Lured by widespread sales and discounts, consumers began the holiday shopping season and ventured to stores Friday in most parts of the country with rekindled consumerism.
The potentially sparkling start to the season was dulled, however, by sluggish traffic in the nation's shopping capital, New York, and fear that consumer interest could be sustained only with profit-murdering prices.
PHOTO: NY TIMES
Post-Thanksgiving incentives are now part of the holiday shopping landscape. But this year retailers came into the season scared, and discounts are both widespread and deep. About 15 percent more merchandise in stores is marked down than last year, according to John Morris, a retail analyst for Gerard Klauer Mattison, who keeps a sales index.
Economists and merchants alike are watching closely to see if American consumers will help pull the economy out of recession. Consumer spending accounts for about two-thirds of the nation's domestic output, and the holiday season is when consumers spend the most and have the greatest effect on economic growth.
Though stores around the country were full Friday, shoppers seemed focused on the ubiquitous sales, and many said they planned to spend less this year. Even those whose shopping bags were full seemed to strike a note of restraint.
"We're trying to tone it down a little," said Barbara Ruane, of Annandale, New Jersey, who was buying a sweater for her daughter at the Bridgewater Commons mall in Somerset County. This year we are only buying "things on sale and only things that everyone needs. Nothing frivolous," Ruane said.
Some who braved the lines before dawn Friday said they were motivated by patriotism.
"I want to go shopping to help the economy," said Steve Wood, 29, a sales representative from Colbert, Georgia, who already had a shopping cart full of toys by 6:15am at the Toys "R" Us store in Athens, Georgia, including an Easy Bake Oven marked down to US$9.99 from US$19.99.
Still, most consumers seemed to be there because they sensed a deal.
Judy Bannister, of Boston's South End, said she usually avoids the stores on the day after Thanksgiving, but she could not resist an offer she saw on full-size comforters: US$20 each. Friday she walked out of Macy's in Boston with four of them.
Bargain hunting
Ed Osgood, 49, of Cape Cod, Massachusetts, who was waiting for his wife outside the same store Friday morning, apparently thought the bargains were so good that he felt compelled to point them out to passers-by. "Look, you pay a quarter, and you get US$10," he said, pointing to a US$10 off coupon for Macy's in a local newspaper. "I've got two of them."
The day after Thanksgiving is known as Black Friday because it is the start of the season that usually moves retailers from the red into the black. So it is widely watched as the first gauge of the health of the retail industry in this make-or-break season.
As the season started, predictions for holiday sales tended to be on the grim side. Some of the most optimistic predictions came from the National Retail Federation, which said apparel and general merchandise purchases -- everything from furniture to music CDs -- would increase as much as 3 percent. Others were decidedly less ebullient. The annual retail survey by American Express, for example, found that consumers planned to spend 7 percent less than last year.
In recent weeks, American consumers have received a lot of help in the pocketbook department. Fuel prices have dropped, low mortgage rates on houses have touched off a wave of refinancing, and the last of the federal tax rebate checks arrived. The question now is whether such gains will offset fears of layoffs, especially among those consumers who are employed and could, if they wanted to, spend as much as last year.
"The customer has the means. What we are watching now is do they have the will," said Carl Steidtman, chief economist at Deloitte Research, who remains pessimistic.
Economic concerns
The state of the economy was on the minds of many shoppers.
Anne Miller, 32, an occupational therapist and mother of two from Littleton, Colorado, said that although she was not directly affected by layoffs, she was concerned about her husband's job in construction. "I was a little more reserved this year," she said. "I know what my limits are."
The obsession with the economy is not good news for New York, which is known for indulging the world's most cosmopolitan and well-heeled shoppers. The terrorist attacks of Sept. 11 have devastated tourism, the source of much retail spending in the city, and layoffs on Wall Street are dampening the enthusiasm of other affluent shoppers.
The city's troubles are bad news for already embattled department store chains like Saks Fifth Avenue and Bloomingdale's, whose fortunes depend heavily on sales at their Manhattan stores.
There were markdowns in New York, of course. At Bloomingdale's, large rectangular red and black banners hanging from the ceiling announced savings of 20 percent to 50 percent throughout the store. Brooks Brothers, near Rockefeller Center, had a sale for buy one shirt and get the second one 40 percent off. At Kenneth Cole, customers were given 30 percent off selected items -- a creamy brown leather jacket, normally US$460, was reduced to US$299.90.
But shoppers seemed more scarce this year than last.
"The New York business is really difficult," said Michael Gould, the president of Bloomingdale's, a division of Federated Department Stores. "You still have the problem of the tourists not coming."
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