U.S. holiday weekend sales surge, Best Buy a winner

NEW YORK Mon Nov 28, 2011 6:06am EST

Shoppers carry a television through a Best Buy store on the shopping day dubbed ''Black Friday'' in Framingham, Massachusetts November 25, 2011. REUTERS/Adam Hunger

Shoppers carry a television through a Best Buy store on the shopping day dubbed ''Black Friday'' in Framingham, Massachusetts November 25, 2011.

Credit: Reuters/Adam Hunger

NEW YORK (Reuters) - U.S. retailers racked up a record $52.4 billion in sales over the Thanksgiving weekend, a 16.4 percent jump from a year ago, as early hours and attractive promotions brought out more shoppers, an industry trade group said on Sunday.

Among the early winners after the traditional start of the holiday shopping season was Best Buy Co Inc (BBY.N), a reversal from 2010 when the electronics retailer's erroneous bet on 3D televisions led to a disappointing season.

Best Buy drew in shoppers by being one of the companies that opened its stores at midnight Thanksgiving night, and unlike in 2010, it focused more on having lower prices for big TVs and other popular items.

"Last year, they weren't as responsive with their pricing as they needed to be. We are seeing a different set of behaviours from them this time around," said Lawrence Creatura, a portfolio manager at Federated Clover Investment Advisors.

Overall, a record 226 million shoppers visited stores or online shopping sites from Thursday through Sunday, up from 212 million last year, according to a survey from retail industry trade group the National Retail Federation. The survey was conducted by online research firm BIGresearch. .

The number of shoppers and the amount of spending surprised analysts who had expected sales to be tempered by a 9 percent unemployment rate, high costs for gasoline and concerns about fiscal uncertainty in Europe.

But it is not at all certain that retailers will be able to keep the momentum going for the rest of the season.

"One swallow does not a holiday season make. After the deepest recession in decades, the solid Black Friday weekend is welcome news, but we're only in the second quarter of a long playoff game," said Craig Johnson, president of consulting firm Customer Growth Partners.

The holiday shopping season that traditionally kicks off on Black Friday -- the biggest day of the year for retailers -- is closely watched by investors as consumer spending accounts for about 70 percent of the U.S. economy.

The National Retail Federation forecast a 2.8 percent increase in sales for the November-to-December holiday season, down from the 5.2 percent increase in the same period last year.

Many retailers opened at midnight or earlier on Thanksgiving, pulling in younger people who were willing to stay up late for deals on electronics and toys instead of getting up before dawn on Friday.

"Consumers have finite cash. If you can be the retailer who gets that cash first, you are likely to be more successful in the holiday selling season," Creatura said.

MACY'S, WAL-MART SCORE

Aside from Best Buy, analysts and investors also named Macy's Inc (M.N) and Wal-Mart Stores Inc (WMT.N) among those that were strong starters.

"Best Buy's success is partially due to locking in compelling exclusive deals, better than Amazon's (AMZN.O), and having unique in-store-only offers forcing the visit," Credit Suisse analyst Gary Balter said.

Lee Johnson, 46, shopping at a mall in El Segundo, California, bought a computer at Best Buy on Sunday.

He said online shopping is usually a better idea, but he needed the computer for an employee who is starting tomorrow.

"I just didn't have time."

Fifty million Americans visited online retail sites on Black Friday, representing an increase of 35 percent from a year ago, and online retail sales in the United States on Black Friday jumped 26 percent this year, comScore data showed.

Each of the top five retail websites saw double-digit gains in visitors versus last year, led by Amazon.com. Wal-Mart ranked second, followed by Best Buy, Target (TGT.N) and Apple (AAPL.O), comScore said.

"Amazon.com once again led the pack, with 50 percent more visitors than any other retailer, while also showing the highest growth rate versus last year," comScore Chairman Gian Fulgoni said.

Amazon has used "every method at hand, old and new to promote their business this holiday season so far," WSL Strategic Retail CEO Wendy Liebmann said, referring to the online chain's promotions in print, online and circulars.

