ECON Black Friday Starts on Subdued Note

http://online.wsj.com/article/SB122788859032664381.html?mod=googlenews_wsj

NOVEMBER 28, 2008, 11:30 A.M. ET

Black Friday Starts on Subdued Note
By KAREN TALLEY

NEW YORK -- Shoppers have turned out for Black Friday, but so far appear to be carrying fewer bags than last year as they snap up very discounted "Door Buster" items but opt out of much browsing.

With consumer confidence, as measured by the Conference Board, near a 41-year low, many retailers are cutting prices Wal-Mart-style on the opening day of the holiday-shopping season. Deep discounts may generate long lines and higher sales volumes, but they aren't expected to stop sales from declining in dollar terms. When investors digest that, share prices likely will fall again.

"It's a very focused consumer this year," said Britt Beemer, chairman of America's Research Group. "They are going in, getting what they want, and if it's not there, leaving, in a lot of cases without buying much else."

Beemer said the behavior is more pronounced than in recent years and is accompanied by about 10% fewer shoppers.

With consumer confidence, as measured by the Conference Board, near a 41-year low, many retailers are cutting prices Wal-Mart style on the opening day of the holiday-shopping season. Deep discounts may generate long lines and higher sales volumes, but they aren't expected to stop sales from declining in dollar terms. When investors digest that, share prices likely will fall again.

"It looks like just about everyone is doing some special incentive, more so than last year," said Dan Jasper, spokesman for Mall of America, the biggest mall in the U.S. at 4.2-million square feet.

Traffic is brisk throughout the 524-shop mall outside Minneapolis, with Macy's Inc., Apple Inc.'s consumer store and Aeropostale Inc. among the stores with the biggest crowds, Mr. Jasper said.

"Deals are bigger, consumers are more price sensitive, and stores are more desperate," said Daniel Binder, retail analyst at Jefferies, of his early impressions.

Many stores are offering major cuts, like 50% off their entire stock, or buy one, get 50% off everything, Binder said.

Teen retailers -- a group that has been offering more promotions -- are seeing strong traffic, and winter footwear, including the Uggs line produced by Deckers Outdoor Corp., is seeing solid demand, Binder said.

Jewelry, furniture, and Baby Boomer women's apparel retailers are quite sluggish, Binder said.

Retailers are busy online as well, with many offering cyber door busters on Friday featuring free shipping on more than a sleigh-load of items.

At Target Corp.'s Web site, shoppers are being greeted by a promotion for "50,000+" items.

One thing is for sure: There are too many stores in the U.S. for the current spending environment, and most observers expect more closures and bankruptcies. Black Friday is supposed to be the day when retailers start showing a profit on the year, but this year the tide of red ink may be too much for some.

Write to Karen Talley at karen.talley@dowjones.com

U.S Retailers Slash Prices..and Pray

http://www.google.com/hostednews/afp/article/ALeqM5jBOaSQJPgh8_hjYsiv_egUpMHgAA

US retailers slash prices -- and pray
24 minutes ago

NEW YORK (AFP) — US shoppers snapped up bargain basement deals on so-called Black Friday as desperate retailers attempted to claw their way out of a deepening slump.

Already by 8:00 am (1300 GMT) New York's 34th Street bustled with tourists and locals toting huge paper bags out of shops offering staggering discounts.

The day after the Thanksgiving holiday kicks off the Christmas shopping season and is traditionally a bonanza for stores, earning the name Black Friday because balance sheets go into the black.

But with the US economy in a nosedive and retailers in particularly bad shape, this year's Black Friday has become a crucial litmus test of consumer confidence.

"Give them what they want -- and hope for the best," was how industry watcher Women's Wear Daily summed up retailers' strategy.

Women's clothing store Ann Taylor promised 20 percent off everything bought before noon, Lane Bryant offered "buy one get one free" and Banana Republic 40 percent off.

Frantic crowds poured through New York's much-loved department store Macy's, where display windows featured puppets in picture-postcard Christmas scenes.

Frieda, a 48-year-old marriage registrar from Holland, emerged astonished at the bargains.

"I bought Levis jeans for my sons. They cost 30 dollars each and in Holland they cost at least 150 dollars," she said.

Katrina Chapman, a British accountant, said her husband had scooped up a Ralf Lauren suit for 200 dollars and Calvin Klein shirts for 20 dollars -- a fraction of the price in Britain.

For the Chapmans, Macy's was just the beginning of a day in New York's department stores.

