As many Americans nursed full bellies on the morning after Thanksgiving, they also gave merchants an early start this holiday shopping season. While many lined stores early Friday morning, sales nonetheless fell short of Wall Street’s ambitious expectations.
Nationwide conglomerates, such J.C. Penny and Sears, Roebuck posted increased sales as they initiated a variety of special promotional offers and extended hours of operation. Wal-Mart, on the other hand, said sales were less than expected and lowered its predictions for November.
“Friday overall was strong, but Saturday was weak and disappointing, so together it was only a modest two-day performance,’’ said Michael Niemira, chief economist at International Council of Shopping Centers. ‘‘Still, I continue to believe that this is not a bellwether for how the season will end up.’’
In addition, Niemira said the first weekend of the season is not as significant as the last 10 days before Christmas and predicted a sales gain of 3 to 4 percent for the holiday period.
“I didn’t think we would have a real stellar Thanksgiving ” said UCLA Anderson School of Management Professor Michael Bazdarich and added “I don’t think we’ll have a real stellar Christmas either.”
There are a variety of reasons that underlie the caution economists are expressing over the season, including weak employment statistics and the poor weekend sales of industry-leader Wal-Mart.
‘‘Wal-Mart was a big loser because they didn’t get the same numbers of early bird shoppers as they did a year ago,’’ said C. Britt Beemer, chairman of America’s Research Group.
Officials from Wal-Mart said in their defense that they didn’t offer as many discounts as last year.
‘‘Wal-Mart is getting serious about profits, and they’re not as obsessed about market share, which means they are getting careful about sales promotions and inventories – things that impact expenses and cash flow,’’ Richard Hastings, a retail analyst at Bernard Sands said. ‘‘The retailers that won this weekend were the ones that were super aggressive in special purchases and special pricing.’’
The Best Buy located in the Village, offered a 10 percent discount on select digital cameras as well as video games for $9.99. Along with special discounts, some stores such as Marshall’s opened at 5:30 a.m. on the morning after Thanksgiving.
The combination of such marketing tactics and the fact that there aren’t any must-have apparel or toys this season, may lead to an increase in sales for stores such as Best Buy and Circuit City.
Another lucrative avenue this Christmas season may be online shopping, as companies such as Amazon.com have posted higher than expected sales.
Online sales, excluding travel, increased by 100 percent to $133 million on Thanksgiving Day compared to the same day last year, said Dan Hess, senior vice president at comScore, an Internet research company. On Nov. 26, online sales hit $250 million, up 41 percent from a year ago.
“We certainly expected a strong performance during the holiday weekend, but these are impressive figures,’’ Hess said.
For example, Melissa Payner, president and chief executive of Bluefly.com, an online merchant of discounted designer fashions and accessories, posted a double-digit increase in sales during the Wednesday through Sunday period from a year earlier.
In 2003, the online merchant attracted many consumers with a promotion on Prada handbags and wallets on Thanksgiving Day. This year, the company offered a larger variety of Prada merchandise in a bid to attract more customers.
“For the first time, we really participated in the Thanksgiving weekend,’’ Payner said. ‘‘Prior to that, there was a belief that customers just went to the stores.’’
But, with all the hopeful predictions and statistics being thrown around, UCLA students may still be less than eager to spend.
Factors such as increasing student fees and fuel prices may lead students to be more cautious this holiday season, UCLA economists say.
“Underneath it all, we’ve got a consumer sector that’s pretty heavy in debt,” said Bazdarich, who is also a senior economist for the UCLA Anderson Forecast.
In addition to consumer debt, factors such as slow job growth and rising fuel prices have led to Bazdarich’s prediction that this holiday season won’t be as lucrative as some on Wall Street would hope.
“Retailers make most of their money this season so they want the predictions to be good. We just have to see what happens when the dust settles,” he added.
And in terms of using the holiday shopping season as an indicator for economic strength of 2005, Bazdarich said there is little point in doing so.
With reports from Bruin wire services.