The Business Times

Black Friday gets holiday shopping season in high gear

Published Fri, Nov 28, 2014 · 10:58 PM
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[WASHINGTON] Black Friday, the biggest US shopping "holiday", kicked off with expectations that lower gasoline prices and higher consumer confidence could mean better year-end retail sales than last year.

The buying frenzy started early, turning Thursday's Thanksgiving Day holiday into what the industry has begun calling "Gray Thursday".

Big retail chains like Walmart, Target and Macy's opened their doors at 6.00 pm (0100 GMT Friday) in hopes of boosting their weekend sales, even before many Americans had finished the traditional turkey holiday feast.

Walmart and Target boasted that the strategy was a success, saying they were swamped with customers - without saying how many.

"Last night was awesome! In a few short hours, we flipped from being the largest grocery store in town to the best gift shop on the block" drawing "millions of customers" into stores, said Laura Phillips, senior vice-president of merchandising at the world's largest retailer.

"Online shopping started while turkeys were still in the oven and yesterday was our second-highest online sales day ever - topped only by Cyber Monday last year," she said.

Target said the Thanksgiving weekend got off to "a strong early start" with the discount chain for the first time offering special Black Friday deals on Wednesday.

Shoppers were snapping up TVs, headphones and other electronics.

For a while, Best Buy's website read: "We're sorry. Best is currently unavailable. Check back soon." The site was restored and the company explained that "a concentrated spike in mobile traffic triggered issues that led us to shut down in order to take proactive measures to restore full performance." New-vehicle sales were expected to rev up during Black Friday deals. "Shoppers continue to return to the dealership as economic conditions remain favourable, with the unemployment rate at its lowest in six years and with consumer confidence nearing pre-recession levels," said Alec Gutierrez, senior analyst for Kelley Blue Book.

In addition to the improving economy and healthy job gains, consumers may see more money in their pockets to spend as gasoline prices fall, mostly due to declining crude oil prices.

As of Monday, the average price at the pump was US$2.82 per gallon, 47 cents lower than a year ago, "and the lowest price heading into a Thanksgiving holiday since 2009," according to the Department of Energy.

"Lower gasoline prices are assisting in making holiday spending and confidence rather elevated. Even though consumer spending on gasoline is slightly less than three per cent of disposable income, it plays a more significant role on consumer mood," said Chris Christopher, IHS Global Insight.

Christopher forecast this year's holiday retail sales will increase 4.2 per cent year-over-year, compared with 3.1 per cent gains in both 2012 and 2013.

He noted that last year's holiday retail sales, at US$579.3 billion (S$755.3 billion), were weighed down by the federal government shutdown in October and an unusually cold December.

The National Retail Federation said it expected more than 140.1 million shoppers for the Thanksgiving weekend Thursday through Sunday, slightly below last year's expectations survey.

"Consumers today want more than just the discounts they've been showered with since the start of the recession; they want exclusive offerings and a good reason to spend their discretionary budgets," said NRF President and CEO Matthew Shay.

"We could witness a sea change this holiday season as consumers' reliance on extremely deep discounts over the biggest shopping weekend of the year shifts to more of a 'wait-and-see' mentality." Consumer Reports said that Americans' shop-'til-you-drop Black Friday fever may be fading, after a poll showed more than half of them saying they will not be shopping at all.

Fifty-three per cent of respondents said they did not plan to shop anytime during the five-day stretch between Thanksgiving Day and Cyber Monday, the promoted online shopping day.

Among the 47 per cent who plan to buy gifts, 38 per cent will be doing so exclusively online compared with 30 per cent who intend to shop strictly at stores.

"The change in shopping behaviour from mall to mouse has a lot to do with convenience. People hate crowds. Men, in particular, are eschewing stores for the Internet," said Tod Marks, senior project editor at Consumer Reports.


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