"We got here at 6:30 am. I think we're going to go and have breakfast and then head off to Bloomingdales," Chapman, 32, said.

But if Macy's was crowded, many other stores along 34th Street were not. Only five people stood waiting for Banana Republic to open.

A huge proportion of people shopping also appeared to be tourists, reflecting what economists say has been a crucial source of support for retailers, especially in New York.

Whether US shoppers will come to the retail economy's rescue is still not clear.

New York student Erika Pu, 20, said she was shopping, but carefully.

"I'm buying Christmas presents. You still have to do that, don't you? But I don't think people are going to be buying the really expensive stuff."

Her friend Carlos Ventura, a 23-year-old chef with a New York catering company, said the economic crisis had already taken a bite out of his income and that he wouldn't buy anything at all.

"Now I'm only cooking two or three days a week, where two months ago it was five, six days a week. I guess companies aren't wanting to spend money on entertaining anymore."

Third quarter results leading up to Black Friday were a bloodbath for many major retailers. And some chains, including electronics goods stalwart Circuit City, have already filed for bankruptcy.

But a senior executive at Best Buy, another electronics chain, put on a brave face.

"I think there's people out and they seem to be having a great time engaging with our employees and I think there's an optimism in the stores today," Best Buy president Brian Dunn told NBC television.

"We are very pleased with the crowd we are seeing this morning and seeing an awful lot of product moving through the registers. It's an exciting day here."

http://www.reuters.com/article/ousiv/idUSTRE4AQ1SK20081128?sp=true

Shoppers seek deals, buy less on Black Friday
Fri Nov 28, 2008 3:08pm EST

By Alexandria Sage and Aarthi Sivaraman

SAN FRANCISCO/NEW YORK (Reuters) - Shoppers headed to stores on Friday lured by promises of money-saving deals, but the annual kick-off to holiday sales appeared weaker this year and worries of a deep recession kept purchases down.

To generate excitement during what some experts predict may be the bleakest holiday shopping season in nearly two decades, retailers from Wal-Mart Stores Inc to Macy's Inc, Kohl's Corp and Best Buy Co Inc opened their doors early on "Black Friday," the day after Thanksgiving that marks the traditional start of the holiday shopping season, to offer steep discounts.

In New York's Valley Stream, a man working at a Wal-Mart died as a throng of shoppers broke down the doors trying to enter the store at 5 a.m. EST, police said. Four others were hurt in what the company called a "tragic" incident.

This holiday weekend will test the strength of consumer sentiment, a main driver of the U.S. economy, as the country faces its worst financial crisis since the Great Depression.

Marjorie Daube, 59, of Manhattan scaled back her shopping and was only buying sale items, aware that her husband's bonus at a financial firm would decline this year. "Shopping was never fun at all, and it's less fun now," Daube said.

Natalie Diaz, 32, plans to spend about half of the $2,000 she shelled out last year for Christmas gifts, but said she would not cut down on presents for her twins.

"Santa does not have a recession," she said, while shopping at a J.C. Penney Co Inc store in Jersey City, New Jersey.

Early store traffic was lighter this year, but it had picked up by midday, said Marshal Cohen, chief retail analyst at NPD Group. "The traffic is up compared to last year, but the bag count is down," he said. "There may be more casual shoppers, but they're not buying as much as last year."

Britt Beemer of America's Research Group said he saw shoppers carrying 25 to 40 percent fewer bags this year.

FEWER SALES AT HALF-PRICE

Most major stores offer big discounts on Black Friday, hoping to ring in billions of dollars by year's end, or up to 40 percent of annual sales.

The Standard & Poor's Retail Index slipped 1.6 percent on Friday. Major retail declines were led by a 10 percent drop at Talbots Inc and a nearly 7 percent drop for Chico's FAS Inc.

The retail index is down 35 percent so far this year, versus a nearly 40 percent drop for the S&P 500 index.

At one Best Buy in New Jersey, it took up to 1-1/2 hours for a crowd of 700 to 1,000 people to enter the store at 5 a.m., a manager said.

Parking lots at Taubman Centers Inc malls in Michigan, Virginia, Illinois and Connecticut were about 90 percent full by midmorning, a spokeswoman said.

Still, holiday traffic is not an accurate indicator of sales, since some shoppers may balk at buying once they arrive, or buy sparingly.

And with deep price cuts of up to 75 percent, stores may also need to sell twice the merchandise to preserve profits, said NPD's Cohen.

