Record crowds over weekend, but spending declined

Shoppers, on average, are expected to spend $407.02 during the four days, down 3.9 percent from last year
Associated Press
Dec 1, 2013

Did stores shoot themselves in the foot?

Target, Macy's and other retailers offered holiday discounts in early November and opened stores on Thanksgiving Day. It was an effort to attract shoppers before Black Friday, the day after Thanksgiving that traditionally kicks off the holiday shopping season.

Those tactics drew bigger crowds, but failed to motivate Americans to spend.

A record 141 million people were expected to shop in stores and online over the four-day Thanksgiving weekend that ended Sunday, up from last year's 137 million, according to the results of a survey of nearly 4,500 shoppers conducted for The National Retail Federation.

But total spending is expected to fall for the first time ever since the trade group began tracking it in 2006, according to the survey that was released on Sunday. Over the four days, spending fell an estimated 2.9 percent to $57.4 billion.

Shoppers, on average, are expected to spend $407.02 during the four days, down 3.9 percent from last year. That would be the first decline since the 2009 holiday shopping season when the economy was just coming out of the recession.

The survey underscores the challenges stores have faced since the recession began in late 2007. Retailers had to offer deep discounts to get people to shop during the downturn, but Americans still expect those "70 percent off" signs now during the uneven economic recovery.

Stores may have only exacerbated that expectation this year. By offering bargains earlier in the season, it seems they've created a vicious cycle in which they'll need to constantly offer bigger sales to get people to spend. That's because shoppers who took advantage of "holiday" deals before Thanksgiving may have deal fatigue and are cautious about buying anything else unless it's heavily discounted.

"The economy spoke loud and clear over the past few days," said Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors. "We are going to see an increase in markdowns."

Matthew Shay, president and CEO of The National Retail Federation, said that the survey results only represent one extended weekend in what is typically the biggest shopping period of the year. The combined months of November and December can account for up to 40 percent of retailers' revenue.

Overall, Shay said the trade group still expects sales for the combined two months to increase 3.9 percent to $602.1 billion. That's higher than the 3.5 percent pace in the previous year.

But to achieve that growth, retailers will likely have to offer big sales events. In a stronger economy, people who shopped early would continue to do so throughout the season. But analysts say that's not likely to be the case in this still tough economic climate.

"It's pretty clear that in the current environment, customers expect promotions," Shay said. "Absent promotions, they're not really spending."

Take Tuesday Trasvina, 37, who said she's been bombarded with holiday discounts since early November. Trasvina, a marketing coordinator, plans to spend $500 on holiday gifts, about a quarter of what she spent last year.

"They've been stretching out this Black Friday thing so long," said Trasvina, who was shopping with her husband on Friday at a Target store in Portland, Ore. "I just think the over-commercialization of the holiday has gotten to us."

At least a dozen major retailers — most of them for the first time — opened on Thanksgiving instead of on Black Friday, which is typically the biggest shopping day of the year. Wal-Mart, Toys R Us and other retailers said on Friday that Thanksgiving crowds were strong.

But the early start appeared to pull sales forward. Black Friday sales fell 13.2 percent from the previous year to $9.74 billion, according to Chicago-based technology firm ShopperTrak. But combined spending over Thanksgiving and Black Friday rose 2.3 percent to $12.3 billion compared with a year ago.

A Kmart store in New York City that opened at 6 a.m. on Thanksgiving and stayed open for 41 hour straight was packed on the holiday. Clothing was marked down 30 percent to 50 percent.

Adriana Tavaraz, 51, headed there at about 4 p.m. and spent $105 on ornaments, Santa hats and other holiday decor. She saved about 50 percent.

But it's not likely Tavaraz will be back in stores too many more times this season. Money is tight this year because of rising costs for food and rent, and Tavaraz already spent much of her $200 holiday budget.

"Nowadays, you have to think about what you spend," she said. "You have to think about tomorrow."

