More Shoppers Hit Stores, but Spend Less Each

Many more shoppers turned out for the traditional start of the Christmas shopping season over Thanksgiving weekend than a year ago, but they spent less each and favored lower-priced items.
That's a mixed bag for the beleaguered retail industry, which hopes that tight inventory combined with targeted bargains will ring up better results than last year's gloomy holiday season.
Roughly 195 million consumers shopped in stores and online over the Black Friday weekend, up from 172 million last year, according to the National Retail Federation. But average spending dropped to $343.31 per person from $372.57 a year ago.
Overall sales for the four-day weekend totaled $41.2 billion, up marginally from $41 billion last year, the NRF estimated. The trade group bases its figures on a survey, conducted Thursday through Saturday, of roughly 5,000 consumers and includes a projection for Sunday.
"The appetite among consumers this year seems to trend toward the lower-price items, the items they could literally afford with the money they already have in their wallet," said Ellen Davis, vice president of the Washington-based retail group, which has predicted a 1% decrease in November and December sales this year over last.
The holiday season—when many retailers make the bulk of their sales and profits for the year—is being closely watched by economists and others as an indicator of whether consumers are still deeply worried about the economy and unemployment, and are hampered by tight credit. After a disastrous season last year, retailers have ratcheted down sales expectations while slimming their stocks and filling the shelves with cheaper goods.
Retailers were nervous about taking a big gamble on higher-priced toys such as the popular $80 Mattel Inc. Mindflex game, despite early buzz from technology Web sites. The game is sold out almost everywhere and is selling for two to three times its original price on the online auction site of eBay Inc. That means retailers left money on the table.
Other in-demand items over the weekend included the Zhu Zhu pet hamster and electronic-reading devices, such as the new Nook from Barnes and Noble Inc. Both were offered in limited quantities. That, combined with lean inventories even for staples such as jeans, disappointed some shoppers who waited in predawn lines outside stores Friday.
Lauren Franklin, a 24-year-old customer service representative who visited New York City from Pittsburgh, woke up early Friday in search of size 8 or 10 jeans at Old Navy, the bargain brand of Gap Inc., on 34th Street in Manhattan. But by the time she got into the store, around 4 a.m., "they were gone," she said.
Yet consumers bought more discretionary items than last year, with nearly one-third purchasing toys, up 13% from last year, according to the National Retail Federation. Other categories that were hard-hit in the recession showed signs of life, with shoppers showing more interest in sporting goods, beauty items and gift cards this year than last, the trade group said.
Shoppers' greater-than-expected turnout over Black Friday weekend pushed up analysts' estimates for November sales, which will be reported Thursday. Thomson Reuters, which surveys analysts, now predicts an increase of 2.5% in November over the same month last year, up from a previous estimate of 1.8%.
November sales were likely boosted by a spate of pre-Black Friday deals. Spending on Black Friday itself rose 0.5%, or $54 million, to $10.7 billion this year from last, according to ShopperTrak RCT Corp. Last year, sales rose 3% from Black Friday of 2007. The firm compiles shopping traffic at malls and uses sales statistics, as well as Commerce Department figures, for its estimate.
Online shopping got off to a strong start over the holiday weekend. ComScore Inc. reported that online shoppers rang up $595 million in sales on Friday, up 11% from last year. Web shopping rose 10% on Thanksgiving day to $318 million. ComScore surveys a panel of about two million Internet users globally.
Coremetrics Inc., a Web analytics company that tracks shopper behavior on the sites of more than 500 U.S. brands, said that online consumers continued to buy more on Saturday—and spend 29% more per order—compared to a year earlier.
But sales on Black Friday weekend, which includes the Friday, Saturday and Sunday after Thanksgiving, haven't been an accurate barometer for the Christmas season as a whole. Last year, Black Friday weekend sales fell 1% from the prior-year period, but sales for the season were down 6.3%, according to MasterCard Inc.'s SpendingPulse unit, which tracks sales in all payment forms.
Even so, Thanksgiving weekend is crucial for retailers because it affords them the chance to lure shoppers into spending early. With great uncertainty surrounding consumers' willingness to buy this year, retailers are even more eager to lock up their portion.
On Friday, Jane Anne Jarka and her family hit a Garland, Texas, Wal-Mart Stores Inc. location for a laptop and a Kohl's Corp. store for towels, pillows and a comforter. They stuck to buying only the sharply discounted door-buster items she had carefully cut out from circulars and affixed to index cards. Ms. Jarka said she won't go shopping again for two weeks, when "the stores will have big sales again."
Anecdotal evidence suggests that many shoppers are sticking to budgets and lists. To entice shoppers off of their plan for the remainder of the holiday, retailers are armed with promotions. But unlike last year, when a sharp drop in consumer spending forced stores to offer deep discounts early in the season, this year's markdowns have been planned, and worked out with suppliers, in order to maintain profitability.
Last year, bargain hunters who waited till closer to the holiday were rewarded with some of the deepest discounts because retailers needed to clear excess inventory. That is less likely to happen this year, said Laura Gurksi, a partner in the retail practice at management consultancy A.T. Kearney.
Stores have already planned promotions on items that are not highly sought after, such as apparel. But the best deals for hot items, such as flat-screen TVs, have likely passed. "You've seen the bottom of that price because they're going to run out of them," said Ms. Gurski.
But some shoppers who had girded for slim stocks were pleased to find what they wanted. Sandy Latka-Ortiz rose early Friday to snag a Sony camcorder at a Best Buy Inc. store in Schaumburg, Ill. "I'm very happy that they have the amount that they have, because according to the paper it's two per color per store," said Ms. Latka-Ortiz, a 50-year-old airline employee, pointing to the fine print in her dog-eared circular.
Consumer electronics, which has traditionally been a strong category, appeared to be an early winner. Top-selling items on Wal-Mart's Web site on Black Friday included two flat-screen TV models, from Sony and Sanyo, as well as a Kodak digital camera and the Sony PlayStation 3 game console, the retailer said.
The best sellers on Walmart.com for Thanksgiving Day included the Bissell Steam Mop Hard Floor Cleaner, another sign that shoppers are seeking practical items this holiday season.
Taubman Centers Inc. said stores located in the 24 shopping centers it owns or manages around the country reported sales that were flat or slightly up Saturday on average.
"I'm not hearing a lot of name-brand hot sellers, but rather hot categories such as apparel," said Taubman spokeswoman Karen MacDonald.