Retail sales on Black Friday rose by their biggest margin since 2007 to set a record, while online sales grew even faster, according to initial estimates.
Sales on the frenetic shopping day that follows the U.S. Thanksgiving holiday expanded 6.6 per cent from the previous year to $11.4-billion (U.S.), according to research group ShopperTrak. The group’s estimates are based on traffic counts in 25,000 places and the historical relationship between traffic and sales.
Black Friday marks the official start of the end-of-year shopping season, which is a make-or-break period for many retailers struggling to defend market share and secure profits amid intense competition in a weak economy.
Online sales expanded 24.3 per cent from last year, according to the Coremetrics benchmark calculated by IBM, which captures online sales from more than 500 retailers. The sharp jump came as traditional retailers boosted their online efforts to compete with Internet-only rivals at a time when smartphones have made consumers more comfortable shopping online.
ShopperTrak’s estimates were “surprising” given the economic situation but probably reflected a slight fall in job insecurity in recent weeks, said founder Bill Martin. Retailers did a “tremendous amount” of discounting and marketing, he added.
“We believe the U.S. consumer has seen some level of stability in [their]own jobs and therefore it looks like they’re willing to spend when they perceive they’re going to get good value,” Mr. Martin said.
ShopperTrak said the number of people in stores rose 5.1 per cent from last year. But concrete data are still unavailable for how many items shoppers bought and whether they snapped up anything other than heavily discounted goods.
Before Black Friday, the National Retail Federation forecast that holiday spending this year would rise by 2.8 per cent to $466-billion.
Terry Lundgren, chief executive of Macy’s Inc. , said the department store had seen “really strong numbers early on” at its Manhattan flagship, with traffic up 15 per cent from at its 4 a.m. opening in 2010.
Macy’s opened at midnight this year, and the early opening had attracted “a young consumer, an international consumer,” Mr. Lundgren said.
Near the Minnesota headquarters of electronics retailer Best Buy Co. Inc. , chief executive Brian Dunn said the store’s midnight opening had drawn in many families who were “very enthusiastic.”
Meanwhile, Jerry Storch, chief executive of Toys “R” Us Inc., said he witnessed long lines of people “in celebratory mood” at the toy store’s midnight openings across the country.
“Christmas always comes and parents are going to buy holiday presents for their kids,” he said. “They’ll cut back on luxuries for themselves and on capital expenditure before they cut back for the kids.”
The estimated Black Friday sales growth was the biggest since an 8-per-cent year-on-year increase in 2007. The following year, sales fell 0.9 per cent, before rising 4.8 per cent in 2009 and 0.3 per cent last year.
Black Friday was marked this year by the precision promotions of retailers – offering very deep discounts on a limited number of items – and the surge of smartphone shopping, said Laura Gurski, global head of retail at consultancy AT Kearney.
“People had their phones out and were checking prices right there standing in line to pay,” she said.