Holiday buying fell into 2 seasons

A last-minute shopper leaves the Toys R Us store in New York. In the week before Christmas, shoppers gave retailers a 4.5 percent hike in revenue over the same week last year at stores open at least a year. ASSOCIATED PRESS Enlarge

NEW YORK -- The holiday shopping season turned out to be two seasons: the Black Friday binge and a last-minute surge.

Together, they added up to decent sales gains for retailers.

In November, spending rose 4.1 percent. From Dec. 1 to Dec. 24, it rose 4.7 percent compared with the same period last year, according to research firm ShopperTrak. A 4 percent rise is considered a healthy season.

The higher sales are good news for the economy, because they show shoppers were willing to fund a holiday splurge despite high unemployment and other lingering economic woes. Consumer spending, including major items such as health care, accounts for 70 percent of the economy.

But Hana Ben-Shabat, a partner in the retail practice of A.T. Kearney, a management consulting firm, said many people are pinched for cash in the slow economic recovery, and they were seeking the best deals, which could squeeze stores' profits for the fourth quarter.

The doldrums between Black Friday and the pre-Christmas surge showed how shoppers wait for discounts they know will come.

"The days that the American consumer gets excited about 25 percent off are over," said C. Britt Beemer, chairman of America's Research Group. "Shoppers keep their eye on the ball for the big sales events."

Stores have trained even shoppers who are primed to spend to look for a discount.

Heading into the season, stores were nervous that shoppers would be tight-fisted. Many officially opened the season with discounts on TVs and toys that started as early as Thanksgiving Day. Consumers came out in droves, resulting in record spending. Then the frenzy tapered off. A mild winter and Christmas' falling on a Sunday encouraged people to wait until the last minute and accentuated the peaks and valleys of spending.

Stores started to push more discounts to get shoppers to spend in the finale.

Retailers' promotional e-mails from Dec. 18 to Dec. 22 spiked 34 percent compared with the same period a year ago, according to Responsys, which tracks e-mail activity from more than 100 merchants.

According to Mr. Beemer's consumer surveys, 60 percent of shoppers polled were looking for discounts of more than 50 percent to get them to buy. That's up from last year's 51 percent of shoppers polled.

Tracey Spears of Locust Grove, Ga., who was shopping Wednesday at Atlanta's Lenox Square Mall, said she got 75 percent of her holiday shopping done on Black Friday or the day after Thanksgiving. She took advantage of deals, including a Keurig coffee maker from Target and clothes from Hollister on sale.

"I had more money because I got a better bonus this year, but sales are important. You always want to buy stuff cheaper," she said.

She and others helped to create pronounced waves in spending.

"The downs and ups were much more accentuated," said Michael Niemira, chief economist at the International Council of Shopping Centers. "It just shows how cautious the consumer is. Consumers are bargain hunters more today than before."

In the week before Christmas, last-minute shoppers gave retailers a 4.5 percent hike in revenue over the same week last year at stores open at least a year, according to the International Council of Shopping Centers-Goldman Sachs Weekly Chain Store Sales Index. It estimates sales at 24 major stores, including Macy's Inc. and Costco Wholesale Corp.

Revenue at stores open at least a year is an important measurement of a retailer's performance because it excludes the effects of stores that open or close during the year.

Total retail revenue for the week ended Saturday rose 14.8 percent compared with a year ago, ShopperTrak estimates. For the week that ended Nov. 26, which included the traditional start of holiday shopping on the day after Thanksgiving, stores had the biggest sales surge from the week before since 1993, according to the ICSC-Goldman Sachs index.

The post-Black Friday lull was deeper than usual. The two weeks after Thanksgiving weekend showed the biggest percentage sales decline since 2000. Then, during the final two weeks before Christmas, sales surged again, by the highest rate since 2005, Mr. Niemira said.

The season "was good but uneven," he said.