U.S. holiday sales view still weak after weekend rush

Early results from the Black Friday weekend that kicks off U.S. holiday shopping showed that sales grew both in stores and online, fueled by repeat trips, heavier online sales and deep discounts from retailers across the price spectrum.

Investors may look positively on the data when retail shares begin trading again on Monday, viewing it as a sign that consumers are still spending despite the worst financial crisis since the Great Depression.

But industry groups and analysts said the Black Friday numbers did not change their view that 2008 will be the weakest holiday sales season in years.

“We take all of this into context and realize Black Friday is not going to save the holiday season,” National Retail Federation spokeswoman Ellen Davis said. “Regardless of retail sales, retail profits are another matter. Everything they sold was at a razor-thin margin.”

According to the NRF survey, shoppers said they spent an average of 7.2 percent more per person at nearly US$373 during the four-day holiday weekend from U.S. Thanksgiving on Thursday through Sunday. Total spending was US$41 billion.

More than 172 million shoppers said they visited stores and websites during that time, up from 147 million a year ago, the NRF said. Excluding repeat visits, the number of people who said they shopped over the weekend rose to 110 million from 99.5 million.

The NRF kept its forecast for total holiday sales growth of 2.2 percent to US$470.4 billion, which would make 2008 the weakest holiday season in six years. Other analysts have forecast sales could be their weakest in nearly two decades.

The NRF said consumers completed more of their shopping during the Black Friday weekend this year than in the past. Momentum is likely to drop sharply in the coming weeks and stores may need to offer even more aggressive discounts.

The NRF data comes from a poll of 3,370 consumers conducted by BIGresearch from Thursday through Saturday and includes consumers’ shopping plans for Sunday.

Investors “may see (the weekend’s data) as supportive of some stability in the consumer, but we believe that is not the case,” said Richard Hastings, a consumer strategist with Global Hunter Securities LLC, Hastings.

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