High discounts attract heavy holiday shopping in US despite economic gloom
01 Dec 2008
Fears that the all-pervading economic gloom would extend to the winter holiday season in the US have proved to be unfounded as shoppers, lured by discounts of as much as 70 per cent, came out in greater numbers than expected and spent more this holiday weekend than even last year. However, these figures may not be a true indicator of future sales or current profits.
The bargains that drove shoppers to stores were so stunning, analysts said that retailers - already suffering from double-digit sales declines the last two months - would probably see their profits erode even further. A more comprehensive picture is expected on Thursday, when national chain stores are scheduled to report November sales, which should offer more insight into how the holiday season is going.
The weekend after Thanksgiving is the traditional start of the holiday shopping season and a crucial barometer of consumers' mindset. Retailers have been struggling to entice shoppers into their stores in recent months as the economic crisis has intensified and were counting on a solid showing this weekend to build momentum for Christmas.
Their first glimpse came from two industry surveys released on Sunday. ShopperTrak, which does research for retailers, said sales increased 3 per cent on Friday, compared with last year. The National Retail Federation said 172 million shoppers went to stores and Web sites, a 17 per cent increase from a year ago and more than a forecast of 128 million. They spent an average of $372.57, up 7.2 per cent from last year, according to an e-mailed survey conducted for the NRF by BIGresearch, a Worthington, Ohio-based polling firm.
Even with the cheery news from industry groups, many retailing professionals worry the shorter holiday shopping season, on top of an ailing economy, will hurt sales through Christmas. There are 27 shopping days between Thanksgiving and Christmas this year; there were 32 last year. Also potentially troubling for retailers is that consumers say they are further along in their holiday shopping - on average, 39.3 per cent done versus 36.4 per cent a year ago.
The shopping marathon is expected to continue today - dubbed Cyber Monday - as consumers return to work and make online purchases at their desks. Research firm ComScore reported online sales on Thanksgiving Day and Black Friday grew 2 per cent from last year to $822 million. However, sales this holiday season are down 4 per cent from last year, the group said.
