With the housing market still on unsteady ground, rising mortgage payments, the dollar still not as strong around the globe as most would like, gas and oil prices hitting record highs, and a major credit crunch looming over everything, investors, analysts, and consumers were all hoping the retail sector could help turn things around with a stellar performance on Black Friday—the official kickoff to the holiday season. No one wanted to see big sales numbers more than the retailers themselves who have low expectations for the year due to the aforementioned problems.
Retailers relied on special offers and discounts on everything from big screen TVs to video games to help lure in shoppers. And lure them in they did. The National Retail Federation's Black Friday Weekend Survey showed that more than 147 million shoppers—up 4.8% from last year—braved the massive crowds this year to take advantage of a variety of one-day sales and specials. However the Federation also found that consumers spent less than last year with an average of $347.44, down 3.5% from 2006, but up 14.8% from 2005.
Early reports showed that retailers and shoppers helped deliver stronger than expected sales—ShopperTrak RCT tracks sales at more than 50,000 retail outlets and says this year's Black Friday total sales rose 8.3% to roughly $10.3 billion, compared to the $9.5 billion spent during last year's Black Friday.
The immediate concern for retailers became figuring out how to sustain that momentum. Retailers like Wal-Mart extended its “in-store specials” through the weekend, while others like Toys "R" Us actually held back a number of discount specials offering them on its Web site Saturday and Sunday for online shoppers. J.C. Penney, for the first time ever, gave Black Friday shoppers $10-off coupons that could only be used on Saturday.
Once the weekend was over the retailers' focus went from Black Friday to Cyber Monday. Experts estimated 72 million shoppers would go online to take advantage of post-Thanksgiving discounts. ComScore Networks is estimating that this year's Cyber Monday's sales figures will surpass $700 million making it the heaviest online spending day on record.
Wal-Mart has unveiled five-day sales special exclusively for shoppers on its Web site. On the site, the company said its special Cyber Monday sale was the Xbox 360 premium holiday value bundle, which comes with the Xbox 360 console, an extra controller, three games and messenger bag for less than $400. Other retailers like Toys “R” Us, Target, Circuit City, Sears, and Crate & Barrel all had special offers on Cyber Monday as well.
Surveys say that consumer spending will actually rise this holiday season. In light of the early spending activity it's unclear whether or not that will be the case. We'll have to wait and see.