Bargain-hungry consumers went on a spending spree over the post-Thanksgiving weekend, sparking hope of a better-than-expected holiday season for retailers.
But stores will need to keep promoting heavily to meet - if not beat - last year's holiday sales, retail experts said.
After several months of slow consumer spending, retailers slashed prices after Thanksgiving by up to 80 percent, and shoppers responded, jamming malls and shopping centers.
"This is one of the best years we've ever had," said Cindy Winningham, manager of Bead Wear, a jewelry kiosk at Towson Town Center. She said that sales had started to pick up early last month.
Britt Beemer, chairman of America's Research Group, which tracks consumer trends, said retailers will need to rely on big discounts to boost holiday sales over last year's figures.
"It may hurt their profits slightly, but the alternative is worse," Beemer said. "If you don't do much business and have good margins, you're dead anyway. Retailers are somewhat in a Catch-22."
On Friday and Saturday, shoppers spent $12.6 billion - an increase of 12.3 percent and 9 percent, respectively, over the two days after Thanksgiving last year, according to Chicago-based consultant ShopperTrak RCT. Sales growth was twice as strong as the year-to-date pace of 5 percent.
By comparison, last year's sales on Black Friday - which came 10 weeks after the Sept. 11 attacks - grew only 2.7 percent over 2000.
"There were lots of bargains and lots of spending at these bargain prices, and all that is good news for the beginning of the season," Michael Niemira, a vice president of Bank of Tokyo-Mitsubishi, said yesterday. "The question is, does that momentum carry you through?"
The coming week and weekend - typically one of the slower periods of the season - could be a good indicator, he said.
The brisk pace of shopping over the weekend showed that consumers can be enticed to spend, experts said.
Wal-Mart Stores Inc. reported record single-day sales Friday of $1.43 billion, driven by home electronics, small appliances and toys. Last year, consumers spent $1.25 billion at Wal-Mart on the day after Thanksgiving.
J.C. Penney Co. Inc. also reported record post-Thanksgiving sales this year.
At the Sharper Image in Towson Town Center, weekend sales rose 40 percent over a year ago.
"We did pretty awesome," said store manager Lori Klinger, who said she expects sales to increase in the two weeks before Christmas. "Advertising is bringing in a lot of people, and it's working."
Black Friday sales at Gloria Jean's Coffees rose about 20 percent over last year, said shop owner Janet Radcliffe.
An early Hanukkah, which began at sundown Friday, and the fewest possible shopping days between Thanksgiving and Christmas contributed to this year's strong start, said Tracy Mullin, president of the National Retail Federation, which is projecting a 4 percent increase in holiday sales.
"The people who were planning to shop this weekend did shop in big numbers," said Beemer, the retail consultant. "This weekend was an incredible shopping time - much more than I thought it would be."
But he and others warned that the strong start doesn't mean spending won't fizzle out.
At a time when consumers have been concerned about the economy, a potential war with Iraq and terrorism, retailers need to give people a reason to come to their stores - whether through promotions or marketing, they said.
"The reality is none of those concerns has disappeared," Niemira said.
In addition, Americans say they plan to spend less on gifts than they did last year, a national consumer survey shows. On average, Americans say they will spend about $788, a drop from last year's estimated average of $845, according to the telephone poll conducted Nov. 4-Nov. 11 by Maritz Research, based in Fenton, Mo.
The fewer shopping days could present another challenge to retailers.
"When you get to this time of season, and you've lost an entire weekend, that's when its tough," Beemer said. "This year we started out with a bang, but there have been a number of years when we started out that way. By now, about a third of America is completed with Christmas shopping."
More than three-quarters of consumers were out shopping over the weekend, according to a National Retail Federation survey. Forty-one percent of consumers purchased books, compact discs, DVDs, videos and video games, according to the NRF's 2002 Holiday Consumer Intentions and Actions Survey. The other top gifts were apparel and accessories (40 percent), toys (34 percent) and home merchandise (23 percent).
At the FYE music and video store in Towson Town Center, DVD and CD sales were strong throughout the weekend.
"This year's sales beat last year's," said store manager Robin Bowers.
Not all retailers benefited from the brisk business.
At the mall's Lego kiosk, sales dipped 15 percent to 20 percent.
"It was slower than last year," said Marc Nelson Jr., a sales associate, who noted that shoppers bypassed his kiosk for the sales at Hecht's and Nordstrom department stores.
Kristin Crighton, associate manager of Global Cellular, a phone accessory kiosk, also said sales fell slightly from the same weekend last year - with more shoppers looking than buying.
