Ed Betz  /  AP file
Shoppers rushed to enter a Wal-Mart in South Setauket, N.Y., shortly after the store opened at 5 a.m., Friday.
By John W. Schoen Senior producer
msnbc.com
updated 11/28/2005 4:25:24 PM ET 2005-11-28T21:25:24

Despite initial worries about higher energy prices and jittery consumers, the retail industry got off to a strong start over the weekend. Heavy promotion of “early bird” specials touched off stampedes of shoppers busting down the doors, in some cases, before sunrise.

But the holiday shopping season still has a long way to go. Sales results for the weekend overall were mixed. And if foot traffic slows in the coming weeks, expect to see even bigger discounts: good news for shoppers, but bad news for the industry’s bottom line.

Die-hard shoppers eager to snap up limited “door buster” specials produced an initial rush in the early hours of “Black Friday” – the traditional opening day of the holiday shopping season. But there were signs that the Thanksgiving shopping weekend faded in the final stretch. The retail research firm ShopperTrak reported that traffic dropped off on Saturday, and that the combined sales for Friday and Saturday slipped to $13.4 billion – down a half a percent from a year ago.

"There was a lot of hype, a lot of promotions and lot of people, but the results were on the lukewarm side," said Michael Niemira, chief economist at the International Council of Shopping Centers, estimating that the weekend's sales results were down from a year ago. Heavy markdowns forced retailers to sell more goods in order to meet sales targets, he said.

Among the biggest weekend winners were discount giants like Wal-Mart and electronics retailers, analysts say.

To avoid a repeat of last year’s lackluster season, national retail chains like Wal-Mart began cutting prices and opening doors earlier than usual this holiday season. The world’s largest retailer began its promotional drive -– including a promise to match any competitors’ lowest price -– at the start of the month. So far, the plan seems to be paying off: Wal-Mart said its preliminary tally showed sales for the entire month of November were up 4.3 percent form a year ago – a marked improvement from last year’s sales gains of 1.5 percent.

To try to stoke consumers’ holiday shopping fever, other retailers also picked up the pace of promotions, in many cases moving their “door buster” opening hours as early as 5 a.m. Some 78 percent of retailers increased their promotions from past year, according to Goldman Sachs.

But the turnout was mixed. Some specialty retailers and mall-based department stores didn’t fare as well as big box discounters and electronics chains, said analysts. 

“It’s always a feast or famine depending on the individual retailer, so there are some companies out there like Sears and Kmart that continue to struggle,” Robert Buchanan, a retail industry analyst at A.G. Edwards, told CNBC. “We’ve got a lot of chasms between the haves and have nots.”

The retail industry’s aggressive promotion plans were set months ago, amid fears that soaring gasoline prices and slumping consumer confidence would keep shoppers home. Gas prices have since backed off from a hurricane-related price spike of more than $3 a gallon, but they remain some 25 cents higher than last year. So far, relatively mild fall weather has helped blunt the impact of higher home heating bills, which are expected to jump as much as 50 percent in some areas.

But while consumer confidence has rebounded from a 13-year low reached in October, wages for the average workers are barely keeping pace with inflation, notes Bernstein Research retail analyst Emme Kozloff.

So it remains to be seen whether a strong early response to big bargains will follow-through to sustained buying of full-priced merchandise.  If foot traffic stumbles, expect retailers to pull out even more promotions and continue to cut prices. As in past years, many consumers have been conditioned to wait for bargains late in the holiday season. The growing volume of gift cards has also shifted buying patterns later into January, when retailers typically offer their deepest discounts to clear out inventories.

Holiday surfing
Online retailers -– and the online operations of traditional offline chains -- continue to post major gains in traffic and sales. As in year’s past, online shopping traffic was expected to peak Monday – dubbed “Cyber Monday” – as mall-averse shoppers return to work and surf on line for holiday gifts.

But with more shoppers signing up for high-speed Web access at home, the technical advantages of high-speed holiday surfing at work are disappearing, according to Shopzilla.com Chairman Chuck Davis.

“What were seeing is 75 percent of online shoppers are buying between after dinner and before they go to sleep,” he said. “So that tells me that there’s a lot of sampling going on out in the offline world, and then they come home and buy so they don’t have to deal with the big lines.”

Web retail consultant ComScore reported that, excluding travel, online spending for November approached $7 billion, up 24 percent from a year ago -- even before “Cyber Monday” had begun.

Online retailers are borrowing a Web page from their offline competitors with promotions of their own. Internet auction giant eBay has launched a major ad campaign – complete with TV spots and a slick catalog mailing – to spur sales. 

Reuters and The Associated Press contributed to this report.

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