U.S. Sales Rose 8.3% Day After Thanksgiving

U.S. consumers spent $10.3 billion on holiday purchases yesterday, an 8.3 percent increase from last year, after retailers promoted electronics and toys to woo shoppers.

Consumers remained resilient and proved they were willing to spend even with oil prices rising and other economic pressures, ShopperTrak RCT Corp. said today in a statement. The day after Thanksgiving, dubbed Black Friday, typically accounts for between 4.5 percent and 5 percent of all holiday sales, the company said.

Holiday sales will increase 3.6 percent this year, the Chicago-based research firm estimates, trailing a 4.8 percent gain last year. Retailers have responded to the anticipated drop by offering discounts on flat-panel TVs and diamond necklaces to lure shoppers.

It's an extraordinary number, beyond what we anticipated, Bill Martin, co-founder of ShopperTrak, said in an interview.

I think there was pent-up demand given the slow sales in October and November because of unseasonably warm weather, and people want to find value for their dollar and reacted to the specials.

ShopperTrak estimates customer visits to stores will drop 2.5 percent this holiday season, which covers the 32 days between Thanksgiving Day and Christmas.

Seeking Bargains

Sales in November and December may rise 4 percent, the slowest gain since 2002, according to the National Retail Federation in Washington. About 55 percent of shoppers said they will spend less this year than in 2006, according to a Discover Financial Services survey.

Consumers flocked to Toys R Us Inc., Wal-Mart Stores Inc., Macy's Inc. and other retailers in the pre-dawn hours yesterday to find bargains on Nintendo Wii game consoles and sterling-silver jewelry.

The day after the U.S. Thanksgiving holiday is called Black Friday because at one time it was considered the day retailers turned profitable for the year.

Kenyata Luckey, a 22-year-old waitress, is spending about $300 this year, half the amount she spent last year, because there aren't as many good deals at Target Corp. and Wal- Mart.

She bought remote-control cars, a Big Wheel bike and stocking stuffers for her son, niece and nephew at an Atlanta Target store at 7:30 a.m. yesterday. A talking-doll set she wanted cost $50, and wasn't on sale, so she didn't buy it.

There are sales, but not on the stuff I wanted, Luckey said.

Howard Davidowitz, chairman of Davidowitz & Associates Inc., a New York-based retail consulting firm, says the best deals are yet to come.

You've got to move product, Davidowitz said yesterday. And retailers are on a terrible sales trend, so there is no choice but to sell the inventory at what you can sell it at.

ShopperTrak measures foot traffic in shopping centers and malls using more than 45,000 video devices.

Source - Bloomberg