Molly Jones, a 31-year-old mother of two from Cincinnati, didn’t have a job a year ago, forcing her to cut back on holiday shopping. That has changed after recently being hired by an insurance company.
“Because last year was so hard I want to do some extra shopping for my kids,” said Jones, who started her shopping spree at Gap Inc.’s Old Navy chain yesterday and then camped outside a Target Corp. store to buy a television. “It’s on.”
From Mall of America in Bloomington, Minnesota, to The Galleria in Houston, retailers unleashed a blizzard of deals as Black Friday -- the biggest shopping day of the year -- got off to its earliest start ever. The discounting has been more widespread than last year as retailers tried to woo shoppers spooked by global economic uncertainty and stagnant job growth.
“It’s a good sign that the consumer is coming out, and that all the distractions didn’t sway the consumer from having a good holiday,” said Marshal Cohen, an analyst at Port Washington, New York-based NPD Group. Shoppers were spending about the same as last year, said Cohen, who visited stores in New York, Connecticut and New Jersey.
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.
Sales at brick-and-mortar stores may rise 2.8 percent -- compared with 5.2 percent last year -- to $465.6 billion this holiday season, according to the National Retail Federation. Online revenue may advance 15 percent to $37.6 billion, according to ComScore Inc.
Those forecasts reflect shoppers’ resilience so far this year. Consumer spending, which accounts for about 70 percent of the U.S. economy, has increased for 16 consecutive months through October as the economy added jobs and avoided slipping into another recession.
Industrywide monthly same-store sales, a key indicator for retailers 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.
Black Friday -- so named because that’s when many stores become profitable -- continued to bite into Thanksgiving this year. Many chains ignored complaints that it was unfair to have employees work on the holiday and opened their doors earlier. Online retailers, such as Amazon.com Inc., joined in too and began advertising “Black Friday” deals well before today.
The earlier start brought a lot of first-time Black Friday shoppers and that will boost sales for retailers that pushed up openings, Cohen said.
Black Friday Rookies
“It’s amazing how many people said they normally wouldn’t be in these lines, but because of these hours they are new to the Black Friday shopping frenzy,” Cohen said. “There were a lot of rookies.”
Gap, based in San Francisco, boosted the number of stores open on Thanksgiving to about 1,000, most of them Old Navy locations, which were offering women’s coats for as little as $14.75, or about 50 percent off, and scarves of red and blue for $5, down from $7.94.
An Old Navy store in Greensboro opened at 9 a.m. on Thanksgiving, attracting Paula Pile, a marriage counselor. She shopped for socks, pajamas pants and a $19 vest for her granddaughter, before heading to dinner with family.
By opening on Thanksgiving, Old Navy “is picking up my business,” said Pile, 57. “I am not one to get up in the middle of the night and go stand in line.”
Toys “R” Us Inc. opened at 10 p.m. last year, and it pushed that up one hour. Wal-Mart Stores Inc., which has been open on Thanksgiving for years, moved its opening forward two hours to 10 p.m. Among the Bentonville, Arkansas-based retailer’s deals: Mattel Inc. Barbie dolls for $5. Best Buy, based in Richfield, Minnesota, opened five hours earlier than last year.
“I don’t think you can have a scenario where major retailers you’re competitive with are open and you are not,” Mike Vitelli, co-president of Best Buy’s North American division, said in an interview on Nov. 23.
Top-selling items this weekend may be Apple Inc.’s iPod Touch, jackets from VF Corp.’s North Face brand and Leapfrog Enterprises Inc.’s LeapPad Explorer, according to comparison shopping website Pricegrabber.com.
As many as 152 million people will shop at stores and websites on Black Friday, up 10 percent from last year, according to the Washington-based NRF. Last year Americans spent $19.3 billion on Black Friday and may break the $20 billion mark this year, owing to the longer opening hours and more online promotions, according to Purchase, New York-based MasterCard Spending Pulse.
--With assistance from Chris Burritt in Greensboro. Editors: Robin Ajello, Steven Frank, James Callan
To contact the reporters on this story: Matt Townsend in New York at firstname.lastname@example.org; Ashley Lutz in New York at email@example.com
To contact the editor responsible for this story: Robin Ajello at firstname.lastname@example.org
© Copyright 2014 Bloomberg News. All rights reserved.