Holiday Shopping Season Starts Softly: "The Consumer Wants Bigger Deals"

NEW YORK — Retailers who saw Thanksgiving holiday sales drop off as the weekend progressed stepped up online promotions on the day known as "Cyber Monday" to try to get consumers tired of the crowds at stores to keep shopping.

But after weeks of already heavy discounting both at regular stores and online, experts were doubtful that the day would give much of a lift to what is still expected to be one of the weakest holiday seasons in years.

"People are expecting that deals will only get better as we approach the Christmas time frame," said Youssef H. Squali, an analyst at Jefferies & Co. "So while Cyber Monday is significant I wouldn't say today is the only day to track. People may opt to wait a little more."

The Monday after Thanksgiving was dubbed "Cyber Monday" by the National Retail Federation trade group in 2005 to describe the unofficial kickoff to the online retail season _ when customers shopped at their desks as they returned to work. But with more deals advertised ahead of time and more consumers with high-speed access at home, the day has lost some luster.

Marcia Turner, 43, a freelance writer in Rochester, N.Y., said she plans to buy a Dell laptop before Christmas, but is holding off for now.

"I suspect prices will come down further before the holiday season is out," she said. "I doubt they will go up, so there is little risk in waiting, as I see it."

Crowds turned out for early morning specials after Thanksgiving on "Black Friday" _ so called because it had historically been the day retailers turned profitable for the year _ but many analysts say they were thinner than last year and shoppers were focused on bargains and smaller-ticket items.

Sales rose 3 percent to $10.6 billion on Friday from the Black Friday a year ago, but slipped 0.8 percent to $6 billion on Saturday, said ShopperTrak RCT, a research firm that tracks total retail sales at more than 50,000 outlets. Total retail sales for Friday and Saturday combined rose 1.9 percent from a year ago. ShopperTrak co-founder Bill Martin expects sales pulled back again on Sunday, for an estimated 1 percent rise over the three-day weekend.

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While "Cyber Monday" is not the busiest online shopping day of the year _ that day usually occurs later in December as shipping deadlines approach _ retailers who have seen consumers pull back amid the recession stepped up their online deals _ offering discounts on clothes and gadgets, set amounts off purchases, free shipping and more.

Traffic at online retailer eBags.com was up 12 percent compared with the Monday after Thanksgiving last year and sales were up 10 percent as of 1 p.m., said co-founder Peter Cobb _ about what he expected. The site is offering a 20 percent off deal for Cyber Monday.

"Retailers are much more aggressive this year, as we are," Cobb said. "We expect to see a big push in the next two weeks."

Amazon.com, which began running holiday promotions a week ago, said it is focusing less on Cyber Monday than the holidays as a whole.

"A lot of customers got shopping done through 'Black Friday' and through the weekend," said spokesman Craig Berman. "We really look at holiday shopping as a season, not as a couple of really busy days."

Target.com said its best sellers were toys and electronics and said as of midday Monday, traffic was trending up slightly compared to last year's "Cyber Monday."

Overall, there were few technical problems reported, but J. Crew, Victoria's Secret, Gap and Old Navy sites were down for short periods.

Merchants want consumers to keep shopping after seeing modest sales gains over the Thanksgiving weekend.

John Morris, an analysts at Wachovia Capital Markets, wrote in a note published Monday that traffic and business were strong on Black Friday but that the "strength did not carry through the remainder of the weekend as business fell off sharply on Saturday."

Karen MacDonald, a spokeswoman at mall operator Taubman Centers Inc., similarly said that based on a sampling of malls, business for the three-day weekend was flat from a year ago, with a sales spike on Friday that quickly fizzled.

"The momentum didn't continue," she said.

A more complete sales picture of the weekend will be known by Thursday, when the nation's retailers report November same-store sales, or sales at stores opened at least a year. Many analysts expect the period could show a rare drop in sales.

Retailers are hoping the traffic has migrated online. Nielsen Online reported that online traffic grew 10 percent year-over-year on Black Friday to 31.7 million unique visitors across 120 online retailers. And online billing site PayPal said transactions increased 34 percent and online payment volume rose 26 percent on Black Friday.

Internet research company comScore said Sunday that online spending on Thanksgiving Day and Friday was up 2 percent compared with a year ago. While slightly better than the flat growth comScore has predicted for the holidays, the increase is still drastically lower than the 19 percent growth last year. For the holiday season to date, online sales are down about 4 percent to $10.41 billion, according to comScore.

The most likely candidate for busiest online spending day this year is Monday, Dec. 15, comScore spokesman Andrew Lipsman said, as consumers rush to make sure gifts can be shipped in time for Christmas.

"Cyber Monday is never really the heaviest online spending day," he said. "It (marks) the first significant spike in online spending, but then spending continues to build really until about the middle of December."

The online deals weren't enticing Victoria Pericon, a mom in her thirties who lives in New York, to shop.

"With three children and other family members on list to shop for," she said, "I will be waiting until closer to Christmas to do my shopping because I believe that is when stores, both online and offline, will offer better deals."

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Associated Press Writers Rachel Metz and Anne D'Innocenzio contributed to this report.

Comments

[leftLibertarian]

I want a store to pay me to take a big TV!

[carrieanna]

This consumer isn't waiting for bigger deals. This consumer doesn't plan to spend much at all. I will probably temper most of my gift-giving by dipping into my bag of re-gifts. And this year I think plants fit best for my plans to give eco-friendly, locally grown/made items.

[TallGrrl]

The retailers still have merchandise they purchased earlier in the year. Add this to the stuff they purchased for the holiday season and you're looking at some freaked-out merchants.
The silly people who camped out at stores or shopped at midnight for "deals" were suckered into thinking that whatever it is they're looking for won't be there in a week...or two.
The best deals will be had on Boxing Day (26th of Dec) when the vendors drastically slash prices in order to get merchandise out of the store to make way for the next season.
I heard on NPR that there are some companies that have built malls and those malls are looking at foreclosure because the stores (who pay a percentage of their profit as rent) aren't selling as much.
Dominos, anyone?

[Montanagramma]

Rather than looking at the crowds, look at how many bags of merchandise they are carrying. Even on TV while they were singing the praises of the crowds, a closer look showed very few shopping bags in the hands of the shoppers.

[KillTheMessenger]

We overheard an employee at one of the stores who remarked that people come in, take a good look and then leave without buying. It was confirmed by a store full of people and no lines at the checkout.

Thinking about it, we saw something similar at a second retailer... hard to get through to the merchandise but only 60 seconds to get through the checkout...

[MovingtoNorway]

They may be getting wiser. Best bargain is to pay off the credit card balance and car loan. We're headed for trouble and you need to get debt free.

[KillTheMessenger]

I am waiting for the deals after the holidays. And if the deals are still not good enough, I can wait until after Christmas next year...

[doyle005]

The crowds in the DC area malls on Friday were the smallest I have seen on a Black Friday. And when I went back out Sat, there were no crowds, just empty stores with too many employees.

[thegreatgiginthesky]

Yea, retailers are going to get slammed this year.

[thegreatgiginthesky]

My in laws from Europe are visiting and my wife and I took them shopping on friday. The mall we took them too was not crowded, at least no where near the crowds we've seen in the last 5 years.