Holiday Retail Outlook: 'Very Good Signs'

Retail executives were holding their breath on Friday, looking for indications that the recent recovery would extend into the holiday shopping season. Macy's (M) CEO Terry Lundgren went on the record with the Wall Street Journal Saturday to assert that early indications of both traffic and sales are pointing to "very good signs" for the December shopping season.

Online market reports from Coremetrics showed the average amount online shoppers spent on Friday rose 35% from last year's Black Spending Friday. Top statistics included:

- Online Apparel retailers saw sales jump 28.6% from last year.
- Web-based jewelry sales reported nearly 25 percent surge.
- Online department stores did phenomenally well reporting a 151.7 percent jump.

Overall consumer electronics are taking an early lead in sales volumes. Best Buy (BBY) CEO Brian Dunn said that shoppers are in "a buying mood" and that "our crowds were materially bigger than last year."

Toys "R" Us also pointed to big crowds favoring electronics. CEO Jerry Storch said that not only are electronics a big hit but with respect to early sales results: "So far we're pleased. Friday morning we averaged over 1,000 people per store waiting in line, and we've been doing brisk business ever since."

In general Friday's results appear to be positive for holiday retailers. Given the big online surge on Friday that continued into Saturday, Cyber Monday is likely to follow suit. University of San Diego economics professor Alan Gin remarked over the weekend, "I think things will be surprisingly on the up side."

Comments

[HunterGVL]

There may be an upside christmas this year.....for all the wrong reasons. I have two family members who are going big this year for christmas. Seems they are temporarily flush with cash since they stopped paying their mortgage a couple of months ago and are still squatting rent free. Millions of homeowners are doing the same.
Of course bad money decisions are what got them in this state in the first place, so of course they will be consuming until they can consume no longer. I don't see this as a positive.

2009 Nov 29 02:18 PM

[annepiano]

Retailers should continue to hold their breath. The huge Black Friday discounts have driven this weekends' traffic. A great percentage of consumers rely on credit cards for holiday purchases. Banks have lowered card limits drastically. When the plastic melts the spending party is over!

2009 Nov 29 04:49 PM

[JAMES CARLINI]

One TV news channel said that spending was up .5% over last year's Black Friday. That's a half percent. I do not see that as a mega-spending spree.

I agree with some of the other comments - let's wait til the end of the month before claiming any great economic progress.

With Christmas items selling at 50% BEFORE Thanksgiving I think that is a huge comment on how weak the retailers are. 50% off sales were not until AFTER Christmas in stronger economic years. Now the attitude is - sell it now even at 50% off - or get stuck with it after Dec. 26th.

2009 Nov 29 08:13 PM

[swissfrank]

If all home 'owners' were paying their mortgage in a diligent and timely manner at normal rates, it would indeed be a different story. But hey, this is the new normal. The bank doesn't foreclose you because it doesn't want to crystallize its lending loss; the government negotiates on your behalf to keep you in your house at lower cost or zero ... and it's off to the mall we go!


On Nov 29 02:18 PM HunterGVL wrote:

> There may be an upside christmas this year.....for all the wrong
> reasons. I have two family members who are going big this year for
> christmas. Seems they are temporarily flush with cash since they
> stopped paying their mortgage a couple of months ago and are still
> squatting rent free. Millions of homeowners are doing the same.
>
> Of course bad money decisions are what got them in this state in
> the first place, so of course they will be consuming until they can
> consume no longer. I don't see this as a positive.

2009 Nov 30 01:27 AM

[Moon Kil Woong]

Huner GVL I guess you call that living it up while you can. It's not just them that are doing it, they are just mimicking the financial institutions and the government. Their downfall is they can't mint their own money or change the rules for accounting.

As for the holiday season, shop light seems to in order as it was last year. I reccomdend cash or stock. Giving someone the idea to save and invest may be the best gift you could endow your family with.

2009 Nov 30 03:28 AM

[William M. Wright]

Circuit City bankruptcy was a huge win for BBY. Those former Circuit City fans who like to shop for electronics in traditional retail stores when to Best Buy this year.

2009 Nov 30 10:57 AM

[ETFdesk.com]

some follow up reading with a different perspective on retail sales:

Why Black Friday Data Points To A Grim Holiday Season www.etfdesk.com/headli...

Dave Rosenberg 11/30/2009 KEEP AN EYE ON THE CREDIT MARKETS AGAIN www.etfdesk.com/headli...

Holiday Sales to Drop as Forecasters See ‘Discipline’ www.etfdesk.com/headli...

2009 Nov 30 07:54 PM

[Mr. Ed, Jr.]

The consumer still has no job, no credit (What little credit they do have is now at 29 % APR), little savings and a lack of desire to spend, so lower your expectations.

Black Friday is all about big sale promotions-- the ones that get people to stand in lines for hours so that the store gets a "photo op" with the local or national news media. The media gets all excited, and away we go....

But there are no real numbers yet-- everything that is being reported is estimated or just made up. Go back and re-read the above article-- there are no facts. Just blather from CEO's and "estimates" from Coremetrics.

And, lest we forget, there are fewer surviving retailers this year, so the stores that remain should certainly have a bump from last year. If a store can't top last year's numbers, they are going to be sleeping with the fishes-- aka Circuit City-- very soon.

Believe these "Black Friday" press releases at your own peril.

2009 Dec 01 02:37 AM