"Saturday and Sunday were like regular weekend days in terms of foot traffic," Crighton said. "People just wanted to get in and out on Black Friday."
But stores will need to keep promoting heavily to meet - if not beat - last year's holiday sales, retail experts said.
After several months of slow consumer spending, retailers slashed prices after Thanksgiving by up to 80 percent, and shoppers responded, jamming malls and shopping centers.
"This is one of the best years we've ever had," said Cindy Winningham, manager of Bead Wear, a jewelry kiosk at Towson Town Center. She said that sales had started to pick up early last month.
Britt Beemer, chairman of America's Research Group, which tracks consumer trends, said retailers will need to rely on big discounts to boost holiday sales over last year's figures.
"It may hurt their profits slightly, but the alternative is worse," Beemer said. "If you don't do much business and have good margins, you're dead anyway. Retailers are somewhat in a Catch-22."
On Friday and Saturday, shoppers spent $12.6 billion - an increase of 12.3 percent and 9 percent, respectively, over the two days after Thanksgiving last year, according to Chicago-based consultant ShopperTrak RCT. Sales growth was twice as strong as the year-to-date pace of 5 percent.
By comparison, last year's sales on Black Friday - which came 10 weeks after the Sept. 11 attacks - grew only 2.7 percent over 2000.
"There were lots of bargains and lots of spending at these bargain prices, and all that is good news for the beginning of the season," Michael Niemira, a vice president of Bank of Tokyo-Mitsubishi, said yesterday. "The question is, does that momentum carry you through?"
The coming week and weekend - typically one of the slower periods of the season - could be a good indicator, he said.
The brisk pace of shopping over the weekend showed that consumers can be enticed to spend, experts said.
Wal-Mart Stores Inc. reported record single-day sales Friday of $1.43 billion, driven by home electronics, small appliances and toys. Last year, consumers spent $1.25 billion at Wal-Mart on the day after Thanksgiving.
J.C. Penney Co. Inc. also reported record post-Thanksgiving sales this year.
At the Sharper Image in Towson Town Center, weekend sales rose 40 percent over a year ago.
"We did pretty awesome," said store manager Lori Klinger, who said she expects sales to increase in the two weeks before Christmas. "Advertising is bringing in a lot of people, and it's working."
Black Friday sales at Gloria Jean's Coffees rose about 20 percent over last year, said shop owner Janet Radcliffe.
An early Hanukkah, which began at sundown Friday, and the fewest possible shopping days between Thanksgiving and Christmas contributed to this year's strong start, said Tracy Mullin, president of the National Retail Federation, which is projecting a 4 percent increase in holiday sales.
"The people who were planning to shop this weekend did shop in big numbers," said Beemer, the retail consultant. "This weekend was an incredible shopping time - much more than I thought it would be."
But he and others warned that the strong start doesn't mean spending won't fizzle out.
At a time when consumers have been concerned about the economy, a potential war with Iraq and terrorism, retailers need to give people a reason to come to their stores - whether through promotions or marketing, they said.
"The reality is none of those concerns has disappeared," Niemira said.
In addition, Americans say they plan to spend less on gifts than they did last year, a national consumer survey shows. On average, Americans say they will spend about $788, a drop from last year's estimated average of $845, according to the telephone poll conducted Nov. 4-Nov. 11 by Maritz Research, based in Fenton, Mo.
The fewer shopping days could present another challenge to retailers.
"When you get to this time of season, and you've lost an entire weekend, that's when its tough," Beemer said. "This year we started out with a bang, but there have been a number of years when we started out that way. By now, about a third of America is completed with Christmas shopping."
More than three-quarters of consumers were out shopping over the weekend, according to a National Retail Federation survey. Forty-one percent of consumers purchased books, compact discs, DVDs, videos and video games, according to the NRF's 2002 Holiday Consumer Intentions and Actions Survey. The other top gifts were apparel and accessories (40 percent), toys (34 percent) and home merchandise (23 percent).
At the FYE music and video store in Towson Town Center, DVD and CD sales were strong throughout the weekend.
"This year's sales beat last year's," said store manager Robin Bowers.
Not all retailers benefited from the brisk business.
At the mall's Lego kiosk, sales dipped 15 percent to 20 percent.
"It was slower than last year," said Marc Nelson Jr., a sales associate, who noted that shoppers bypassed his kiosk for the sales at Hecht's and Nordstrom department stores.
Kristin Crighton, associate manager of Global Cellular, a phone accessory kiosk, also said sales fell slightly from the same weekend last year - with more shoppers looking than buying.
"Saturday and Sunday were like regular weekend days in terms of foot traffic," Crighton said. "People just wanted to get in and out on Black Friday."