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Retail Sales Down 11% as Black Friday Weekend Loses Allure
Sunday, November 30, 2014 02:02 PM
By: By ANNE D'INNOCENZIO
Black Friday fatigue is setting in.
Early discounting, more online shopping and a mixed economy meant fewer people shopped over Thanksgiving weekend, the National Retail Federation said Sunday.
Overall, 133.7 million people shopped in stores and online over the four-day weekend, down 5.2 percent from last year, according to a survey of 4,631 people conducted by Prosper Insights & Analytics for the trade group.
Total spending for the weekend is expected to fall 11 percent to $50.9 billion from an estimated $57.4 billion last year, the trade group estimated.
Part of the reason is that Target, J.C. Penney, Macy's, Wal-Mart and other major retailers pushed fat discounts as early as Halloween. Some opened stores even earlier on Thanksgiving. All that stole some thunder from Black Friday and the rest of the weekend.
Still, the preliminary data makes retailers worried that shoppers remain frugal despite improving employment and falling gas prices.
Matt Shay, the trade group's CEO, said he thinks people benefiting from the recovery may not feel the need to fight crowds to get the deepest discount on a TV or toaster. And those who feel like the recession never ended may not have the money and will stretch out what they spend through Christmas.
And shoppers are still feeling the effects of high food prices and stagnant wages.
"While they're more optimistic, they're very cautious," Shay said. "If the deals are not right for them, they're not going to spend."
Bottom line: Expect more deep discounts, all season long.
"Every day will be Black Friday. Every minute will be Cyber Monday," he said.
That could be what it takes to get shoppers to open their wallets for the holiday shopping season, which accounts for about 20 percent of annual retail sales.
Besides economic factors, people are becoming more discerning when they shop. Armed with smartphones and price-comparison apps, they know what's a good deal — and what's not.
Kimani Brown, 39, of New York City, was among the Black Friday defectors. After four years of braving the crowds, the sales failed to lure him out this year.
"I consider myself a smart shopper. And it's not as alluring as it used to be," Brown said. "It's a marketing tool, and I don't want to be pulled into it."
He also said the frenzy pushed him to overspend, and he paid the price in January on his credit card statement.
Instead, he said he will look online Monday, the online shopping day often called Cyber Monday.
Some who went shopping on Thanksgiving felt they were doing it against their will. Cathyliz Lopez of New York City said she felt forced to shop on the holiday.
"It's ruining the spirit of Thanksgiving," the 20-year-old said Thursday. "But I was checking all the ads, and the best deals were today."
The National Retail Federation is still predicting a 4.1 percent increase in sales for the season. That would be the highest increase since the 4.8 percent gain in 2011.
Some stores and malls had reason to be optimistic.
Dan Jasper, a spokesman at Mall of America in Bloomington, Minnesota, said customer counts are up 5 to 6 percent for the four-day weekend. One plus: Shoppers were buying more for themselves, a sign of optimism.
"They felt confident in the economy," he said.
CEOs at Target and Toys R Us said they saw shoppers not just focusing on the doorbuster deals but throwing extra items in their carts.
Macy's CEO Terry Lundgren told The Associated Press on Friday that he's hoping lower gas prices will help spending.
"There's reason to believe that confidence should continue to grow. That should be good for discretionary spending," he said.
Some of those discretionary dollars are migrating online.
Target said Thanksgiving saw a 40 percent surge in online sales and was its biggest online sales day ever. And Wal-Mart reported Thanksgiving was its second-highest online day ever, topped only by Cyber Monday last year.
From Nov. 1 through Friday, $22.7 billion has been spent online, a 15 percent increase from last year, according to research firm comScore. On Thanksgiving, online sales surged 32 percent, while Black Friday online sales jumped 26 percent.
In stores, shoppers spent $9.1 billion on Black Friday, according to research firm ShopperTrak, down 7 percent from last year. That was partly due to a 24 percent surge in Thanksgiving sales, to $3.2 billion.
ShopperTrak estimated that in-store sales for the two days combined slipped half a percent to $12.29 billion.
