Childs Walker, The Baltimore Sun
7:01 PM EST, November 27, 2011
Shoppers packed stores and spent money in record numbers on Black Friday, early surveys show, a phenomenon that analysts call a hopeful sign for the U.S economy after months of up-and-down consumer spending.
Black Friday sales were up 6.6 percent over last year and foot traffic in stores was up 5.1 percent, according to ShopperTrak, a Chicago-based research firm. The year-to-year spending increase was the greatest since 2007, the firm reported.
"The numbers were pretty robust," said ShopperTrak founder Bill Martin.
A survey commissioned by the National Retail Federation found that 226 million shoppers visited stores and websites over the weekend, up from 212 million last year. They spent an average of $398.62, up from $365.34 in 2010, the survey found.
Federation President Matthew Shay called the numbers a "promising sign for the economic recovery."
Online sales were also up, 39 percent on Thanksgiving and 24 percent on Friday, according to IBM's Coremetrics analysis.
The Black Friday spending increases were driven in part by a wave of national retailers that opened for business on Thanksgiving night rather than Friday morning.
"You're talking about five or six extra hours of shopping, so it would have to have driven a lot of the increase," said Steve Coulombe, a senior managing director at FTI Consulting, a Chicago-based business advisory firm.
FTI projected 3 percent sales growth for the entire holiday season. Coulombe said he wanted to see Monday's numbers covering the entire weekend before revisiting the projection but said Black Friday was promising.
"It indicates that there's demand, which is what people worry about with overall consumer confidence being where it is," he said. "People will take some comfort."
Though malls and major retailers in the Baltimore area did not have weekend sales numbers as of Sunday, managers said anecdotal evidence corroborated the reports of a strong Black Friday.
"We had 30 stores open at midnight, and pretty much all of them were ecstatic that they did it," said Jessica Benson, associate marketing manager for White Marsh Mall. "They all saw lines of 50-100 people at midnight, and there was steady traffic all night long."
Benson said that when she arrived at 2 a.m. Friday, the mall felt as lively as it would on a Saturday evening in the weeks before Christmas. The parking lot was filled to capacity at 4 a.m. "We take it as a pretty good indication that the holiday season is off to a good start," she said.
Not all analysts are convinced that the weekend numbers portend a strong holiday sales season.
"In the past, it was pretty standard that if you had a good Black Friday, you would have a good holiday season," said Wendy Moe, a marketing professor at the University of Maryland's Robert H. Smith School of Business. "But now, people are really planning for Black Friday, and it's not clear whether they're going to continue buying after that or if they're done."
Martin said ShopperTrak's early numbers for Saturday and Sunday indicated a possible softening of sales. "We do have to remember that Black Friday is only a single day in the holiday season," he said. "We've seen it go both ways as an indicator for the season. There really is no historical trend that predicts what happens where that's concerned."
NPD Group, a New York-based consumer information service, said its online survey of 3,300 people found that 56 percent who shopped on Black Friday did not plan to shop again on Saturday or Sunday.
"While record numbers took advantage of the door-buster deals and the early-hour deals, it appears that is where most of the action was," said Marshal Cohen, chief industry analyst for NPD Group.
Retailers stirred excitement for Black Friday to an all-time high, Moe said, and many also pumped up revenues by opening for additional hours on Thanksgiving.
But she said reports of Black Friday numbers emphasize gross revenues without a sufficient focus on profits. Technology-savvy consumers are more adept than ever at finding the lowest prices, she said, and if retailers cut too much, it will not matter how many items they sell.
"Stores may be able to unload cheap product," she said. 'But are they making any money? If they're selling $50 video games for $20 and keeping the store open with a full staff for all of these extra hours, it's not clear to me that it's going to help with their bottom line."
Martin said there's little question that retailers use steep discounts to produce huge volumes of sales in the early hours of Black Friday (or on Thanksgiving night). Almost all the year-to-year sales growth occurs early in the day, he said.
But unlike Moe, he believes that the practice must be profitable. "Our view is that if it wasn't working, they wouldn't do it," he said. "And what we're really seeing this year is more of the same, with the early hours and the 50 and 60 percent discounts."
Matt Dawson, sales manager at the Best Buy in Towson, said he didn't know what to expect from the store's first midnight opening on Black Friday. Planning for the day had commenced in March.
"It was just a mass, a lot more people than I anticipated," he said, estimating that more than 1,000 customers waited in line when the store opened.
Dawson said stores have to emphasize Black Friday or risk being left behind by competitors.
"There is definitely this aura around it," he said. "It definitely sets the tone for the whole holiday season. Based on what I saw, I'm expecting strong sales the rest of the way."
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