Retailers Hope There Will Be Plenty of Green This Black Friday
Friday, November 23, 2007JEFF YASTINE: It was a day for shopping on this black Friday as Americans packed stores across the country. Many retailers opened their doors well before dawn and attracted shoppers with early morning deals. Black Friday is traditionally the day that retailers' balance sheets move out of the red and into the black. As Suzanne Pratt reports, consumers were in a spending mood today despite forecasts of lackluster holiday sales.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: At Macy's in New York's Herald Square, it's beginning to look a lot like Christmas. But even with all the trimmings, retailers worry consumers are feeling "bah humbug" rather than joyous. Like many department stores, Macy's rang up disappointing fall sales and management expects only a flat performance in the holiday season. Still, its flagship store was jam-packed today, so Macy's Chairman Terry Lundgren is optimistic.
TERRY LUNDGREN, CHAIRMAN & CEO, MACY'S INC.: If this morning is any indication, we had to open the store early because there were so many consumers outside of our door. Now, they were here for value. So I'm counting on this being a good, solid fourth quarter. And when that happens, that's when you really see how the consumer is behaving and reacting.
PRATT: For most retailers, the day after Thanksgiving is not the busiest shopping day, despite all the fanfare and heavy store traffic. Still, experts say it is psychologically important because it marks the official start of the holiday shopping season, a period for most retailers which can mean up to 50 percent of annual sales. The National Retail Federation expects this year will be the worst for holiday sales since 2002, with a year-over-year gain of 4 percent. That compares to a 4.6 percent increase last year. Some experts are even more pessimistic, forecasting a gain of only 2 percent. Retail analyst Dana Telsey says consumers are facing many obstacles.
DANA TELSEY, CEO, TELSEY ADVISORY GROUP: We believe it's certainly more the environment of rising gas prices, the credit environment and weaker consumer confidence that's really created a Christmas season that's not expected to be as robust.
PRATT: Consumers across the country lined up early today for door- buster deals. And many stores cut prices even before Thanksgiving, an indication of just how worried retailers are about the tough conditions. Bear Stearns analyst Christine Augustine says the bad economic environment is likely to be good news for shoppers.
CHRISTINE AUGUSTINE, RETAIL ANALYST, BEAR STEARNS: Holiday sales will be very promotional and that the consumers will be able to take advantage of a lot of discounting. It will really be a buyers' market for the consumer.
PRATT: While there are few must-have items this year, jewelry and accessories are expected to grace many shopping bags. Once again, electronics stores are expected to be among the biggest winners. Best Buy store manager Larry Schmitt says customers are spending more this year than last year.
LARRY SCHMITT, STORE MANAGER, BEST BUY: We're seeing computers, computers, computers, along with flat-screen televisions, GPS systems and gaming systems. But computers seems to be the big ticket.
PRATT: This year there are 32 shopping days between Thanksgiving and Christmas, the maximum possible on the calendar. But experts say more time doesn't necessarily result in more spending. It means people will probably procrastinate, shopping even later in the season. Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York.
