several retailers, such as Sears, began offering Black Friday-like specials on Halloween, while others opened on Thanksgiving to draw bargain shoppers. To grab the door-buster deals, about 31 percent of shoppers surveyed by the National Retail Federation were at stores by 5 a.m. Friday, compared with 23.3 percent last year.

Annie Wildasin, a marketing manager at the Mall in Columbia, said retailers reported stronger traffic and sales Friday and Saturday compared to a year ago, setting a positive tone for the rest of the season.

"People were walking out with big shopping bags," Wildasin said. "People seem ready to shop this year."

Columbia's J.C. Penney manager Ken Hornbostel said sales on Friday were in line with expectations with brisk sales of home merchandise products, smaller appliances and sweaters.

"It was just as busy on Saturday. We were very pleased with that," he said.

While signs are encouraging, Hornbostel said it's hard to predict the rest of the shopping season because consumers "are very cautious.

"But I think they are seeking the best value for their dollar," he said.

Audra Cox, 35, of Ellicott City, said she's sticking to a budget, since she is buying gifts for nine nieces and nephews as well as other family members.

"We try to be reasonable every year," said Cox, as she browsed through children's clothes at J.C. Penney.

After crowds packed the Mall in Columbia on Friday and Saturday, the shopping center resembled a more typical weekend, drawing families and leisurely shoppers on Sunday. Parking was reasonable, and there were plenty of seats at the food court around lunchtime.

Tammie Williams, of Laurel, said she stopped by J.C. Penney on Sunday to avoid the chaos of Black Friday. In fact, Williams said she began her holiday shopping in July.

"I don't spend a lot around the holiday. I try not to focus on the gift-giving," she said.

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