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updated: 11/24/2012 1:33 PM

Retailers' Thanksgiving sales cut Black Friday crowds

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  • Black Friday shoppers pour into the Valley River Center mall for the Midnight Madness sale Friday in Eugene, Ore.

      Black Friday shoppers pour into the Valley River Center mall for the Midnight Madness sale Friday in Eugene, Ore.
    Associated Press

 
Bloomberg News

Thanksgiving Day openings and midnight deals at retailers from Target Corp. to Wal-Mart Stores Inc. drew U.S. shoppers out earlier than ever, thinning crowds on Black Friday morning.

Mall traffic was heaviest from midnight to 2 a.m. and weakened later in the morning, Adrienne Tennant, an analyst at Janney Montgomery Scott LLC in Washington, said today in a note. Sales for the rest of the weekend will top last year, she said.

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Retailers have turned Black Friday, once a one-day event after Thanksgiving, into a week's worth of deals and discounts. With the earlier openings, online deals starting as far back as last weekend and new promotions stores are offering to win return visits, shopping malls were less hectic on Black Friday this year, said Ramesh Swamy, an analyst at Deloitte LLP.

"Retailers are going to pace themselves and start rolling out different types of promotions to keep consumers interested," Swamy said today in a telephone interview from Pasadena, California. Shoppers visiting stores this weekend are getting coupons that can be used starting next week or after Dec. 1 to lure them back, he said.

With consumers facing a sluggish economy and the threat of tax increases that may result if Washington doesn't avert the so-called fiscal cliff, this weekend will serve as a barometer of what's to come for retailers in the next five weeks. One early sign is that online sales rose 21 percent yesterday and 17 percent on Thanksgiving, according to IBM Benchmark.

Rising Sales

The National Retail Federation says holiday sales, including online, will rise 4.1 percent to about $586.1 billion this year, compared with a 5.6 percent gain in 2011. Online sales expected to gain 12 percent to $96 billion this year, three times as fast as total sales.

One reason may be that retailers have been putting many of their deals on the Web first. Target offered the same discounts it normally would reserve for stores on its website on Nov. 21. Staples Inc. posted what it called pre-Black Friday deals online on Nov. 18.

Mobile shopping also continued to gain popularity. EBay Inc.'s PayPal said the number of customers shopping through their tablets or smartphones more than doubled on Thanksgiving from last year. IBM said 24 percent of consumers used a mobile device to visit a retailer's site, up from 9.8 percent last year.

Mobile Shopping

Wal-Mart, which offered two-day online-only Black Friday specials, said traffic through its mobile apps tripled and that mobile accounted for 45 percent of all Walmart.com traffic on Thanksgiving.

"This is the year that mobile finally went mainstream," Anuj Nayar, a PayPal spokesman, said in a telephone interview yesterday. Many people finished Thanksgiving meals and then shopped on their tablets or phones, he said.

Forever 21 Inc., the closely held fast-fashion retailer, earlier this month introduced a revamped version of its mobile application that includes a barcode-scanning feature.

Shoppers can scan merchandise in stores to add items to an online wish-list, select different colors and sizes or show friends what they're browsing, as the company looks to "blur the boundaries between in-store and online shopping," Linda Chang, global marketing director, said in an e-mail.

Retailers also continued the trend of ever-earlier openings. Wal-Mart and Toys "R" Us Inc. opened at 8 p.m. on Thanksgiving, while Target pushed its openings to 9 p.m. to draw more families.

Earlier Starts

"Earlier is more convenient to get out after the Thanksgiving dinners," said Bryan Everett, senior vice president of Target stores. The greater number of families boosted purchases of clothes and home goods too as shoppers spent longer browsing than a year ago, he said.

Not everyone was a fan of the earlier starts. While Kellie Prater, 39, got in line at Target in Trotwood, Ohio, at 6:30 p.m. on Thanksgiving to get a dollhouse and other toys when it opened at 9 p.m., she said she wished the store didn't open until Friday morning.

"These people should not open until 5 a.m. or 6 a.m.," said Prater, a stay-at-home mother of three. "Let people be with their family -- they're minimum wage."

Fast Retailing Co.'s Uniqlo stores opened yesterday at 8 a.m., compared with 6 a.m. last year, because "there's not so many customers in the morning" and it helped employees, said Shin Odake, chief executive officer of its U.S. unit. Online consumers appeared to be waiting for Cyber Monday to make purchases, he said.

Consumers

Retailers also had increasingly confident consumers visiting stores this weekend. More Americans this month said the U.S. economy will improve than any time in the past decade, according to the Bloomberg Consumer Comfort Index. The share of households saying it would get better rose to 37 percent, the highest since March 2002. A year ago, the measure showed a record number of consumers said it was a bad time to spend.

Ernesto Aracena had already spent $2,000 by 11 a.m. yesterday in Manhattan at chains such as Abercrombie & Fitch Co. and Urban Outfitters Inc. The 20-year-old, who started shopping at midnight on Thanksgiving, has a lot more money this year after starting a personal trainer business.

Three Trips

"I've been waiting for Black Friday to come through to buy a bunch of clothes," he said while holding three shopping bags. "I went home about three times already. I left in the morning, got clothes, went home, dropped my bags off, came back, bought more clothes, went home, came back."

A rebound in housing and the job market, along with a drop in household debt, has led additional consumers to say they'll buy more this holiday, according to a survey this month by the Credit Union National Association and the Consumer Federation of America. Of those polled, 12 percent said they would boost spending, the highest level since 15 percent in 2007.

Still, the survey reported 38 percent said they would spend less. Carlos Serrano fell into that group after his printing business was hurt by Hurricane Sandy. The 42-year-old resident of East Stroudsburg, Pennsylvania, planned to cut his holiday spending in half to $1,000 this year. He came to Georgetown in Washington yesterday, hoping to find deals that would help him stretch his dollars.

"I am buying the one big item and that's it," Serrano said.

Holiday sales may also get a boost from there being 32 days between Thanksgiving and Christmas this year compared with 30 in 2011, Jennifer Davis, an analyst at Lazard Capital Markets in New York, wrote in a note.

'Super Saturday'

"Because of the extra weekend versus last year, we're going to have a true Super Saturday," said Deloitte's Swamy, referring to the Saturday before Christmas which vies with Black Friday as the busiest shopping day of the year.

Weather may help gains too as colder temperatures increase sales of sweaters, boots, scarves, gloves and jackets, according to weather-data provider Planalytics Inc. Last year's Black Friday was the warmest in five years, the Berwyn, Pennsylvania- based firm said in an e-mail.

Gap Inc., the biggest U.S. specialty-apparel retailer, saw busy stores yesterday as customers responded to offers of $19 sweaters and $5 kids and baby graphic Ts from midnight to noon.

"We're encouraged by what we're seeing out there," Mark Breitbard, president of Gap Inc.'s North America division for its namesake brand, said in a telephone interview yesterday. "There's a lot of energy in the malls right now, which is great."

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