By Matt Townsend and Cotten Timberlake - Nov 27, 2011 12:00 PM GMT+0700
Black Friday sales increased 6.6 percent to the largest amount ever as U.S. consumers shrugged off 9 percent unemployment and went shopping.
Consumers spent $11.4 billion, ShopperTrak said in a statement yesterday. Foot traffic rose 5.1 percent on Black Friday, according to the Chicago-based research firm.
“This is the largest year-over-year gain in ShopperTrak’s National Retail Sales Estimate for Black Friday since the 8.3 percent increase we saw between 2007 and 2006,” ShopperTrak founder Bill Martin said in the statement. “Still, it’s just one day. It remains to be seen whether consumers will sustain this behavior through the holiday shopping season.”
The brisk turnout came as retailers from Gap Inc. (GPS) to Wal- Mart Stores Inc. (WMT) to Toys “R” Us Inc. opened their doors earlier than ever. The move to turn Black Friday into more than just one day also spurred online sales, which gained 39 percent on Thanksgiving and 24 percent on Black Friday, according to International Business Machines Corp.’s Coremetrics.
Many shoppers were rookies who had never before participated in the busiest shopping day of the year, dubbed Black Friday because many retailers are said to become profitable then. As many as 152 million people were expected to shop at stores and websites on Black Friday, up 10 percent from last year, according to the National Retail Federation.
Macy’s Inc.’s (M) Chief Executive Officer Terry Lundgren said he was struck by how many people in their 20s descended on the chain’s flagship store in Manhattan.
“It was almost a continuation of whatever social experience they were having hours before,” he said.
Consumer Sentiment
Black Friday arrived with consumer sentiment at levels previously reached during recessions, as a record share of households said this is a bad time to spend, according to the Bloomberg Consumer Comfort Index. The measure has reached minus 50 or less in nine of the past 10 weeks, an unprecedented performance in its 26-year history.
Even with low confidence, shoppers paid more for goods and unleashed some pent-up demand, said Craig Johnson, president of consulting firm Customer Growth Partners, which is based in New Canaan, Connecticut.
Many shoppers are in the mood to buy for themselves. One is Kevin Fusting. While most of his gift budget will go to video games for his 10- and 12-year-old sons, Fusting, a 46-year-old oriental rug seller from Chevy Chase, Maryland, may buy himself a present this year: a Sony Corp. digital camera.
“I am not getting any younger,” he said, explaining the temptation.
Full Price
Stacey Carfi, a 32-year-old controller visiting Washington from Charleston, South Carolina, is treating herself, too. She paid full price for two pairs of pants -- one for herself -- and a key ring at Michael Kors and Lululemon Athletica Inc. (LULU) She planned to buy herself shoes this holiday, too.
“It is the season for buying, so why not get in on that?” Carfi said.
Sales at brick-and-mortar stores may rise 2.8 percent to $465.6 billion this holiday season, slower than the 5.2 percent gain last year, according to the Washington-based NRF. Online revenue may advance 15 percent to $37.6 billion, according to ComScore Inc.
Not all shoppers planned to spend more this holiday season. Tanya Taylor, 39, bought clothes for herself at a San Diego Macy’s, and planned to spend 50 percent less this year because she’s getting less work as a freelancer in the beauty industry.
‘A Win’
Chains such as Macy’s, Target Corp. (TGT) and Kohl’s Corp. (KSS), which all opened at midnight, may have taken revenue from competitors like J.C. Penney Co. (JCP) that didn’t open until 4 a.m., according Ken Perkins, president of Swampscott, Massachusetts-based Retail Metrics.
“It was a win for them,” said Perkins, who visited stores in Boston. “The additional costs of staying open a few more hours will be more than offset by the traffic they brought in and probably taking some market share.”
Macy’s early start prompted many malls to open at midnight. That helped boost foot traffic at Walt Disney Co.’s namesake stores because Cincinnati-based Macy’s is the anchor tenant in the malls that house most of its locations, said Jim Fielding, president of Disney Stores Worldwide. Sales at Disney Stores met expectations by rising high-single percentage points, Fielding said.
Free Slippers
The extended hours drew Amanda Rottmueller, a 20-year-old nursing student, to Black Friday for the first time as she bought herself bras and pajamas that came with a free pair of slippers from Limited Brands Inc.’s Victoria’s Secret at the Tri-County Mall in Cincinnati.
“The deal is just too good, and I can get something really nice I wouldn’t be able to afford otherwise,” she said.
Black Friday may illustrate a gap between what consumers tell pollsters and how they actually behave -- a trend that has prevailed for much of this year, said Retail Metrics’ Perkins. Industrywide monthly same-store sales, a key indicator for retail growth because new and closed locations are excluded, have gained for more than two years and missed analysts’ projections once this year, according to Retail Metrics.
“A solid Black Friday suggests the rest of the season should be pretty good,” Perkins said. “Those who have jobs have been willing to spend.”
To contact the reporters on this story: Matt Townsend in New York at mtownsend9@bloomberg.net; Cotten Timberlake in Washington at ctimberlake@bloomberg.net
To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net
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