About 122.9 million Americans plan to shop on Cyber Monday this year, up from the 106.9 million who shopped on Cyber Monday in 2010, NRF Vice President Ellen Davis said on Sunday, citing a survey conducted by BIGresearch.

Retailers that opened late or held the line on promotions failed to impress.

"Office supply seemed among the least busy as they opened later and had fewer high-profile deals than in years past," Balter said.

Retailers Gap Inc (GPS.N) and Sears (SHLD.O) also "need to step up," Customer Growth Partners' Johnson said, adding that he worries the two chains may be too late already as the "horse is out of the barn."

"We would be most cautious on Sears due to their cash flow and serious appliance competition," Balter said. (Reporting by Dhanya Skariachan in NEW YORK, Alistair Barr in SAN FRANCISCO and Lisa Baertlein in LOS ANGELES; Editing by Brad Dorfman, Maureen Bavdek, Diane Craft and Vinu Pilakkott)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (2)
JenniferWelch wrote:
I wonder how many people, given these hard economic times, how many of the shoppers could really afford the money they spent on black friday and cyber monday, even with the great deals. If the number is tallying as much as it is reported to, it would seem to me that a lot of people have spent once again too much. I don’t mean to be so negative, its just that when you hear about the weak job growth, the majority of jobs being in lower income brackets, i.e. retail or seasonal work, or better paying job sectors that require people to go back to school for more specialization, when they can’t afford to, people having to work 2-3 jobs to get by, or just many many people out of work, the growing homeless population of families, or just families who are struggling in any way financially, that seems like it would make up much of people in this country. If it is to be believed that people went out and spent this amount of money collectively, is it not to be believed that we have not learned our lesson yet, to spend within our means. I hate to sound so critical of others……but this financial problem within this country was a long time coming —- it has nothing to do with either party or the president, its about ordinary people spending more than they have, and it snowballing in to other areas of economic life. Ask any economist. Its become a habit and it seems to be one we are having a hard time breaking, even when the consequences are hitting home and staring us in the face. I know its nice to provide a wonderful Christmas for your family, and I’m not criticizing that, but I wonder, shouldn’t people reign in their spending? People can give wonderful Christmases without going all out. I don’t know, I don’t have all the answers, I just see what I see, and I seem to see that we haven’t learned out lesson yet. …..but in full disclosure, I don’t make a lot of money, in fact I don’t make any, I am disabled and unemployed so I am not trying to criticize anyone any way that I wouldn’t criticize or act on myself— if I had money — nor am I trying to say that all you who have money are not doing what is is right. I don’t think of myself as better than you. It is nice to have nice things though, goodness knows there are thing I’d like to have. I see the people running through the doors of shops on black friday, and it looks senseless to me….. things are not that important, how many will get caught up in the rush and spend too much? It seems like far too many if this article is right…..which it probably is. That is the thing to me that will keep us in this recession….. not whatever is going on in Washington or the Eurozone, not new taxes or tax cuts or cuts to entitlements — things cannot be changed within policy and be effective if the ordinary person still goes and undoes it with spending to much, it will be like a dog chasing its tail. The average person spending beyond their means is collectively how we got into this mess. That is how the economies of the US and the Eurozone became so weak, people going in to debt. Now the problem has snowballed up the ladder to corporations that hire, suddenly don’t have revenue because no one buys once they get into deep debt, so they can’t hire and maybe have to lay off workers. Also to the government, because they have to deal with the mess we made. And we are still creating it —-then we wonder why the president and all the politicians haven’t dug us out from under yet. Well, its a little bit hard to if we keep piling on. Sure the spike in sales on black friday and cyber monday, and up until Christmas is a boost for the economy, but its only temporary. Once people start paying off Christmas debt, the economy will go sluggish again when people have no money to buy anything. So is the spike really worth it?

Nov 28, 2011 1:06pm EST  --  Report as abuse
touch128 wrote:
Yes BBY was a big winner. There stock has been way under value for a long time. Last quarter will be big. I say $ 45.00 by end of March.

Nov 29, 2011 2:03am EST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.