"If you don't get a good Black Friday start, you've got an awful lot of ground to make up," Cohen said.

One Macy's employee in San Francisco, Michael Vaughan, said he booked $3,000 in sales in the first three hours that the store was open -- but associates told him the norm for that period for Black Friday was four times that amount.

"Designer (clothing) is already 65 percent off," Vaughan said. "People still aren't buying."

WAL-MART PROSPERS

Many stores started offering steep discounts on everything from clothes to electronics weeks in advance of Thanksgiving.

Discounters like Wal-Mart have prospered in recent months as more consumers seek out their low prices.

But mid-tier retailers like department store operator Macy's and specialty chains such as AnnTaylor Stores Corp are battling to retain customers and eke out profits.

Macy's Chief Executive Terry Lundgren said the company has worked closely with its vendors to craft discounts without cutting too deeply into its own margins.

"One of the great advantages of being the largest customer to practically everyone you do business with is sharing in margin with our vendors and suppliers," Lundgren told Reuters in an interview.

Sales of clothing and big-ticket luxury items have been hit particularly hard as consumers cut back on everything but the most basic items. But electronics sellers and toy stores hope their goods will remain on the must-have lists of gift givers.

Online retailer Amazon.com Inc said Apple Inc's iPod personal music and video player was the No. 1-selling item on its website in the first 11 hours Friday.

The flurry of recent deals has convinced some shoppers they can get even better bargains by holding out longer.

"I think everyone is waiting for deeper discounts," said Cheri Tenfel, shopping at a Racine, Wisconsin, Best Buy. "I certainly am."

Retail sales at U.S. stores open at least a year could fall 2.4 percent in November, or 7.1 percent excluding Wal-Mart, compared with 4 percent growth last year, based on analyst forecasts compiled by Thomson Reuters.

Not in Long Island NY and Vero Beach FL!!!

Worker dies at Long Island Wal-Mart after being trampled in Black Friday stampede

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http://www.nydailynews.com/ny_local...worker_dies_at_long_island_walmart_after.html

Shoppers Fight At Wal-Mart

In the early morning rush at a Wal-Mart on Black Friday, customers fight over the last X-Box 360 console.
By News Video

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http://www.wavw.com/cc-common/news/sections/newsarticle.html?feed=244038&article=4651903

http://www.thestarpress.com/article/20081128/OPINION01/811280308

Our view: Shopping just might pull us out of this recession
November 28, 2008

It's Black Friday. Our advice to you is shop -- 'til you drop if that's what you like to do.

The economy is in dire straits, some say the worst since the Great Depression, and it could be teetering on the brink of something even worse.

In response, consumers have stopped buying and started saving. Financial advisers have been telling Americans they need to save more for years, but the decision to stop spending altogether now really could push our economy over the edge into free fall.

Here's why: Consumer spending accounts for two-thirds of the total economic activity in the United States.

On Wednesday, the Commerce Department reported that consumer spending plunged by 1 percent in October, even worse than the 0.9 percent decline that had been expected. It was the worst showing since September 2001.

Black Friday is not the busiest shopping day of the year -- the Saturday before Christmas has that distinction -- but it is an important one. There are several legends as to how the day got its name, but the main one has to do with accounting. Many retailers operate in the red most of the year, with the Friday after Thanksgiving traditionally the day the ink turns black on their ledgers.

Most businesses do reap most of their profit for the year from the Christmas season. Sales on Black Friday and every day after that until Christmas can make or break the year.

Several retailers like Circuit City and Linens 'N' Things have already filed bankruptcy this year, while Foot Locker, Home Depot, Ann Taylor and Zales have closed poorly performing stores. About two dozen other major retailers are rumored to be planning severe cuts after Jan. 1. They include Disney Stores, Wilson's Leather, Pier 1 Imports, Ethan Allen and Sprint Nextel.

Shoppers shouldn't, of course, spend money they don't have. Piling up charges on credit cards has been the downfall of many family budgets and may be in some measure responsible for our present situation. Many consumers, however, fearful of what might be coming down the road, are afraid to spend money they can spare.

One way or another, average Americans are going to end up paying to get this country out of its current financial bind. Billions of dollars in bailout money doled out by the government already has vanished into the coffers of banks and investment firms.

It's up to us consumers to save the day by shopping our way out of this recession as we have shopped our way out of many recent economic downturns. And, by shopping wisely and taking advantage of the terrific bargains out there, you'll at least have something to show for it.