Holiday Sales at U.S. Retailers Climbed 6.5% to $20 Billion

Holiday Sales at U.S. Retailers Climbed 6.5% to $20 Billion

By Joseph Galante

Nov. 29 (Bloomberg) -- Holiday spending at U.S. retailers climbed 6.5 percent to $20 billion over the Thanksgiving weekend as consumers sought half-off sales and early store openings.

Sales on the Sunday following Thanksgiving climbed 4.2 percent to $3.6 billion, ShopperTrak RCT Corp. said yesterday. Black Friday, the day after Thanksgiving, recorded an 8.3 percent increase to $10.3 billion, the Chicago-based research firm said.

More people visited stores than ShopperTrak forecast, and retailers' shares rose for the third time in four trading days. The Standard & Poor's 500 Retailing Index gained 4.6 percent yesterday, the most in four years.

``Consumers, when they have income, go out and spend,'' said Charles Lieberman, chief investment officer at Advisors Capital Management LLC in Paramus, New Jersey. ``Consumers have the income.''

Retailers' doors opened as early as 4 a.m. on the day after Thanksgiving, and they offered discounts through the weekend at their stores and on Web sites.

Wal-Mart Stores Inc., Target Corp. and Best Buy Co. slashed prices to attract holiday shoppers as rising fuel and food costs and the worst housing slump since at least 1991 discouraged purchases of high-priced goods. The National Retail Federation expects spending this holiday season to increase 4 percent, the slowest pace in five years.

Wal-Mart, based in Bentonville, Arkansas, rose $1.40, or 3.1 percent, to $47.23 yesterday in New York Stock Exchange composite trading. Minneapolis-based Target increased $2.58, or 4.5 percent, to $59.58, and Best Buy added 3 percent to $50.58.

Black Friday

Shopping on Black Friday makes up about 5 percent of total holiday sales, according to ShopperTrak and MasterCard Spending Pulse.

Bargains may lower retailers' profit margins, and consumers may take a break from shopping in coming weeks as they wait for a new round of discounts as Christmas approaches.

The Federal Reserve said yesterday that retailers were ``slightly pessimistic'' about year-end holiday sales. Most Fed banks reported in a regional business survey that retailers expect sales growth ``to be modest at best in the upcoming holiday season,'' the central bank said.

``We expect to see a bit of a spending lull over the next few weeks, followed by the traditional season-ending sales boost,'' Bill Martin, co-founder of ShopperTrak, said yesterday.

Companies count on November and December for about 20 percent of their profits.

Online Sales

ComScore Inc. said sales on retailers' Web sites rose 21 percent to $733 million on Nov. 26.

The Monday after Thanksgiving has been promoted as Cyber Monday since 2005 by the National Retail Federation in Washington because of a pattern of increased online shopping after the U.S. holiday weekend.

Online visits on Nov. 26 rose 10 percent from a year earlier to 32.5 million, Nielsen Online said this week. EBay Inc., the world's biggest online auction site, said its Shopping.com comparison site had a 28 percent increase in traffic on the Monday after Thanksgiving.

Spending through Web sites, which makes up more than 3 percent of all retail sales, may climb 20 percent to $29.5 billion in November and December, ComScore estimated. That's less than the 26 percent growth in online sales that occurred during the holidays in 2006.

BLOOMBERG