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US retailers launched their annual post-Thanksgiving sales push on Friday with an unprecedented salvo of aggressive price-cutting and early openings in an attempt to bolster sales in the face of higher energy bills and other economic uncertainties.
Some big stores, including Wal-Mart and JC Penney, opened their doors this year at 5am, an hour earlier than usual, at the start of the most important shopping season of the year, or Black Friday – the first day of the year on which retailers historically moved out of the red and into profit.
Tracy Mullin, president of the National Retail Federation, said she believed Friday was “one of the earliest and most promotional Black Fridays”. “Many stores opened earlier than ever before and retailers offered unbelievable sales and discounts to get people shopping.”
Paul Cohen, spokesman for Visa USA, said the price cutting seemed more aggressive than last year. “The retailers have gotten savvy. They know that consumers are looking for bargains, and they want them spending in the stores now, rather than hanging back and waiting for prices to fall later.”
In Howland Township, in northeast Ohio, scores of shoppers braved bitterly cold temperatures and overnight snow to line up in the dark outside their local Wal-Mart, seeking special early-bird bargains on goods including a 42-inch plasma flat screen TV for under $1,000.
A few miles away, the Target store at the Eastwood Mall in Niles was swamped by an early morning rush, with lines more than 30 deep waiting for its 18 cash registers at 7am. Best Buy, the electronics retailer, also drew large early crowds with limited time offers including a Toshiba laptop for $380, while Old Navy, Gap’s low cost brand, drew long lines with a holiday scratch card discount competition, and free breakfast snacks at the door.
Some analysts expressed worries that the cold weather in the north and east US might depress the weekend’s performance. Mark Rein, a retail consultant for Capgemini who was monitoring shoppers at the Mall of the America near Minneapolis, reported significantly smaller crowds than in previous years, despite lines at stores offering special holiday bargains.
Despite the retailers’ marketing emphasis on the weekend sales, the share of holiday shopping carried out over the weekend is gradually falling, analysts say, as consumers start holiday shopping before Thanksgiving. A strong holiday weekend performance can also lead to a larger than usual sag in sales in early December.
Last year, US consumers spent $22.8bn over the Thanksgiving weekend, accounting for just over 5 per cent of the total $414.7bn spent in the entire holiday season during November and December.
A strong start to the sales should help allay worries that higher energy costs would undermine consumer spending. The Fed said this week that the economy overall was strong and it raised concern about inflationary risks, but it also noted that consumer spending softened towards the end of the third quarter. Confidence has rebounded sharply since then, with data this week supporting the Fed’s view that sentiment would recover from the lows seen after September’s hurricanes.
Underpinning the optimism, Visa USA said its transactions at more than 6m retail outlets rose 9 per cent last week against the year before, and were 5 per cent up on the previous week. Visa USA’s online transactions on the Thursday Thanksgiving holiday also increased 28.3 per cent on the holiday last year, to $203m. “Clearly some folks were sneaking away from their family gatherings,” said Mr Cohen of the online sales. “I think we’ll see a rather good holiday season.”