NEW YORK (Reuters) –
U.S. consumers kicked off the holiday shopping season on Friday, with a strong turnout for early-morning bargains, though many said they were being more selective about what they buy and paring back what they spend.
Black Friday, the day after U.S. Thanksgiving, is often the single busiest shopping day of the holidays, which accounts for nearly one-fifth of the retail industry's annual sales. Last year, retailers posted the worst performance in nearly four decades after the start of a global financial crisis.
Industry experts caution that heavy traffic this weekend may not trigger a major rebound for the economy as shopping can drop off again until just before Christmas.
On Friday, shoppers tended to be out more for business than sport.
"I have to get a laptop for my daughter," said Nate Bryan, who stood on line outside a Best Buy Co store in Springfield, Pennsylvania. "It's normally $1,000 and now cut in half. That $500 can go to other things."
Jefferies & Co retail analyst Randal Konik, who visited a Long Island, New York, outlet center at midnight, said store traffic was heavier, while promotions of 20 to 40 percent off were more prevalent than the discounts of 50 percent or more seen in 2008.
Linda Stone showed up early at the Southpark Mall in Charlotte, North Carolina, with her friends, who have made Black Friday trips a group tradition.
"There's more people than we've ever seen," she said. "I think there's more people up and around hunting for those deals because of the economy and where a lot of folks are now."
Retail stocks, as measured by the Standard & Poor's Retail Index, were down 0.9 percent on Friday morning, slightly better than a 1.4 percent decline for the wider S&P 500. Retail shares had surged 47 percent this year on hopes a consumer-led recovery would take hold.
For a graphic on U.S. holiday sales trends, click on http://graphics.thomsonreuters.com/119/US_RTLXMS1109.gif
For a Reuters Insider segment on holiday sales, click on http://link.reuters.com/wuj63g
CONTROLLED CROWDS
Up to 134 million U.S. consumers say they may shop for holiday gifts this weekend from Black Friday through Sunday, according to the National Retail Federation.
Discount retailers like Wal-Mart Stores Inc and Target are expected to see the heaviest traffic over the holiday weekend, followed by department store chains like Macy's and Kohl's.
Konik recommends specialty retail stocks, and said his top holiday picks were Abercrombie & Fitch Co, Coach Inc, Gap Inc and Urban Outfitters Inc.
Last year's frenzied bargain-hunting led to the death of a Walmart worker in Valley Stream, New York, after shoppers broke down doors to enter the store at 5 a.m.
Early-morning shoppers came out in force this year as well, but the environment was more controlled.
"This year it was all about knowing what you were going to find before you walked in the door," said Marshal Cohen, senior analyst at retail consultancy NPD Group. "The chaos and frenzy has been eliminated. Now it's a serious business opportunity and a serious savings opportunity for the consumer."
Debbie Techac, who spent more than 12 hours outside a Best Buy store in Phoenix, Arizona, said she planned to buy a Dyson vacuum cleaner reduced to $329 from $549, two laptops and some DVDs.
TEPID SALES, BETTER PROFITS
The unsettled state of the U.S. economy, with a 26-year high in unemployment and tighter access to credit, has industry holiday sales forecasts varying widely from a decline of 3 percent to an increase of 2 percent.
But retail chains are expected to show much better profits from a year ago, after closing underperforming stores, scaling back new openings and shrinking inventories. That helps prevent stores from getting stuck with unsold merchandise and using deep discounts to unload it.
Macy's Inc CEO Terry Lundgren said retailers should have a decent holiday performance in 2009.
"That's very different than last year," Lundgren told cable business channel CNBC. "Last year we were falling off a cliff, grabbing for branches on the way down."
Shoppers say they have also learned a lesson from previous years of easy credit and carefree spending, and are now purchasing more within their means.
"I'm buying whatever I can get a great deal on — cameras, TVs, toys," said Jimmy Johnson, who arrived at a Springfield, Pennsylvania, Target store at midnight.
He added he would not be using any credit cards this year.
"Straight cash, homie, straight cash. I don't have to worry about paying it back. Use your own money and you earn it and you spend it."
(Additional reporting by Tom Hals in Springfield, Pennsylvania, Joe Rauch in Charlotte and Tim Gaynor in Phoenix; Editing by Michele Gershberg and Matthew Lewis)
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