Comments

sugar

obamaville

The Big Dog's back

I see reading isn't your strong point.

jibber jabber

you uneducated person

sugar

I see your denial and ignorance is astounding.

toredown11

Sugar, your lack of knowledge as to why we're still living in a depressed economy is what's astounding. The U.S. economy lost 8.7 million jobs as a result of Bush's Great Recession (yes, it began in 2007 under Bush, not Obama). That's the greatest loss of jobs since the Great Depression of the 1930's. Obviously, Congress would have to act dramatically being faced with such drastic numbers, right? Wrong! Every single jobs bill that the Obama administration and congressional Democrats have brought up have been squashed by Republican blockages and filibusters. Every one! Top Republicans met the day that Obama was being sworn in for his first term and decided that they would obstruct every piece of legislation brought up by Democrats under Obama and they have stuck to their word...at the expense of the American people.

With that said, more jobs were created under the Obama administration's first four years than were created over Bush's entire eight years in office.

You can spout off about how much you hate Obama, but this isn't Fox News. Some of us actually fact check before we believe everything that is said and/or written by the Koch Brothers-backed Obama-bashers. This economy is in the state that it's in because of Bush's failed economic policies and all of the Republicans that continue to sabotage Obama's efforts to this day.

Darwin's choice

Really? Link these "facts" please!

And, these "jobs" you refer to mostly are government employees, the largest, most bloated employer in the U.S.!

Obamacare itself is responsible for 18,000 or so, all IRS agents. No where is there one doctor, nurse, or even an administrator.

What a plus for the jobs report.

Pterocarya frax...

“The trouble with the world is not that people know too little, but that they know so many things that ain’t so.” ~Mark Twain

deertracker

Say it again please!

ladydye_5

So...where do you get your "facts"? MSNBC? And the Kool-Aid drinkers? When will the "blame Bush" era end? Does the next president get to blame OBAMA for all the "inherited" problems, or does it still revert to Bush?

Contango

Re: "it began in 2007 under Bush,"

And Congress was controlled by Democrats. Both variables but largely immaterial.

The Federal Reserve's cheap money and easy credit policies were largely responsible.

Their cure: QE and ZIRP - more of the "hair of the dog," attempting to cure the hangover.

Darwin's choice

PS.....5 years and still blaming Bush.....! LOL

coasterfan

Darwin and Lady: as long as Republicans continue to blame Obama for the economic crash that occurred during the Bush administration, we Democrats have no choice but to bring you back to reality. Instead of continually trying to shift blame, why doesn't your party try being a part of the solution, for a change?

Contango

Re: "continue to blame Obama,"

Only for the worst post-war recovery in U.S. history. His policies have been detrimental.

Why is the Mkt. climbing to new heights?

The rich are gettin' richer under Pres. Obama's watch.

coasterfan

Actually, it has been Republican policies who both caused the economic disaster along with slowing the recovery. We're still waiting for Republicans to do something - anything - that would help. Instead, the party that caused millions of jobs to be lost will not pass any of Obama's jobs creation bills.

The rich are getting richer because that is the Republican way of doing things. They push for policies that continue to widen the income gap, yet (in ultimate hypocrisy) accuse Dems of 'class warfare'. Of course, what SHOULD we expect of people who have zero empathy for others?

Contango

Re: "Actually, (snip)"

"Actually" only in your ideologically narrow range of thinking.

A new paper by Obama advisor Alan Blinder and a colleague writes that the economy appears to do better under Dems due to LUCK.

http://www.washingtonpost.com/bl...

bnjjad

The rich are gettin' richer under the Congress who will not work together because the Republicans are bought with money and favors from the large corporations.

Who is the party that wants the rich to keep their money? Oh yeah! The Republicans! Don't try and blame just Pres. Obama, if he can't get anything done through congress how is he going to be responsible for the problems that are created from it.

Contango

Re: "The rich are gettin' richer under the Congress,"

Nope. The rich are gettin' richer because of the cheap money and easy credit policies of the Federal Resv.

"Nomura strategist Bob Janjuah believes this general picture of lackluster consumer spending is proof that Federal Reserve policy has increased the gap between rich and poor."

"What you've seen is that (the wealth) gap has got bigger and bigger and bigger during the six years that we've had a Democrat president."

http://www.cnbc.com/id/101241748

deertracker

Great comment coaster!!!

starryeyes83

1992 Ross Perot:

"Hear that giant sucking sound...."

