Shoppers cheer up retailers on Thanksgiving Day weekend

(RTTNews) - Despite an ailing economy and the market uncertainty, U.S. retailers are breathing a sigh of relief after shoppers headed to stores and websites over the Thanksgiving Day weekend and spent more than they did last year. According to the National Retail Federation's 2008 Black Friday Weekend survey conducted by BIGresearch, 17% more shoppers visited stores and websites over the weekend, with a 7.2% rise in their average spending. The survey also showed that Friday was the busiest day of the weekend with 73.6 million people shopping for doorbuster sales.

According to Tracy Mullin, President and Chief Executive Officer of the National Retail Federation, or NRF, pent-up demand on electronics and clothing and bargains on this season's hottest items helped to drive shopping all weekend. "Holiday sales are not expected to continue at this brisk pace, but it is encouraging that Americans seem excited to go shopping again," Mullin noted. Normally, the Thanksgiving Day weekend sales account for about 10% of the overall holiday sales.

During the weekend, more than 172 million shoppers visited stores and websites, compared with 147 million shoppers last year, the NRF said. The NRF was expecting up to 128 million people to shop this weekend. The NRF also said that 56.9 million people shopped on Saturday, up from 48.3 million last year, while another 26.2 million people planned to shop on Sunday. The number of people who shopped on the Thanksgiving Day was up 48% year-over-year.

The poll also showed that shoppers spent an average of $372.57 this weekend, up from the prior year's $347.55. Consumers' total spending was an estimated $41 billion in the weekend.

Citing the survey results, the NRF said that about 54.7% of the weekend's shoppers visited discount stores. While 43% shopped at traditional department stores, about 36% of the shoppers visited specialty stores like clothing or electronics stores and 34% shopped online. Among shopping goods, about 50.9% purchased clothing and accessories over the weekend while 39% bought books, DVDs, CDs and video games. While 35.9% purchased consumer electronics, 28.5% bought toys. However, against expectations, gift card purchasing dropped 10% this year, with only 18.7% of the shoppers purchasing a gift card over the weekend, compared with 21% last year.

"Though retailers should be encouraged by strong traffic and sales over the weekend, consumers are still being cautious," said Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch. "Weekend shoppers indicated that they are still sticking to a budget and thinking carefully before making any holiday purchases," Rist noted.

According to market research firm comScore, Inc., online sales were up 1% on Black Friday to $534 million. Including the Thanksgiving Day, web sales rose 2%, while the sales were down 2% in the first 28 days of November from a year ago, comScore said. As per data from eBay (EBAY | Quote | Chart | News | PowerRating) and Amazon.com (AMZN | Quote | Chart | News | PowerRating), top online selling items so far included Apple's (AAPL | Quote | Chart | News | PowerRating) iPod and iPhone and Nintendo's Wii game console.

Meanwhile, Chicago-based privately-held research firm ShopperTrak RCT said that sales rose 3% year-over-year on Black Friday, the traditional first day of the holiday shopping season. Retail traffic was heavy throughout the country as shoppers responded to early openings and numerous door buster specials and sales promotions. However, this year's sales growth was lower than the 8% increase seen for the same day last year, ShopperTrak noted. Regionally, the South lead the way with a 3.4% rise over 2007, with the Midwest up 3%, West up 2.7% and Northeast up 2.6%.

"While this is an encouraging start for retailers, there's no guarantee these deep discounts will continue after Black Friday weekend, which could slow spending," said Bill Martin, co-founder of privately-held ShopperTrak.

Meanwhile, certain reports suggested that deep discounts that enticed shoppers this weekend are likely to further erode the profits of stores, which are already suffering from double-digit sales declines for the past two months. Further, many retail experts are of the view that 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, whereas there were 32 days last year.

In addition, based on the BIGresearch poll for the NRF, on average, 39.3% of the total shoppers expected in the season have shopped thus far compared with 36.4% in the previous year. This would also be a potential trouble for retailers who are making earlier and deeper price cuts to attract Christmas shoppers.

At the same time, retailers' online sales are expected to surge on Monday, which is also known as Cyber Monday, as shoppers look for more discounts than they found during the holiday weekend. Cyber Monday, a term coined by the NRF's Shop.org division in 2005, began after online retailers noticed a trend of people shopping online on the Monday after Thanksgiving. The NRF's survey has indicated that the Cyber Monday sales will be more promotional than ever this year, with more than 80% of the online retailers offering special promotions.

Nonetheless, analysts and industry specials doubt whether the Black Friday sales signal a turnaround for beleaguered retailers. Many reportedly called it a one-time wonder, saying this season could be one of the bleakest holiday shopping seasons in decades.

"In the past, if you did well on Black Friday, the retailer knew they would do well the rest of the season. I don't think that is the same kind of comparison this year." the Los Angeles Times quoted Jackie Fernandez, a retail partner at Deloitte & Touche, as saying.

The NRF continues to project that total holiday sales will rise 2.2% this year to $470.4 billion. A clearer picture would be out as major retailers are expected to announce their November sales results on Thursday.

For comments and feedback: contact editorial@rttnews.com Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

More News:   Market Updates | Stock Alerts | All Trading News | Stock Index