Retail traffic up; average spending falls during Thanksgiving shopping

11/26/2007

NEW YORK - The early returns from the Thanksgiving shopping weekend are mixed, but there was reason for optimism among retailers.

Deep discounts and extended hours drew more than 147 million shoppers to U.S. stores over the four-day holiday shopping period, but average consumer spending fell, a retailers' group said yesterday.

The results from the National Retail Federation's 2007 Black Friday Weekend Survey were attributed to the economic uncertainty facing consumers and tough comparisons with last year.

Black Friday is the day retailers try to lure consumers to start their holiday shopping with eye-popping discounts and early bird specials. It once marked the day retailers turned a profit, or went into the black, for the year.

The survey, which included data from Thursday to Saturday and projections for yesterday, showed customers spent an average of $347.44, down 3.5 percent from $360.15 last year.

But the decline was offset by a 4.8 percent increase in the number of shoppers, making the weekend's total spending results "extremely similar" with last year, federation spokesman Ellen Davis said.

The federation did not give a figure for total spending.

SpendingPulse, the retail data service of MasterCard Inc., estimated total spending for Friday through yesterday will reach $42 billion to $43 billion. That would be a 4.5 percent to 5.5 percent increase over last year.

SpendingPulse tracks sales activity in the MasterCard payments network and couples it with estimates of all other payment forms.

This year's increase was helped by the ever-earlier start times, Michael McNamara, vice president of research and analysis for SpendingPulse, said.

Some retailers opened their doors at 4 or 5 a.m. Friday.

Clearly, the biggest draw was electronics, benefiting consumer electronics chains like Best Buy Co. and discounters such as Wal-Mart Stores Inc. and Target Corp.

"This was a really good start. ... There seemed to be a lot of pent-up demand," said Bill Martin, co-founder of ShopperTrak RCT Corp., which tracks total sales at more than 50,000 retail outlets. ShopperTrak reported late Sunday that sales on Friday and Saturday combined rose 7.2 percent to $16.4 billion from the same two-day period a year ago.

Total sales on Friday, the day after Thanksgiving, rose to $10.3 billion, up 8.3 percent from the same day a year ago. Mr. Martin had expected increases no greater than 5 percent.

Meanwhile, Internet research firm comScore Inc. reported a 22 percent gain in online sales on the day after Thanksgiving compared with the same day a year ago and estimated online sales would exceed $700 million online today, the official kickoff to the online shopping season.

According to a Reuters/Zogby poll from last week, a growing number of U.S. consumers said they planned to spend less on gifts this holiday season amid concerns about the U.S. housing downturn and fears that the economy might be heading toward a recession.

The federation said the weekend's results did not change its projection that total holiday sales will rise 4 percent this year, the slowest growth in five years. "This weekend, as big as it is, only represents about 10 percent of total holiday shopping volume. We still have 90 percent of the season in front of us," Mr. McNamara said.

"The growth rate you see on this holiday weekend doesn't necessarily translate to the growth rate you see for the overall season," he added.