Black Friday Sales Rise 0.5% as Crowds Shop for TVs, Computers

Black Friday Sales Rise 0.5% as Crowds Shop for TVs, Computers


Nov. 29 (Bloomberg) -- Black Friday sales advanced 0.5 percent from a year earlier as discounts on televisions, toys and computers drew budget-conscious crowds across the U.S., according to ShopperTrak RCT Corp.

Sales for the day after the Thanksgiving holiday rose to $10.7 billion, the Chicago-based research firm said yesterday in a statement. That compared with a 3 percent gain to $10.6 billion on Black Friday last year, a “surprisingly strong” result before economic turmoil dragged down sales for the rest of the holiday season, ShopperTrak said.

Wal-Mart Stores Inc., the world’s largest retailer, attracted consumers with $298 Hewlett-Packard laptop computers and other specials that went on sale at 5 a.m. Best Buy Inc., the biggest electronics chain, used $547.99 42-inch Samsung flat-panel TVs to lure shoppers grappling with the highest unemployment in 26 years. The retailer had bigger early-morning crowds than last year, Chief Executive Officer Brian Dunn said.

“The surprise news is that they are actually buying for themselves as well, due to pent-up demand and frugal fatigue,” Marshal Cohen, chief industry analyst with NPD Group Inc. said in a Bloomberg Television interview Nov. 27. “They are saying ‘Let’s loosen up the purse strings a little bit,’ but it is still cautious spending.” NPD, based in Port Washington, New York, is a market research firm.

Holiday Shopping Prediction

The National Retail Federation, an industry trade group, said on Nov. 27 that retailers reported “strong” shopper traffic this year. High-definition TVs, laptops, Zhu Zhu Pets robotic hamsters and winter coats were among the most popular items, according to the Washington-based federation.

The day after U.S. Thanksgiving is known as Black Friday, the traditional beginning of holiday buying. Explanations of the phrase’s origins differ, one holding that it’s the weekend when retailers go to being in the black, profitable for the year. Stores open early on Black Friday and offer early-bird discounts to attract business.

A 4.9 percent sales decrease in the northeast countered gains in other regions, according to ShopperTrak. Consumer traffic was heavy throughout the country, the research firm, which plans to release store-visit figures in the next few days.

“We’ve seen a gradual retail sales increase over the last two weeks and with Black Friday’s performance, it looks like November will be a positive month for retailers,” Bill Martin, a ShopperTrak co-founder, said in the statement. “The 1.6 percent increase we originally predicted for the holiday season remains intact.”

Retailers’ chief marketing officers predicted Black Friday sales would climb an average 1.8 percent from a year ago at their own stores, according to a survey conducted by BDO Seidman LLP in October. Ninety-six of 100 executives said they would increase promotions this year, offering the biggest discounts on consumer electronics.

Discounts on TVs

“Retailers in all sectors have reported strong crowds,” according to an NRF statement Nov. 27.

Walmart fell 33 cents to $54.63 on Nov. 27 in New York Stock Exchange composite trading. Richfield, Minnesota-based Best Buy lost 43 cents to $42.83.

There seemed to be more discounts on TVs this year, and shoppers were snapping them up, said Charles O’Shea, a New York- based retail analyst with Moody’s Investors Service. In the four hours he spent checking retailers in northern New Jersey, he saw several shoppers standing at bus stops holding flat-panel sets.

“It looks like everybody has caught the promotional bug,” O’Shea said in a telephone interview Nov. 27.

The lines in front of Best Buy stores were longer and the company’s Web site attracted more visitors than in 2008, Best Buy’s Dunn said.

“Those are both directionally important indicators for us,” he said in a Bloomberg Television interview.

‘Best Deal’

Samir Patel arrived at noon on Thanksgiving Day with his brother and cousin to claim the No. 1 spot in line at Best Buy in Jersey City, New Jersey. The 26-year-old, who has been unemployed since he graduated with a master’s degree in May, was waiting to buy a Sony Vaio laptop for $399.99 when the store opened at 5:30 a.m. the next day.

“It’s the best deal for a laptop this year,” he said. “There’s a minimum of 10 in the store.”

Liberty Media Corp.’s QVC shopping channel said it had more than $32 million in sales Nov. 27, its best-ever Black Friday, and a 60 percent increase from last year. The previous record was $22.3 million in November 2006, said Doug Rose, vice president of programming and marketing at QVC.

Holiday sales make up a third or more of retailers’ annual profit. The International Council of Shopping Centers, a trade group, predicted sales at stores open at least a year will advance 1 percent in November and December after a year-earlier 5.8 percent decline, the worst in 40 years.

‘More Traffic’

“There’s a little more traffic than last year across the board, maybe 10 percent,” Bill Taubman, chief operating officer of Taubman Centers Inc., a U.S. real estate investment trust with 24 malls, said in a telephone interview Nov. 27.

Walmart, based in Bentonville, Arkansas, kept stores open all night so shoppers could grab items when they went on sale at 5 a.m. The world’s largest retailer cut some toy prices to $5.

Toys “R” Us, based in Wayne, New Jersey, had an average of 1,000 people outside its stores before they opened at midnight, five hours earlier than last year, said Chairman and CEO Jerry Storch. The chains sold a “significant number” of Apple Inc. iPods and tens of thousands of Zhu Zhu Pets robot hamsters, he said.

“The last thing parents will cut back on is toys for their kids,” Storch said in a telephone interview Nov. 27.

J.C. Penney, Macy’s

Black Friday shopping at J.C. Penney Co. stores was strong throughout the U.S., the Plano, Texas-based retailer said in an e-mailed statement yesterday.

J.C. Penney, which plans to report November sales on Dec. 3, fell $1.07 to $29.57 on Nov. 27 on the New York Stock Exchange.

At the Macy’s Inc. store in New York’s Herald Square, shopper traffic appeared greater than a year ago, and continued to flow in after the initial rush, Macy’s Chairman and CEO Terry Lundgren said. Housewares and jewelry were selling “briskly,” he said.

“Last year we were just getting rid of the inventory we bought six months before,” Lundgren said. “This year we’ve had a year to think through what is the sales trend.”

Macy’s, based in Cincinnati, dropped 59 cents to $16.97 on Nov. 27 on the New York Stock Exchange.

Promotions are shaping up to be less haphazard than last year when conditions were “downright dysfunctional” after the financial crisis forced retailers to clear out goods, Richard Hastings, a Charlotte, North Carolina-based consumer strategist for Global Hunter Securities LLC, said Nov. 27 in an e-mail.

After this weekend, sales may slip into a lull until mid- December when retailers push out more discounts, Hastings said.

“The season has a long way to go,” Hastings said.

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