Point of fact, that the jobs lost during the Bush years haven't come back. And Neither will the additional jobs loss during the last 5 years.

The best we can hope for is to stem the flow a bit.

When this country lost all of our textiles we were pretty much screwed then.

Just my little ole' humble op.

margaritaville88

LOL..I voted for ole' Perot back in the day!! He had nothing to gain and said it how it was...

Contango

Re: "But total spending is expected to fall for the first time ever since the trade group began tracking it in 2006,"

Many Americans continue to pay down debt.

http://www.usnews.com/news/artic...

Jack518

I just watched a special on the Bush administration this morning and was VERY surprised at what I learned. It was HE who put this country into the trillion dollar debt mess before leaving office because of Geitner and company by asking congress to loan money to the fat cat bankers. Bush caused this mess before leaving office and toppled this country into debt just before Obama took office. He did not want the entire world to go into a repeat of the great depression and be blamed for it so he did what he though best and bailed out his buds on wall street and the banks. Congress helped him. BAM. FACT.

We have been paying for it ever since. What is the saying? "act in haste, repent in leisure". Well we sure are. Eight years later we are still in a mess and we may not be out of it when Obama leaves. For those of you who think Obamacare is costing us a boatload of money, you are wrong. That is hype from Fox News. It isn't costing us as much as they would have you believe. Sorry folks.

It is true that this Congress is out to prevent anything from happening good for Obama. But they have shot themselves in their own feet come election time AGAIN. Not only in Congress but for President. You would have thought they would have learned.

Prediction: Hillary Clinton will win for the Democrats. There will be a majority of Democrats in the House and Senate.

This will be the Last Christmas you will see stores open on Thanksgiving. That was a HUGE mistake by the retailers. No one will give big discounts prior to Black Friday again. Too risky.
Black Friday will go back to what it was and discounts will happen only then to increase the sales. Sure thing.

Contango

Re: "Obamacare is costing us a boatload of money, you are wrong."

Why was the employer mandate delayed for one yr.?

Business is unsure how to proceed, whether to expand, hire, etc. in light of Pres. Obama's ever changing mind.

THIS is costing the U.S. economy a BOAT LOAD in lost productivity and money.

Business needs rules that don't change with every whim from the office of the POTUS.

Why is the stock mkt. setting new records?

"As the Federal Reserve keeps interest rates low and continues buying government bonds at approximately $85 billion a month, this allows corporations to borrow money inexpensively and encourages people to invest in stocks."

http://seekingalpha.com/article/...

Contango

Re: "This will be the Last Christmas you will see stores open on Thanksgiving. That was a HUGE mistake by the retailers."

Reports are that Thanksgiving was successful, though YOY Black Fri. sales were down.

It will be repeated again - with changes.

http://news.yahoo.com/thanksgivi...

Contango

Re: "loan money to the fat cat bankers."

And the Fed. Reserve continues inflating them through the primary dealers.

http://www.newyorkfed.org/market...

What's the difference?

BabyMomma

Lol

jibber jabber

--->> Check your FACTS, check your FACTS people;
Ronald reagan invented the TRADE aggreement. It was signed FIRST by George Bush at the end of his term, THEN Bill Clinton Radified it, making it LAW. At THAT point, jobs started leaving America. And continues today.
Why there is less spending, employers are just to greedy to give more hours, matter fact, employers CUT hours. Which means, less money. Has nothing to do with ObamaCare.

Contango

Re: "jobs started leaving America. And continues today."

Speaking of "FACTS," here's one:

"US manufacturing gain hits 2½-year high"

http://www.cnbc.com/id/101238845

Besides, the majority of people are employed by sm. business in the service sector and their employment has little to do with trade agreements.

deertracker

WTF ever pooh. No manufacturing jobs mean small business service/hospitality jobs. DUH! If the trade agreements had not happened there just might be some mfg. jobs!

Contango

Re: "If the trade agreements had not happened"

Coulda, woulda, shoulda.

Live in reality Sport.

So what's Pres. Obama done to reverse 'em huh?

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