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Holiday Sales Sag Despite Blitz of Deals
« on: December 02, 2013, 09:38:09 AM »

Mon, Dec 2, 2013, 9:36 AM EST -

Holiday Sales Sag Despite Blitz of Deals
The Wall Street Journal
By Shelly Banjo 6 hours ago

Retail spending over Thanksgiving weekend dropped for the first time in at least seven years, the industry's main trade group said, as the blitz of deals and earlier opening hours apparently failed to pry more dollars out of the hands of budget-conscious shoppers.

Retailers such as Wal-Mart Stores Inc. and Macy's Inc. kicked off sales earlier on Thanksgiving Day, aggressively touted discounts all week and offered many of the same discounts online as in stores in an effort to keep ahead of rivals. But preliminary sales estimates based on surveys of shoppers suggest the tactics may be reaching a point of diminishing returns.

Sales spiked on Thanksgiving Day and online, but at the expense of business on Black Friday itself, according to the early data. Estimated total spending over Thanksgiving weekend fell to $57.4 billion, down 2.7% from a year ago, according to the National Retail Federation. It said it still expects total holiday sales through year-end to rise by 3.9% from a year ago.

The estimates underscore how retailing has become largely a zero-sum game amid slow overall growth in consumer spending. Some retailers have warned that their margins will suffer as they use promotions to get reluctant consumers to spend more.

The weekend spending declines, which aren't adjusted for inflation, came despite higher online sales and more traffic into stores.

On Thanksgiving Day, 45 million people went shopping, up 27% from last year, but traffic on Friday increased only 3.5% to 92 million, the retail group said. It attributed the sales decline to earlier promotions that pulled sales forward, deep discounts that pushed down prices, and consumers that continue to be strained by a gloomy economic environment.

Executives from Walt Disney Co.'s Disney Store and Wal-Mart noted heavier crowds Thursday night and thinner traffic early Friday morning, formerly a peak period for discount-seeking crowds.

"Consumers are stressed. They're still under a lot of pressure from things like high unemployment," said GameStop Corp. Chief Executive Paul Raines. "We see that in our business."

Mr. Raines said the stress was most visible in the program that allows customers to trade in old electronics and games for new ones. More customers traded in old games this Black Friday weekend than last year, he said. "I saw one customer on Black Friday who brought in 11 games and an iPad so she could buy a new Samsung Galaxy Tab," he said.

Although gasoline prices have fallen and stock and home values are rising, many shoppers still feel pinched.

"It's really rough right now," said Stacey Welch of Plainfield, N.J., who was at Toys "R" Us in Manhattan on Thursday night. The mother of two expects to spend one-third less this year than last because the bakery she owns is drawing less traffic. "I'm earning less," she said.

Some higher-end retailers are seeing penny pinching, too. "Shoppers are very price-driven right now," said Richard Baker, chief executive of Hudson's Bay Co., which owns Saks and Lord & Taylor.

REUTERS In the wake of Thanksgiving dinner, shoppers ventured out Thursday and Friday across the U.S. to fight the lines at stores and load up on discounted gear and gifts. Pedestrians at a street corner in New York City on Friday morning carried a variety of bags hinting at their morning stops.

Retailers felt pressure to begin sales earlier this year because of a quirk of the calendar that left fewer shopping days between Thanksgiving and Christmas—and to win back business from online rivals.

Market researcher ShopperTrak estimated that sales grew by 2.3% over a portion of the long weekend—Thursday and Friday—a small increase that it said was more pronounced on Thanksgiving Day. Black Friday lost out, with traffic dropping 11% and sales down 13%, ShopperTrak said.

Estimates for holiday spending often differ, in part because forecasters use different methodologies. ShopperTrak counts foot traffic using cameras installed in 60,000 stores and blends it with government and retailer data to make its forecast. The widely watched National Retail Federation's Black Friday results are based on a third-party survey of 4,464 consumers on Friday and Saturday.

More consumers decided to bypass stores altogether. Online shopping over the Black Friday weekend accounted for 44% of the weekend's sales, up from 41% last year and 23% in 2006, according to the retail-trade group.

Online sales rose 21% to $766 million on Thanksgiving Day, and 15% to $1.2 billion on Black Friday, according to data from comScore Inc. For the whole month of November, e-commerce spending rose 3% from a year earlier to $20.6 billion, comScore said.

Dave Volpe, a 24-year-old graphic designer from Baltimore, shopped on Black Friday without making a trip to the mall. Mr. Volpe bought an Xbox 360 from Best Buy Co.'s website on Thursday because the price was the same in store and on the web.

"Why wait in line when I can get it for the same price?" he said. "Online is just so much easier."

Jay Henderson, strategy director of IBM Smarter Commerce, said more retailers offered online "Black Friday" deals in the days and weeks before Thanksgiving, which may have suppressed some demand over the past several days.

EBags Inc., an online purveyor of luggage, purses and other bags and cases, found that to be true. "We had a hypothesis that sales this year would be stretched out over many days, rather than concentrated on Black Friday," said Peter Cobb, the company's senior vice president of marketing, who said that turned out to be the case. He said sales rose 41% on Thanksgiving Day and 22% on Black Friday.

Retailers now are focusing on getting Americans to keep shopping in the three weeks left before Christmas. In the same way Black Friday has grown into a multiday affair, retailers now are billing Cyber Monday as Cyber Week.

Wal-Mart this week plans to offer so-called Value of the Hour specials on items such as laptops and Dirt Devil Vacuum Cleaners. Merchants with its e-commerce unit were planning to work through Sunday night to incorporate data from the weekend shopping blitz into its online offers for the week, adjusting prices and changing deals displayed on its home page to reflect what customers are looking for.

"The effort now is to keep bringing people back throughout the season," said Chief Technology Officer Jeremy King on Sunday afternoon.

Shoppers this weekend said they were very aware of their budgets. The number of shoppers who said they bought gifts for themselves dropped from last year, and those who did spent less, the retail-trade group said. Others said they were limiting gift-giving to one family member or putting price caps on presents.

Melissa Ebbole, a teacher outside of Chicago, had a new tactic to limit her spending this year—using only cash.

"With a card it's easy to just keep swiping and swiping," said Ms. Ebbole, 33, who was browsing clothes at J.C. Penney at Stratford Square Mall in Bloomingdale, Ill. "But with cash, once it's gone, it's gone."

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Offline DCPatriot

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Re: Holiday Sales Sag Despite Blitz of Deals
« Reply #1 on: December 02, 2013, 09:42:19 AM »
The mainstream media has done a great job of concealing the economic predicament Americans have been facing for the past 5 years.

If there is an increase in holiday spending this year, it's obvious the numbers are bogus.

I so hate the liberal MSM!
"It aint what you don't know that kills you.  It's what you know that aint so!" ...Theodore Sturgeon

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"It's not the mountain before you, but the pebble in your shoe"      ....or something like that

Offline Atomic Cow

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Re: Holiday Sales Sag Despite Blitz of Deals
« Reply #2 on: December 02, 2013, 08:38:50 PM »
The headlines on Friday and Saturday is that there was "massive turnout and sales."

Then they sneak in the reality that sales declined.

Of course, I will do most of mine online, and already have most Christmas gifts purchased before this past weekend.
"...And these atomic bombs which science burst upon the world that night were strange, even to the men who used them."  H. G. Wells, The World Set Free, 1914

"The one pervading evil of democracy is the tyranny of the majority, or rather of that party, not always the majority, that succeeds, by force or fraud, in carrying elections." -Lord Acton

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