Monday, December 1, 2014

Black Friday in USA, Fizzles

Breaking News

Black Friday Fizzles With Consumers as Sales Tumble 11%: Retail

Photographer: David Paul Morris/Bloomberg
Shoppers wait in line outside a Best Buy Co. store ahead of Black Friday in San Francisco, California. Close
Photographer: David Paul Morris/Bloomberg

Even after doling out discounts on electronics and clothes, retailers struggled to entice shoppers to Black Friday sales events, putting pressure on the industry as it heads into the final weeks of the holiday season.
Spending tumbled an estimated 11 percent over the weekend from a year earlier, the Washington-based National Retail Federation said yesterday. And more than 6 million shoppers who had been expected to hit stores never showed up.
Consumers were unmoved by retailers’ aggressive discounts and longer Thanksgiving hours, raising concern that signs of recovery in recent months won’t endure. The NRF had predicted a 4.1 percent sales gain for November and December -- the best performance since 2011. Still, the trade group cast the latest numbers in a positive light, saying it showed shoppers were confident enough to skip the initial rush for discounts.
“The holiday season and the weekend are a marathon, not a sprint,” NRF Chief Executive Officer Matthew Shay said on a conference call. “This is going to continue to be a very competitive season.”
Consumer spending fell to $50.9 billion over the past four days, down from $57.4 billion in 2013, according to the NRF. It was the second year in a row that sales declined during the post-Thanksgiving Black Friday weekend, which had long been famous for long lines and frenzied crowds.

Photographer: David Paul Morris/Bloomberg
A man takes a break from shopping inside the Westfield San Francisco Centre on Black Friday in San Francisco. While store traffic climbed 27 percent on Thanksgiving compared with a year earlier, it dropped 5.6 percent the next day, which has traditionally served as the kickoff to the holiday shopping season. Close
A man takes a break from shopping inside the Westfield San Francisco Centre on Black... Read More

Doorbuster Deals

Retailers rolled out their usual doorbuster specials in a bid to lure customers. Wal-Mart Stores Inc. sold an RCA tablet for $29, DVD movies for $1.96 each and a 50-inch high-definition television for $218. Best Buy Co. had a 55-inch Samsung 4K television for $899, hundreds less than its usual price.
Even so, many shoppers stayed home. The NRF had predicted that 140.1 million customers would visit retailers last weekend, a small decline from last year’s 140.3 million. Instead, only 133.7 million showed up.
Wal-Mart (WMT), based in Bentonville, Arkansas, dropped 0.7 percent to $86.95 at 7:44 a.m. in New York, before the markets open. Macy’s Inc. fell 0.6 percent to $64.55 and J.C. Penney Co. declined 0.7 percent $7.95.
An effort by some retailers to put items on sale ahead of Thanksgiving may have contributed to sluggish demand on Black Friday, Shay said.
The slower foot traffic means retailers will have to wring more money from consumers in December, including during today’s Cyber Monday e-commerce blitz. Holiday shopping is key for retailers -- with sales in November and December accounting for about 19 percent of annual revenue, according to the NRF -- and more of that is shifting online.

Cyber Monday

The Web may not be a savior for traditional retail, though. While e-commerce orders are growing, they’re still dwarfed by brick-and-mortar sales. The novelty of Cyber Monday also is dimming: The number of shoppers participating in the event today is projected to decline.
So far, holiday shoppers have spent $22.7 billion online this season, up 15 percent from a year earlier, according to ComScore Inc. That includes more than $1.5 billion on Black Friday.
The e-commerce growth means shopping malls have to work harder to get people in the door. The University Town Center -- a brand-new mall in Sarasota, Florida -- was only moderately busy on Saturday evening, with more customers in the corridors than in the stores.
Ariana Bravo, a 16-year-old student from Lakewood Ranch, said she used her employee discount at Pacific Sunwear to buy a couple small items, but wasn’t lured by any promotions.
“It seems like they’re the normal sales that they already have, just all in one day,” she said.

