Holiday sales view still weak after weekend rush

Sun Nov 30, 2008 5:07pm EST
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By Martinne Geller

NEW YORK (Reuters) - Consumers made repeat trips to U.S. stores to seek bargains as holiday shopping kicked off this weekend, but an early rush is unlikely to save what is shaping up to be a bleak sales season, analysts said on Sunday.

Early results from the Black Friday weekend showed that sales grew both in stores and online, fueled by repeat trips, heavier online sales and deep discounts from retailers.

According to the National Retail Federation (NRF), shoppers spent an average of 7.2 percent more per person to nearly $373 during the four-day holiday weekend from U.S. Thanksgiving on Thursday through Sunday. Total spending was $41 billion.

More than 172 million shoppers visited stores and websites during that time, up from 147 million a year ago, the NRF said. Excluding repeat visits, the number of people who shopped over the weekend rose to 110 million from 99.5 million a year ago.

But the NRF kept its forecast for total holiday sales growth of 2.2 percent to $470.4 billion, saying consumers had done more of their shopping in the Black Friday weekend in the past. Momentum is likely to drop sharply in the coming weeks and stores may need to offer even more aggressive discounts.

"We take all of this into context and realize Black Friday is not going to save the holiday season," NRF spokeswoman Ellen Davis said. "Regardless of retail sales, retail profits are another matter. Everything they sold was at a razor-thin margin."

Richard Hastings, a consumer strategist with Global Hunter Securities LLC, said Wall Street may take the weekend's results as a positive sign that consumers are still spending.

Investors "may see (the weekend's data) as supportive of some stability in the consumer, but we believe that is not the case," Hastings said.   Continued...

<p>A woman shops at a Walmart store on "Black Friday" in Oakland, California, November 28, 2008. REUTERS/Kimberly White</p>