NEW YORK (REUTERS) — Heavy promotions lured American consumers into stores this weekend, but retail analysts said a post-Thanksgiving boost might not be enough to salvage an already-frail holiday-shopping season.
Retailers put on their holiday best to nab consumers, from strategies like early store openings to scantily dressed greeters and huge discounts, to draw shoppers into stores.
The weekend after the U.S. Thanksgiving holiday — traditionally the start of the critical holiday-shopping season — draws shoppers in with widespread price cuts, and discount stores in particular were the most popular.
“Discount retailers were the early winners,” according to Scott Krugman, spokesman for the National Retail Federation. “The ‘doorbuster’ specials were effective in getting consumers out of the house early Friday morning and has kept them out ever since … the question is how well will things keep up during the rest of the holiday season?”
Sales pressure
Consumer spending is a closely watched barometer of overall economic health, because it accounts for roughly two-thirds of U.S. economic activity. Any signs of a slowdown raises concerns.
Same-store sales have been lackluster for many retailers over the past few months, and the holiday selling period is an important one — even more this year, after most merchants had a grim back-to-school sales season.
Now under the gun, retailers are using price cuts and promotions to grab consumer dollars.
“Foot traffic on Friday was extremely heavy, but consumers were looking at the price tag before looking at the product,” said Kurt Barnard, publisher of Barnard’s Retail Trend Report. “It was the depth of the discount that determined whether the product was going to be considered for purchase.”
U.S. retail sales Saturday rose 9 percent compared to the Saturday after Thanksgiving a year ago, according to ShopperTrak RCT’s National Retail Sales Estimate.
The two-day average pace was up 10.9 percent from the two days after Thanksgiving last year, according to ShopperTrak.
“The 2002 holiday season got off to a good start, which should lift retail-industry confidence,” said Michael Niemira, a consultant for the NRSE. “Most of the season is still ahead, and the industry will have its work cut out.”
Online shoppers spent about $150.9 million on Black Friday, 40 percent more than last year, not including travel websites, said online-sales-tracking firm ComScore Networks Inc. Top online sales in non-travel categories were computer hardware, consumer electronics and apparel and accessories.
Mall operator Taubman Centers Inc. — whose properties include The Mall at Short Hills in New Jersey, Beverly Center in Los Angeles and Cherry Creek in Denver — said many stores advertised weekend sales rather than just day-after-Thanksgiving promotions, which resulted in solid buying.
Ten out of 10 stores surveyed in its Dearborn, Michigan, mall met or exceeded sales estimates by the end of the day Saturday, Taubman said. Parking lots at its International Plaza in Tampa, Florida, remained more than 90 percent full until after 8 p.m. Saturday and were still 85 percent full an hour later.
In addition to dwindling stock portfolios, fears of layoffs and the possibility of a U.S.-led war with Iraq, this year’s calendar could also thwart retail sales. Thanksgiving falls six days later than in 2001, meaning fewer shopping days before Christmas.
On the bright side, Wal-Mart Stores Inc., the world’s largest retailer and often seen as an indicator of the health of the sector, said Saturday it rang up its highest single day of sales Friday.
Department stores, which have been struggling to compete with discounters in the slumping economy, also attracted shoppers over the busy weekend.
“The department stores looked good, the cosmetic counters and juniors departments were busy, and there was good foot traffic,” said Richard Hastings, a retail analyst with Cyber Business Credit.
Macy’s and Bloomingdale’s, units of Federated Department Stores were crowded, Hastings said, along with Dillard’s Inc. and Nordstrom Inc.
Inventory woes
Inventory could also be a concern for shoppers. Tight inventory has been one of the main strategies retailers and distributors have used to buoy profits at earnings time.
Ideally, the plan leaves retailers with less unpopular merchandise that will have to be deeply discounted at the end of the season but also leaves less merchandise for shoppers who wait until the last minute.
“We are seeing a holiday-shopping season heavily driven by the special attractions retailers are offering,” Barnard said. “It’s a shopper’s paradise; if you need anything, buy it now.”
