A not-too-dismal start for retailers
Holiday sales better than predicted, but momentum is likely to slow
Retail sales for the first two days of the holiday shopping season were better than expected, even though Black Friday itself showed the smallest gain in three years and Saturday's sales were about flat from a year ago.
Retailers rang up $16.6 billion in sales for Friday and Saturday, up 1.9 percent compared with the two days after Thanksgiving last year, market research firm ShopperTrak RCT reported yesterday. Sales on Black Friday rose 3 percent to $10.6 billion, and Saturday's fell nearly 1 percent to $6 billion.
ShopperTrak plans to release Sunday sales tomorrow, and spokesman Aaron Martin expects results will show that spending dwindled each day for the three-day weekend. The firm expects stores to post a record low 0.1 percent sales gain for the entire holiday shopping season, which runs from Thanksgiving to Christmas.
"I was encouraged," said Madison Riley, a partner at retail consultancy Kurt Salmon Associates who observed shoppers on Friday and Saturday at stores in Framingham and at the Natick Collection. "The expectation has been one of doom and gloom."
Friday's fleeting discounts - such as half-price laptops at Best Buy and shirts for one-third their regular price at Old Navy - attracted heavy foot traffic nationwide, according to ShopperTrak, which pulls data from crowd-counting devices installed at more than 50,000 retail outlets and malls nationwide. But the Northeast lagged behind other regions in the country in annual gains in foot traffic, inching up only 2.6 percent compared with last year's Black Friday; traffic rose 2.7 percent in the West, 3 percent in the Midwest, and 3.4 percent in the South.
On Sunday, the National Retail Federation projected more than 172 million shoppers visited stores and websites between Thanksgiving and Sunday, up from 147 million shoppers last year. Its survey shows after-Thanksgiving weekend shoppers on average spent $372.57 each, up 7.2 percent over last year's $347.55, to rack up an estimated total of $41.0 billion in sales.
Locally, at Cambridgeside Galleria, foot traffic and car counts in the parking lot were each up about 3 percent, said general manager Issie Shait.
"Most of the stores we spoke with had a very good Friday, typically beat last year in low single digits. They were flat Saturday and Sunday," he said. "Considering everything with the economy and what's happened, I was pleasantly surprised with how strong the traffic was. I think in general if we are close to last year, that's a positive sign for us."
Many retailers depend on holiday shopping for the bulk of their annual profits, and Black Friday, the day after Thanksgiving, is historically when stores turn a profit.
Analysts say deep discounts drew shoppers in over the weekend, but retailers will probably need to continue to offer such deals to keep them shopping. The implications for retailers that don't attract customers can be dire: They could go out of business. And that's bad for the overall US economy, which yesterday was officially declared to have been in a recession for a year.
"A bad holiday means that a number of retailers are not likely to be in business next year," said Todd Slater, a specialty retail, apparel, and footwear analyst at Lazard Capital Markets. "It means some factories overseas will shut down. We're already starting to see that occur."
To attract shoppers, analysts say retailers will likely need to promote new sale items earlier and more often than in years past. Old Navy, for example, is featuring different doorbuster deals every week.
"Many retailers promoted more aggressively than last year," which will likely result in lower profit margins, Slater said. "It's a rose to consumers and obviously a thorn for many retailers."
Some shoppers, like Fernando Oliveira of Everett, plan to wait for the deals to do their holiday shopping. "I usually do that last minute," he said. It's "just the way things work out."
And a greater number of consumers planned to avoid store crowds altogether by purchasing presents online yesterday, on what's known as Cyber Monday. A survey conducted for Shop.org between Thanksgiving and Saturday projected 84.6 million consumers nationwide expected to shop online yesterday, up from 72.0 million in 2007 and 60.7 million in 2006.
Jenifer McKim of the Globe staff contributed to this report. Nicole C. Wong can be reached at nwong@globe.com. 