Will deep discounts lift holiday shopping season?
Recession-wary merchants cut prices dramatically and threw open their doors in the early morning hours of Black Friday in hopes of enticing budge-conscious consumers looking for bargains at the start of the holiday shopping season.
Their efforts brought big crowds to suburban malls and stores nationwide, but experts were uncertain if the heavy traffic would stave off what some expect to be the bleakest holiday shopping season in years.
Best Buy at Gurnee Mills in Gurnee opened at 5 a.m. and offered a 49-inch Panasonic plasma HDTV for $899.99 and a Garmin GPS for $189.99. Toys "R" Us advertised discounts of up to 60 percent until 10 a.m.
At Spring Hill Mall in West Dundee, women's retailer Charlotte Russe featured 25 percent off everything in the store; Aeropostale offered discounts of 50 to 70 percent.
But how well the discounts worked toward boosting sales was uncertain.
George Rosenbaum of Leo J. Shapiro and Associates, a consumer research firm in Chicago, said interviews showed 65 percent of consumers plan to spend less this Christmas, and only 9 percent said the would spend more.
Observing heavy volume in shoe departments at Westfield Old Orchard Shopping Centre in Skokie and chatting with shoppers, he said Friday's deep discounting seems to have brought out people buying for themselves and their households rather than gifts, which could mean a less-than-merry holiday season for merchants, he said.
A Gallup Pol said individuals may spend an average of $616 on holiday gifts this year, down 29 percent from a year earlier. Consumer spending makes up more than two-thirds of the U.S. economy, which has dropped into a recession amid declining consumer confidence and rising unemployment.
Neil Stern, partner with the consultants McMillan Doolittle LLP of Chicago, pointed out that Black Friday and the weekend after Thanksgiving are only the start of the shopping season; the biggest shopping days come the weekend before Christmas.
"People want bargains, they are willing to wait retailers out," he said.
Despite the heavy Black Friday turnout, he still expects this season to be weaker than in the past.
Chicago-based ShopperTrak found morning shopping numbers nationally were similar to last year, despite expectations they would be down by 9 percent, said Bill Martin, executive vice president of sales and marketing.
His company expects the dollar amount of sales to be the same as last year's $10 billion plus, and strong discounting will probably mean that figure holds despite the higher number of shoppers, he said.
ShopperTrak measures shopper behavior with electronic devices and translates that and other data into sales figures.
But Martin's gut feeling is that Chicago and the Midwest might outperform national figures.
Woodfield Shopping Center in Schaumburg had 4-10 percent more cars in the parking lot each hour than last year, said Marc Strick, general manager.
"It's a lot busier than we even expected," he said. "We're delighted with today's traffic."
Electronics, toys and clothing seemed to be the big winners, according to the National Retail Federation.
<div class="infoBox"> <h1>More Coverage</h1> <div class="infoBoxContent"> <div class="infoArea"> <h2>Stories</h2> <ul class="links"> <li><a href="/story/?id=254320">Black Friday shoppers out in force, but cautious <span class="date">[11/28/08]</span></a></li> </ul> </div> </div> </div>