The U.S. holiday shopping season was in full-swing on Thursday, with retailers hoping consumers will spend big despite worries about the fragile economy and their own precarious finances.
Stores looking to grab as big a piece as possible of what is expected to be a middling holiday shopping season pushed post-Thanksgiving openings into Thursday evening, getting an early start on Black Friday, the traditional start to the U.S. holiday shopping season.
The strategy appeared to be working, judging from the 300 people lined up at a Toys R Us store on Long Island, New York before it opened at 9 p.m. on Thursday.
Shoppers were looking for bargains, but customers like James McBreaty were just what retailers were hoping for; those who will also buy things beyond the doorbuster deals retailers offer to entice customers.
We came for the deals, but we were just discussing if we will buy things that aren't discounted, said McBreaty, 32, a paralegal who was waiting with his wife Nicole. Most likely the entire store isn't discounted, but we're here so we'll probably buy some crap anyway.
In reality, the shopping period has been underway for some time as retailers such as Wal-Mart Stores Inc
Retailers from Amazon.com
Retail executives and analysts are predicting a more competitive season than 2010. Unemployment still remains at 9 percent, European debt woes are weighing on the stock market and consumer confidence remains spotty.
The National Retail Federation, an industry trade group, forecast a 2.8 percent increase in sales for the November-December holiday season, down from the 5.2 percent increase in 2010.
Some shoppers even feel as though the recession has returned, even if it has not shown up in economic data.
This year, we are going to do shopping, but I don't think it is going to be as much shopping as we usually do. Because of the recession, we are not going to shop as much, said Desiree Schoolfield, 49, a public service profession from Queens who was shopping at the Toys R Us in Times Square.
Earlier on Thursday, a line outside a Best Buy in Union, N.J., included shoppers who had pitched a tent to stay warm until the store's midnight opening, according to Charles O'Shea, a Moody's senior retail analyst.
O'Shea said he was visiting various retailers to gauge consumer traffic. The big draws are deals like t-shirts for $6, down from $12. Bargains like those will be a fixture for the season, he said.
There is no question that the shopper is looking for deals, O'Shea said. Nobody wants to feel like they're leaving money on the table, especially when they have less money now.
The retail federation expects 152 million people to hit stores this weekend, up 10.1 percent from last year.
Paula Taero, a 58 year-old housekeeper from Queens, New York who was shopping on Thursday at a Kmart in Manhattan, said she is cutting back this year on her Christmas shopping.
Santa will buy for others. I don't have so much money this year, she said.
Wal-Mart, Old Navy, which is part of Gap Inc
To narrow the gap in store hours with rivals, discounter Target Corp
Others, including J.C. Penney Co Inc
BARGAINS OR BUST
Wal-Mart started its Black Friday doorbuster deals on Thursday at 10 p.m. at its stores. Amazon.com, not to be outdone, will offer its deals online at 9 p.m.
Newspaper inserts on Thursday morning were boasting of the usual Black Friday bargains to get people into stores. For example, Staples Inc
The knock-down-drag-out fight comes as the rebound in sales cooled in October, when many top chains like Macy's and Saks reported disappointing sales.
It will be even tougher for chains that have struggled with sales declines lately, like Gap and Penney.
Last year, after a strong Black Friday weekend, shoppers sat on their hands until closer to Christmas.
This year, those looking for deals beyond the requisite Black Friday specials may be disappointed.
In a research note on Tuesday, Wells Fargo economist Mark Vitner said: Bargain hunters may have a tougher time finding those markdowns this year, as retailers are keeping a sharper eye on profit margins.
Either way, middle-class shoppers are also more frugal now, taking a page from their lower income counterparts, Andrew Stein, vice president of marketing planning at Sears Holdings told Reuters.
The Kmart customer has always been a value shopper. The rest of the country is behaving like the Kmart shopper now, he said, noting that there were a lot of people at Kmart's layaway lines on Thursday.
(Reporting by Phil Wahba in New York; additional reporting by Dhanya Skariachan and Liana B. Basker; Writing by Brad Dorfman in Milwaukee; Editing by Bernard Orr and Matt Driskill)