Americans headed to stores in droves to kick off the holiday shopping season on Friday, though many said they were being more selective about what they buy and paring back what they spend.
Black Friday, the day after U.S. Thanksgiving, is often the single busiest shopping day of the crucial holiday season, which accounts for nearly one-fifth of the retail industry's annual sales.
The annual ritual of American consumerism is being monitored closely for signs the U.S. shopper is again ready to propel the economy forward, after the global financial crisis last year led to the worst holiday season in nearly four decades.
Macy's Inc CEO Terry Lundgren said retailers should have a decent holiday performance in 2009, at the very least on a comparable basis since the prior year was so dismal.
That's very different than last year, Lundgren told cable business channel CNBC. Last year we were falling off a cliff, grabbing for branches on the way down.
Debra Diriwachter, a supermarket cashier, waited for several hours outside the Queens Center mall in New York before doors opened at 11 p.m. EST on Thursday. She is cutting back her gift budget this year and will use only cash for purchases.
I don't like to be in debt and if I know what I am spending, that's good, she said.
The first 200 shoppers entering the mall, some in their pajamas, were handed $10 gift cards to whet the appetite.
This is beautiful. I am so happy, said Roberto Tomala. This is a good motivation to everybody. In this situation, even $10 helps to buy something.
Up to 134 million U.S. consumers say they may shop for holiday gifts this weekend from Black Friday through Sunday, according to the National Retail Federation.
That is up from last year's survey, taken weeks after the global financial crisis erupted, but still below consumer Black Friday plans reported ahead of the shopping season in 2007.
Some industry experts expect a strong turnout on the Black Friday weekend, but cautioned that did not mean a strong holiday season, as shopping could drop off again until just before Christmas.
For a graphic on U.S. holiday sales trends, click on http://graphics.thomsonreuters.com/119/US_RTLXMS1109.gif
For a Reuters Insider segment on holiday sales, click on http://link.reuters.com/wuj63g
HALF AS MUCH FOR A LAPTOP
Discount retailers like Wal-Mart Stores Inc and Target are expected to see the heaviest traffic over the holiday weekend, followed by department store chains like Macy's and Kohl's.
About 50 people were lined up outside a Best Buy Co Inc store in Springfield, Pennsylvania, at midnight, eager for doorbuster deals on electronics like laptop computers and flat-screen televisions.
I have to get a laptop for my daughter, said Nate Bryan of Drexel Hill, Pennsylvania. It's normally $1,000 and now cut in half. That $500 can go to other things.
Over the past year, as consumers have kept a tight watch on their wallets, retailers have closed underperforming stores, scaled back new openings and shrunk inventories, to avoid last year's profit-sapping discounts of unsold merchandise.
But they still have room to offer enticing discounts.
Last year they literally gave the merchandise away, said Marshal Cohen, senior analyst at retail consultancy NPD Group. This year, they have to sell half as much as last year to break even ... so even if they don't sell as much they're going to make money.
The unsettled state of the U.S. economy, with a 26-year high in unemployment and tighter access to credit, has industry holiday sales forecasts varying widely from a decline of 3 percent to an increase of 2 percent.
Early hopes for a consumer-led recovery have pushed retail shares up 47 percent this year, compared with a 23 percent rise for the Standard & Poor's 500 Index.
While most research in the last two months showed shoppers planned to spend less or the same in 2009 from a year ago during the holidays, that stance may be softening.
Nearly one-third of consumers surveyed by Deloitte said they now expect to spend more than they had planned a month or two ago. The survey, conducted last week, polled 1,051 people, with a margin of error of plus or minus 3 percent.
Jimmy Johnson, who arrived at a Springfield, Pennsylvania, Target store at midnight, said he planned to spend the same as he did last year, but wanted more for his money.
I'm buying whatever I can get a great deal on -- cameras, TVs, toys, he said, adding that he would not be using any credit cards this year.
Straight cash, homie, straight cash. I don't have to worry about paying it back. Use your own money and you earn it and you spend it.
(Reporting by Michele Gershberg and Dhanya Skariachan, additional reporting by Tom Hals in Springfield, Pennsylvania, editing by Matthew Lewis)