Family Time

Even as an improving job market and lower gas prices have sent consumer sentiment to its highest level since the recession, many Americans are keeping a lid on Christmas shopping. Another customer at the Florida mall, Jotasia Walker, said her family draws names and gets one gift per person, rather than buying presents for everyone. The 21-year-old, who was visiting the mall with three sisters, two cousins, a niece and a nephew, said they came out more to spend time together than to shop.
The average shopper spent an estimated $380.95 over the weekend, a 6.4 percent drop, according to an NRF-commissioned survey of more than 4,600 people by Prosper Insights & Analytics.
Retailers also had to contend with demonstrations from protesters angered by the decision not to indict a white police officer in the killing of an unarmed black teenager in Ferguson, Missouri. Events were held at stores and malls nationwide on Black Friday, with some of the protests leading to brief standoffs with police. Demonstrators also called on consumers to boycott stores.

Recession Hangover

The industry’s focus now shifts to Cyber Monday, when e-commerce sites release another wave of discounts. Almost 127 million Americans will shop online today, Prosper predicts, down from 131.6 million a year earlier. That lends evidence to the notion that Americans are less enticed by one-day sales events.
Many consumers also don’t feel like the economy has recovered from the recession yet, Shay said. That makes it difficult to gauge how much they plan to spend.
“The challenge is looking for a new equilibrium, and we just haven’t found it,” he said.
Retail chains have spruced up their websites in recent years, though they’ve struggled to keep pace with Inc. Sales at Amazon, the world’s largest online retailer, jumped 46 percent on Saturday and 24 percent on Black Friday, according to ChannelAdvisor Corp. That exceeded total e-commerce growth on those days, the research firm found.

Fuel Costs

Cheaper gasoline prices, meanwhile, are working in the retail industry’s favor. The average cost of a gallon of regular gasoline was $2.81 last week, the lowest in four years, according to the automobile group AAA. That’s leaving more money in shoppers’ wallets -- and making it less expensive to take a trip to the mall.
For many shoppers, though, the excitement of Black Friday sales may have simply worn off. Consumers know they can get discounts throughout the holiday season and are adjusting their shopping accordingly, said Simeon Siegel, a New York-based analyst at Nomura Holdings Inc.
“You can’t outsmart the consumer anymore,” he said. “You need to pander to where the consumer wants to shop and when.”
For Related News and Information: Worst Back-to-School Sales Growth Stokes Concern About Holidays Retailers’ Third-Quarter Sales Gains Fuel Optimism for Holidays Holiday Sales Seen Rising Most Since 2011 on Job Gains Bloomberg Intelligence 2015 Retail Outlook
To contact the reporter on this story: Lauren Coleman-Lochner in New York at
To contact the editors responsible for this story: Nick Turner at


Black Friday gets a little less frenzied

Online shopping, especially on phones and tablets, may be siphoning off some shoppers from the malls.  (Reuters) Online shopping, especially on phones and tablets, may be siphoning off some shoppers from the malls. (Reuters)

