Holiday shoppers stick to bargains
Last Updated: Monday, November 30, 2009 | 08:02 PM EST
Financial Post
NEW YORK -- The U.S. holiday shopping season is poised to be lacklustre as U.S. consumers seem only willing to pry open their wallets for bargains.
The number of shoppers to hit stores and online sites jumped over the weekend, including on Black Friday – the day after U.S. Thanksgiving that marks the unofficial U.S. start to the crucial Christmas shopping season — through Sunday.
With worries about the economy and pink slips, however, shoppers aren’t spending as much money this year.
According to the National Retail Federation, 195 million shoppers visited stores and Web sites over Black Friday weekend, up from 172 million last year. But the average amount shoppers spent fell to US$343.31 a person, down from US$372.57 a year ago.
“People are going for bargains,” said Jacob Jacoby, a consumer research expert in New York. “Retailers are going to be forced to have earlier sales and more sales than they did last year.”
Confirming the focus on bargains, 43% of shoppers over the weekend browsed the aisles of Wal-Mart Stores Inc., home of the discount. The consumer frugality comes as the United States enters its second Christmas in a row with a sputtering economy, while unemployment is at a 26-year high.
“Things are still unsettled in a lot of consumers’ minds,” said Mr. Jacoby. “I can’t remember a gloomier period and I’m two months shy of 70.”
A record number of shoppers were expected to turn out for Monday’s Cyber Monday.
That’s the online equivalent of Black Friday. The NRF forecast that the number of consumers who planned to shop online Monday jumped to 96.5-million, up from 85-million last year. But similar to Black Friday, most shoppers were only interested in deep discounts.
To woo Internet shoppers, nearly nine out of 10 retailers planned to have a special promotion for Cyber Monday, up from 83.7% last year and 72.2% in 2007, according to an NRF survey.
Shares of Amazon, which doesn’t own any brick-and-mortar stores, surged Monday as investors bet the e-tailer would see a big jump in sales. Its stock gained more than 3% to a record high of US$135.91 a share. The company said its Kindle electronic book reader posted a record sales month in November.
With their laser-like focus on bargains, consumers seem to be sticking to the items on their shopping lists, leaving little room for impulse purchases that often drive retail sales.
“Consumers are spending less time browsing retailers’ sites, suggesting research prior to Black Friday and shopping from lists,” Brian Pitz, a retail analyst with UBS, wrote in an eCommerce report sent to clients yesterday.
He noted that ahead of Cyber Monday page views were down 30% each session a consumer spent on line, while the number of people who left a site after viewing one page – known as the “bounce” rate in ecommerce lingo – jumped 40%.
The Standard & Poor’s Retail index slipped Monday on investor disappointment that sales weren’t more robust over the weekend.
Despite the lacklustre demand, many retailers might end up posting their best profit increases in years because they’re carrying lean inventory.
Discounters will probably fare the best.
According to another research report from UBS, 49% of consumers spent at discounters over the long holiday weekend, up from 36% last year. Only 23% shopped at department stores, down from 32%, while 10% shopped at electronics stores versus 13% last year.
jwhitman@nationalpost.com
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