Eager shoppers stormed malls and stores across the country on Friday to snap up the early-bird specials that mark Black Friday, the first official day of the U.S. holiday shopping season.
While shoppers were looking for giveaways and discounts, analysts and investors were watching for signs of consumer strength or weakness.
Most retailers and analysts have expressed cautious outlooks for this holiday season, as consumers pull back amid a slumping U.S. housing market, a credit crunch, and rising food and fuel costs.
Retailers knew they had to offer promotions enticing enough to get shoppers out of bed on a chilly day -- and they delivered, said Tracy Mullin, chief executive of the National Retail Federation, a trade group. Though retailers are anticipating a challenging holiday season, they are encouraged by the enthusiasm that their Black Friday sales generated.
NRF is forecasting holiday retail sales during November and December will rise 4 percent, the slowest rate since 2002, when sales rose 1.3 percent, and below the 10-year holiday sales average of a 4.8 percent increase.
Macy's Inc Chief Executive Terry Lundgren said the line surrounding the flagship Herald Square store in midtown Manhattan was so long he decided to open its doors at 5:30 a.m. EST, 30 minutes earlier than planned. About 3,000 customers then rushed inside, he said, up from last year, when 2,500 shoppers entered at 6:00 a.m.
Customers came for the promotions, such as a $250 Martha Stewart prelit Christmas tree on sale for $99.99 and stayed to buy full-price items such as Coach boots, Michael Kors handbags and Donald Trump ties, Lundgren said, fueling his optimism about the upcoming weeks.
If you do well on Black Friday, it's a good indication that you've got the right items and the right marketing to attract the customer for the rest of the season, he said.
IT'S THE DISCOUNTS
Michael Unger, director of the consumer product and retail practice of Archstone Consulting, said stores at the Roosevelt Field mall on New York's Long Island were much more crowded, and having much bigger sales, than he had anticipated.
Conversely, at the more upscale Mall at Short Hills in New Jersey, where many stores did not run big sales, business was normal.
People are breaking down the doors for the promotions, which is typical; but the stores catering to luxury are not going to go out of their way with the promotions right now, Unger said, noting crowds at clothing stores catering to teenage girls, such as Guess Inc, Urban Outfitter Inc and Forever 21.
If you're going to shop for the holidays, you might as well shop at 50 percent off today, said Anabelle Frausto, a 22-year-old college student shopping at a Los Angeles-area Aeropostale Inc, where everything was half off.
Twenty percent off is not worth it -- they'll be having that for the rest of the year, she said.
TALK ABOUT THE WEATHER
Scott Bernhardt, chief operating officer of weather tracker Planalytics, said Friday morning was significantly colder than the year-ago day after Thanksgiving and than earlier this week in much of the nation.
The economy is going to determine whether people spend $100 or $125, but the weather's going to determine whether they buy the coats and hats or the ... flat-screen TV, Bernhardt said. There are going to be a lot more -- I mean a lot more -- inclined for the coats, hats, scarves and sweaters.
At a Best Buy Inc store in Geneva, Illinois, west of Chicago, about 150 people had lined up for an early Friday opening in bitter-cold weather that some called the worst they'd seen. They also said the crowds there were far smaller than in previous years.
Adam Wishne, a 19-year-old student from Geneva, was the first in line with two friends, having pitched a tent at 10 a.m. CST Wednesday.
Like others in line, Wishne and his friends were looking to buy high-definition televisions and laptop computers. Best Buy had a limited number of Sony laptops for $399 and Toshiba notebooks for $229.
Despite the tent, we've been freezing almost the whole time, Wishne said. But it was worth it for the great deals we got ... These will make for excellent presents.
Braving the cold, crowds lined up outside Toys R Us in New York's Times Square, anxious for door-buster deals, such as 50 percent off Star Wars Transformers and Dora's Magical Castle and Castle accessories from 5:00 a.m. EST to noon.
Toys R Us Chief Executive Jerry Storch said the line was the longest that store executives had seen on a Black Friday, except for the year that the Nintendo Wii went on sale.
Black Friday once marked the day many retailers turned a profit, or went into the black, for the year.
It used to be the busiest shopping day of the year until procrastinators and others looking for last-minute gifts shifted that distinction to the Saturday before Christmas.
The Thanksgiving weekend can make up as much as 10 percent of all holiday sales, according to retail analyst Dana Telsey of Telsey Advisory Group, while the 10 days before Christmas can account for 40 percent of the total, she said.
Thanksgiving fell on November 22 this year, a day earlier than last year, meaning there will be 32 days between Thanksgiving and Christmas and five full shopping weekends.