Black Friday seemed a little less crazy this year.
There were squabbles here and there, and elbows got thrown, but the Friday morning crowds appeared smaller than usual and less frenzied, in part because many Americans took advantage of stores’ earlier opening hours to do their shopping on Thanksgiving Day.
That might be hard to stomach for people worried about commercial encroachment on Thanksgiving. But it is good news for bargain-hunters who hate crowds.
Whether it’s good news for retailers remains to be seen. Sales estimates for the start of the holiday shopping season will start trickling out later in the weekend.
Stores such as Wal-Mart and Target reported brisk Thanksgiving crowds. The colossal Mall of America in Bloomington, Minnesota, said it drew 100,000 people between 5 p.m. Thursday and 1 a.m. Friday, nearly what it draws over a typical full day.
On Friday, plenty of shoppers were out, but it wasn’t elbow-to-elbow, said Moody’s analyst Michael Zucchero, at a mall in northern Connecticut.
”Traffic seems a little light,” he said. ”Stores being open last night takes away some of the early birds.”
Brooklyn residents Paul and Mary Phillips shopped at Target, Old Navy and Marshalls on Friday at the Atlantic Terminal Mall in New York City.
They picked DVD box sets for $5, marked down from $45, and speakers for $19, down from $50. They didn’t even have to wait in line.
”Because stores were open on Thursday, they’re not as crowded now,” Paul Phillips said.
There were scattered reports of shopper scuffles and arrests. In addition, protests were planned nationwide over minimum-wage laws and the grand jury decision in Ferguson, Missouri.
Protesters interrupted holiday shopping at major stores around St. Louis to vent their anger over the decision not to indict the police officer who shot and killed Michael Brown.
They temporarily shut down two large malls in suburban St. Louis. At one of those, the Galleria Mall in Richmond Heights, about 10 miles south of Ferguson, at least 200 protesters gathered. Several stores lowered their security doors or locked outside entrances as protests sprawled onto the floor while chanting, ”Stop shopping and join the movement.”
In Chicago, about 200 people demonstrated near the city’s popular Magnificent Mile shopping district, calling on people to boycott Black Friday shopping to show their solidarity with protesters in Ferguson.
Other disruptions: Best Buy’s website went down on Friday morning for about an hour, and then for another hour again in the evening.
Spokesman Jeff Shelman said ”a concentrated spike in mobile traffic” prompted the company to temporarily shut down the site. Online monitoring firm Dynatrace said Cabela’s, Foot Locker and J.C. Penney also had website problems.
Online shopping, especially on phones and tablets, may be siphoning off some shoppers from the malls.
IBM, which tracks online sales, said they rose 8 percent compared with Black Friday last year as of 3 p.m. E.T., with much-increased shopping on mobile devices.
In the stores, Toys R Us and Target executives said shoppers seem to be buying more than just the doorbusters and are filling their carts with items not on sale. That’s a sign that lower gas prices and an improving job picture are making shoppers more confident about opening their wallets.
At clothing stores, discounts were steep, with Old Navy offering up to half off everything. Best Buy offered $100 off some iPads. And Target slashed prices on TVs and video game consoles.
At the Westfield Fox Valley mall in Aurora, Illinois, the mood was calm. Some groggy shoppers were still in pajama pants, coffee in hand.
Kimberly States, shopping with her 11-year-old daughter, said it was markedly quieter around 6:30 a.m. Friday than the night before.
”It was a zoo last night around 10 p.m.,” States said. ”Now it seems like more of the old folks.”
Last year, sales on Black Friday slumped 13.2 percent to $9.74 billion, according to ShopperTrak, which tracks data at more than 70,000 stores globally. Bill Martin, co-founder of ShopperTrak, said it is unclear how stores will fare this year.
Retailers have turned to Thanksgiving openings to stay competitive and avoid losing sales that have shifted earlier into the holiday, said Ramesh Swarmy, a retail partner at the Deloitte consulting firm.
The holiday weekend still sets the tone for the shopping season, whose sales this year are expected to rise 4.1 percent to $611.9 billion. That would be the biggest increase since 2011. Black Friday has been the biggest shopping day of the year since 2005.
Brian Cornell, who became Target’s CEO in August and was at a Target store in New York’s East Harlem neighborhood on Thursday, said shopping traditions have changed.
”It’s been more of a week event,” he said.
As a result, some Black Friday shoppers were disappointed by what was left on shelves.
Kathy Wise of Scottsdale, Arizona, started shopping at 5 a.m. with her mother-in-law, hitting Wal-Mart, Target, Toys R Us and Sports Authority.
”It’s not as busy today,” Kathy Wise said as the two combed through a shelf of Monster High dolls. They couldn’t find the one Kathy’s daughter wanted, and said it seemed as if some of the best deals and items were already gone.
”It’s kind of a bummer,” Wise said.

Source: Financial Express
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