NEW YORK (Reuters) - Eager shoppers stormed malls and stores across the country on Friday to snap up the early-bird specials that mark “Black Friday,” the first official day of the U.S. holiday shopping season.
While shoppers were looking for giveaways and discounts, investors were watching for signs of consumer strength or weakness.
Most retailers and analysts have expressed cautious outlooks for this holiday season, as consumers pull back amid a slumping U.S. housing market, a credit crunch, and rising food and fuel costs.
“Retailers knew they had to offer promotions enticing enough to get shoppers out of bed on a chilly day — and they delivered,” said Tracy Mullin, chief executive of the National Retail Federation, a trade group said on Friday. “Though retailers are anticipating a challenging holiday season, they are encouraged by the enthusiasm that their Black Friday sales generated.”
NRF in September forecast holiday retail sales during November and December would rise 4 percent, the slowest rate since 2002, when sales rose 1.3 percent, and below the 10-year holiday sales average of a 4.8 percent increase.
Macy’s Inc Chief Executive Terry Lundgren told Reuters that the line surrounding its flagship Herald Square store in midtown Manhattan was so long he decided to open the doors at 5:30 a.m. EST, 30 minutes earlier than planned. About 3,000 customers then rushed inside, he said, up from last year, when 2,500 shoppers entered at 6:00 a.m.
Customers came for the promotions, such as a $250 Martha Stewart Christmas tree on sale for $99.99 but stayed to buy full-price items such as Coach boots, Michael Kors handbags and Donald Trump ties, Lundgren said, fueling his optimism about the upcoming weeks.
“If you do well on Black Friday, it’s a good indication that you’ve got the right items and the right marketing to attract the customer for the rest of the season,” he said.
Many other retailers such as Wal-Mart Stores Inc, Best Buy Co Inc, J.C. Penney Co Inc and Kohl’s Corp used so-called “doorbuster” deals and extended hours to lure Black Friday crowds.
Even Apple Inc, which doesn’t usually mark down its goods, jumped in, offering up to $101 off MacBook and iMac computers, and up to $31 off classic iPods.
With the bargains came the crowds.
Craig Johnson, president of consumer and retail consulting firm Customer Growth Partners, said that in Connecticut there were about 700 people lined up at a Best Buy store at 4:45 a.m., 420 people at a Circuit City, and 540 at a Wal-Mart.
At that Wal-Mart, in Norwalk, Johnson said there were 21 registers open with at least 10 people waiting at each, plus four registers in the electronics area, each with at least 20 people. The parking lot was past full and spilled into neighboring lots, he added.
At a Best Buy in Geneva, Illinois, west of Chicago, Adam Wishne, a 19-year-old student from Geneva, headed a line of about 150 people, having pitched a tent at 10 a.m. CST on Thursday.
Like others in line, Wishne and his friends were looking to buy high-definition televisions and laptop computers. Best Buy had a limited number of Sony laptops for $399 and Toshiba notebooks for $229.
“Despite the tent, we’ve been freezing almost the whole time,” Wishne said. “But it was worth it for the great deals we got ... These will make for excellent presents.”
At more upscale locales, such as the Mall at Short Hills in New Jersey, where many stores did not run big sales, business was normal.
At the Glendale Galleria mall near Los Angeles, jewelry shops including Whitehall Jewelers were practically deserted, with few shoppers at upscale boutiques such as L’Occitane en Provence and Williams-Sonoma.
Stores such as AnnTaylor and Talbots Inc’s J. Jill that advertised 15 to 25 percent off of their clothes for mature women had shoppers, but crowds were subdued.
“People are breaking down the doors for the promotions, which is typical; but the stores catering to luxury are not going to go out of their way with the promotions right now,” said Michael Unger, director of the consumer product and retail practice of Archstone Consulting. He said upscale stores such as Jimmy Choo and Gucci were quiet, but stores catering to teenage girls, such as Guess Inc, Urban Outfitter Inc and Forever 21 were crowded.
“If you’re going to shop for the holidays, you might as well shop at 50 percent off today,” said Anabelle Frausto, a 22-year-old college student shopping at a Los Angeles-area Aeropostale Inc, where everything was half off.
“Twenty percent off is not worth it — they’ll be having that for the rest of the year,” she said.
Scott Bernhardt, chief operating officer of weather tracker Planalytics, said Friday morning was “significantly” colder than the year-ago day after Thanksgiving and than earlier this week in areas such as Boston, Chicago and New York.
“The economy is going to determine whether people spend $100 or $125, but the weather’s going to determine whether they buy the coats and hats,” Bernhardt said. “There are going to be a lot more — I mean a lot more — inclined for the coats, hats, scarves and sweaters.”
But Black Friday is always a popular day to buy toys, and this year was no different.
Braving the cold, crowds lined up outside Toys “R” Us in New York’s Times Square, anxious for deals such as 50 percent off Star Wars Transformers and Dora’s Magical Castle and Castle accessories from 5:00 a.m. EST to noon.
Toys “R” Us Chief Executive Jerry Storch said the line was the longest that store executives had seen on a Black Friday, except for the year that the Nintendo Wii went on sale.
FAO Schwarz Chief Executive Ed Schmults said store traffic and sales on Thursday and Friday led him to be “cautiously optimistic that we’re going to have a very solid holiday.”
On Thursday, the fourth Thanksgiving in a row that the store has been open, traffic doubled and sales rose 33 percent.
“Black Friday” once marked the day many retailers turned a profit, or went into the black, for the year.
It used to be the busiest shopping day of the year until procrastinators and others looking for last-minute gifts shifted that distinction to the Saturday before Christmas.
The Thanksgiving weekend can make up as much as 10 percent of all holiday sales, according to retail analyst Dana Telsey of Telsey Advisory Group, while the 10 days before Christmas can account for 40 percent of the total, she said.
Thanksgiving fell on November 22 this year, meaning there will be 32 days between Thanksgiving and Christmas and five full shopping weekends.
Additional reporting by Justin Grant, Aarthi Sivaraman, Nick Zieminski, Franklin Paul and John Parry in New York; Nick Carey in Chicago; Rachelle Younglai and John Crawley in Washington D.C. and Alexandria Sage in Los Angeles. Editing by Carol Bishopric