Tue, Dec 02, 2014 - Page 15 News List

Black Friday fizzles as retail sales tumble by 11 percent

HOLIDAY HUSTLE:US consumer spending slid during the sales extravaganza, putting pressure on retailers ahead of the year-end holiday season, an industry group said

Bloomberg

Even after doling out discounts on electronics and clothes, US retailers struggled to entice shoppers to Black Friday sales events, putting pressure on the industry as it heads into the final weeks of the US holiday season.

Spending tumbled an estimated 11 percent over the weekend, the Washington-based National Retail Federation said on Sunday.

Additionally, more than 6 million shoppers who had been expected to hit stores never showed up.

Consumers were unmoved by retailers’ aggressive discounts and longer Thanksgiving holiday hours, raising concern that signs of recovery in recent months will not endure.

The industry group had predicted a 4.1 percent sales gain for last month and this month — the best performance since 2011. Still, the trade group cast the latest numbers in a positive light, saying it showed shoppers were confident enough to skip the initial rush for discounts.

“The holiday season and the weekend are a marathon, not a sprint,” federation chief executive Matthew Shay said on a conference call. “This is going to continue to be a very competitive season.”

Consumer spending fell to US$50.9 billion over the past four days, down from US$57.4 billion last year, according to the federation. It was the second year in a row that sales declined during the post-Thanksgiving Black Friday weekend, which had long been famous for long lines and frenzied crowds.

Retailers rolled out their usual “door buster” specials in a bid to lure customers. Wal-Mart Stores Inc sold an RCA tablet for US$29, DVD movies for US$1.96 each and a 50-inch high-definition television for US$218. Best Buy Co had a 55-inch Samsung 4K television for US$899, hundreds less than its usual price.

Even so, many shoppers stayed home. The federation had predicted that 140.1 million customers would visit retailers this past weekend, a small decline from last year’s 140.3 million. Instead, just 133.7 million showed up.

An effort by some retailers to put items on sale ahead of Thanksgiving might have contributed to sluggish demand on “Black Friday,” Shay said.

The slower foot traffic means retailers will have to wring more money from consumers this month, including during yesterday’s “Cyber Monday” e-commerce blitz. Holiday shopping is key for US retailers — with sales in November and December accounting for about 19 percent of annual revenue, according to the federation — and more of that is shifting online.

The Web might not be a savior for traditional retail, though. While e-commerce orders are growing, they are still dwarfed by brick-and-mortar sales. The novelty of Cyber Monday also is dimming: The number of shoppers participating in the event yesterday was projected to decline.

So far, holiday shoppers have spent US$22.7 billion online this season, up 15 percent from a year earlier, according to ComScore Inc. That includes more than US$1.5 billion on Black Friday.

The e-commerce growth means shopping malls have to work harder to get people in the door. The University Town Center — a brand-new mall in Sarasota, Florida — was only moderately busy on Saturday evening, with more customers in the corridors than in the stores.

Ariana Bravo, a 16-year-old student from Lakewood Ranch, Florida, said she used her employee discount at Pacific Sunwear to buy a couple of small items, but was not lured by any promotions.

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