New York (AFP) – New York shoppers braved chilly temperatures after Thursday’s Thanksgiving feast as the “Black Friday” holiday shopping weekend kicked off the most important stretch of the year for retailers.
Foot traffic in downtown Manhattan Friday morning was busy, but not at peak saturation levels. Still, there was a buzz of excitement in the air.
“At three or four o’clock in the morning, it was very crazy. We went with the flow,” said Jason Flores, who was carrying bags from Macy’s and Zara, among others. “It’s best not to have a plan. It makes it more fun.”
Retailers have expanded the “Black Friday” concept to new limits in 2013, opening ever earlier on Thanksgiving Day, pulling more shopping all-nighters and kicking off promotions up to a week before the big day itself.
On the Upper East Side of Manhattan, about a dozen customers were spotted outside a Best Buy store at 6:00 pm Thursday evening before the doors opened. By 9:00 pm, the store was full.
Laura Pisani, who came with her mother to buy an iPad, said they had had their Thanksgiving dinner earlier than usual before rushing out to the stores.
“We started yesterday at 8:00 pm in a mall,” said Victoria Schmidt, a German tourist who had bags from Calvin Klein, Forever 21 and other retailers. “We bought things mostly for ourselves, and a Christmas present for my mother. We got 40 percent off.”
There were signs the aggressive Thursday campaign yielded benefits, with both Wal-Mart Stores and Target reporting “record” results from their Turkey-Day efforts.
One consequence of the pushed-up time-frame, however, was somewhat lower shopping volumes on Friday morning, said Morningstar analyst RJ Hottovy.
“Traffic is down a little bit,” said Hottovy, who said some shoppers may also have stayed away due to cold weather and the increased presence of online shopping.
Dynamics in the calendar and global economy are conspiring to make the 2013 holiday shopping season even more intense than usual. The holiday season accounts for about 20 percent of the retail industry’s total annual sales, according to the National Retail Federation.
The lateness of Thanksgiving means the holiday shopping season is a full weekend shorter than last year. On top of that, global economic growth remains tepid and U.S. job growth has been unspectacular.
On the positive side, consumers have gotten a break with lower gasoline prices, which are 13 cents per gallon less than they were a year ago, according to the American Automobile Association. Wealthier Americans are also feeling more flush, thanks to the appreciation of the stock market and higher housing prices.
Retailers have been even more aggressive than usual in cutting prices in order to lure in customers.
Walmart said during its most recent earnings report that it had big plans to “win for our customers and shareholders throughout the holidays.” The headline of its news release announced “aggressive holiday plans to drive sales.”Best Buy said it would match other competitors but warned profits may suffer.
“There’s not enough job growth,” Matthew Shay, president of the National Retail Federation, told CNBC. “Consumers are looking for deals.”
“Retailers have been very promotional.”
The retail federation predicts holiday shopping sales will increase 3.9 percent to $602.1 billion over the 2012 level. That is better than the 3.5 percent growth in the 2012 season, but below the six to seven percent increases before the financial crisis.
Analyst Hottovy forecasts that sales will grow at just 3 percent this season. He cites higher payroll taxes and concerns that the new health care law will result in higher costs.
“I think the low-middle income consumers are still facing a number of pressures,” Hottovy said. “We do expect a slowdown.”