Monday, November 26, 2007

Holiday Sales Increase; U.S. Shoppers Spend Less on Average

Sales gained in the days after the U.S. Thanksgiving holiday as retailers lured more customers with discounts even as individual shoppers spent less on average.

ShopperTrak RCT Corp. reported yesterday an 8.3 percent gain in sales the day after Thanksgiving, a bigger increase than it expected. The National Retail Federation said 147 million customers visited stores, up 4.8 percent from a year earlier, while shoppers spent 3.5 percent less per person.

Both groups left their forecasts for the holiday season unchanged, with the NRF predicting the slowest increase in sales in five years. Customers have cut back on spending in the face of increased costs for milk and gasoline and the worst housing slump in 16 years, forcing Wal-Mart Stores Inc., Macy's Inc. and other retailers to slash prices.

``Shoppers are very mission-focused,'' said Fred Crawford, managing director for consultant AlixPartners LLP. ``They know who is carrying what, and at what price point.''

Consumer purchases over the Internet rose 29 percent on Thanksgiving Day and 22 percent the day after, Reston, Virginia- based ComScore Inc. said. Spending over the Internet may set a single-day record today as people return to work from the holiday weekend, it said.

Shoppers spent an average of $347.44 on purchases from Nov. 22 through yesterday, the NRF said based on a poll it commissioned from BIGresearch. Consumers chose to buy less- expensive digital-photo frames and cashmere sweaters instead of the high-definition televisions they favored last year, NRF spokesman Scott Krugman said.

`More Conservative'

``It's the saturation of HD-TVs into the market, and also retailers recognizing that consumers will be more conservative this year and focusing on lower-priced merchandise,'' he said.

Investor optimism pushed shares of most retailers higher on Nov. 23. Circuit City Stores Inc. climbed the most in at least 27 years, helping the Standard & Poor's 500 Retailing Index jump 2.7 percent. Wal-Mart Stores Inc. rose 1.9 percent while Target Corp. climbed 5.7 percent and Macy's Inc. advanced 5.4 percent.

``Though Black Friday was a complete success for many retailers, the results of the holiday season won't be determined until the last two weeks of December,'' NRF President Tracy Mullin said in a statement.

Sales in November and December represent 20 percent of retailers' annual revenue, according to the NRF. The fourth quarter accounts for almost a third of retailers' annual profit, according to the International Council of Shopping Centers.

Black Friday

Sales on Nov. 23, called Black Friday because it was considered the day that retailers traditionally turned a profit for the year, rose to $10.3 billion, ShopperTrak said.

Combined sales for the two days after Thanksgiving increased 7.2 percent to $16.4 billion from a year earlier, the firm said yesterday. ShopperTrak co-founder Bill Martin described the results on both days as ``impressive.''

``While some consumers typically experience a bit of a shopping hangover following Black Friday, the Saturday sales performance was still impressive, and even above the overall strength we anticipated heading into the holiday season,'' Martin said in a statement.

ShopperTrak, which maintained its forecast of a 3.6 percent gain in holiday sales, measures foot traffic in shopping centers and malls using more than 50,000 video devices and past U.S. Commerce Department data. The firm has been releasing sales information since 2003.

NRF Poll

BIGresearch, based in Worthington, Ohio, polled 2,395 consumers Nov. 22-24. The NRF has had a poll since 2004. The margin of error of the BIGresearch survey was plus or minus 1.5 percentage points.

Krugman, who didn't provide an aggregate spending estimate for the weekend, said overall sales were lifted by the higher number of shoppers, even as they spent less individually.

The NRF in September predicted a 4 percent gain in total retail sales for November and December, the smallest gain since a 1.3 percent rise in 2002.

Online retail spending on ``Cyber Monday'' may surpass $700 million as customers head to Inc. and to find bargains on flat-panel televisions and toys, ComScore said.

Online visits on Black Friday increased 10 percent from a year earlier, according to data released yesterday by research firm Nielsen Online.

Web sites run by IAC/InterActiveCorp, owner of the HSN shopping channel and ticket broker Ticketmaster, were the most visited by U.S. shoppers from their homes, followed by, and Target, New York-based Nielsen said.

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