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US retailers face bleak sales season
Tue, Dec 02, 2008
Reuters

AMERICAN consumers made repeat trips to the stores and spent more on bargains last weekend, but the early rush is unlikely to save retailers from a bleak sales season, analysts said on Sunday.

Early results from the Black Friday weekend that kicks off holiday shopping in the United States showed that sales grew both in stores and online, fuelled by repeat trips, heavier online sales and deep discounts from retailers across the price spectrum.

Investors may view the data as a sign that consumers are still spending despite the financial crisis. But industry groups and analysts said the numbers did not change their view that this year's holiday-sales season will be the weakest in years.

Said National Retail Federation (NRF) spokesman Ellen Davis: 'Regardless of retail sales, retail profits are another matter. Everything they sold was at a razor-thin margin.'

Shoppers said they spent an average of 7.2-per-cent more per person at nearly US$373 (S$569) during the four-day holiday weekend from US Thanksgiving last Thursday to Sunday.

Total spending was US$41 billion. More than 172 million shoppers said they visited stores and websites during that time, up from 147 million a year ago, the NRF survey said.

Excluding repeat visits, the number of people who said they shopped over the weekend rose to 110 million from 99.5 million.

The NRF kept its forecast for total holiday-sales growth of 2.2 per cent at US$470.4 billion, which would make this year's holiday season the weakest in six years.

The NRF said consumers completed more of their shopping during the Black Friday weekend this year than in the past. Momentum is likely to drop sharply in the coming weeks and stores may need to offer more aggressive discounts.

The NRF data comes from a poll of 3,370 consumers conducted by BIGresearch from last Thursday to Sunday.

Investors 'may see (the weekend's data) as supportive of some stability in the consumer, but we believe that is not the case', said consumer strategist Richard Hastings at Global Hunter Securities.

In a separate survey conducted by America's Research Group, 38 per cent of 809 respondents said they spent less this weekend than a year ago, while 18.9 per cent said they spent more.

'There's no way retail sales could be up when twice as many consumers spent less than more,' said group founder and chief executive Britt Beemer.

 

 
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