Holiday Shopping in a Downturn: Deals or Nothing at All
Saturday, November 29, 2008
There were no Christmas miracles for retailers yesterday as the holiday shopping season officially got underway.
Pent-up demand could have sent retail sales skyward. Or the economic crisis could have kept them in the red. It was all up to the throngs of shivering shoppers waiting in the dark, cold morning. Would they buy that $598 flat-panel television or a $379.99 Toshiba laptop?
"I would describe the customers as hit-and-run shoppers," said C. Britt Beemer, chairman of America's Research Group, a consumer behavior research firm. "They went in, they got the deal and they left. If the deal was sold out, they left without anything."
The day after Thanksgiving -- commonly called Black Friday -- is a key barometer of holiday spending, when retailers traditionally turn a profit. Retailers managed to rouse many shoppers out of bed through aggressive discounts in key categories such as electronics, toys and apparel, but consumers kept a close eye on their own bottom lines.
Economists are closely watching this holiday season because the depth of the financial slowdown could depend on consumer spending, which accounts for roughly 70 percent of the gross domestic product. The next few weeks are also a make-or-break period for retailers because they count on holiday sales to help pay their costs the rest of the year.
"With the news of the economy, I wasn't certain of what to expect today," said Chris Poleto, general manager of Fair Oaks Mall. He said the 8,000-car parking lot was full by early afternoon and traffic seemed brisk compared with last year. "It seems a little bit more faster and more furious."
Many shoppers were unable to shake off the economic Grinch. Roxanne Draheim, 43, of Rockville said this year's holiday shopping theme was "buy only what you need."
That included three pairs of discounted Easy Spirit shoes at Macy's for her mother and some clothes for her son. She also said she plans to splurge on a new iPod Nano for herself because it was on sale at the Apple store, but otherwise she's determined to "watch cash because we don't know what's going to happen in the economy."
Nia Robinson, 28, a director at an environmental organization in the District, has been a faithful Black Friday shopper for five years and woke up at 4:30 a.m. yesterday to hit Old Navy in Rockville to score the free MP3 player given to the first few customers.
Robinson said she carefully researched deals in the newspaper and online before venturing out because her shopping budget has shrunk to $700 from $900. By midmorning, she was browsing through Montgomery Mall, where crowds resembled those of a typical busy weekend.
"It's a lot calmer than last year even though the sales are better," Robinson said.
Nearly 128 million people are likely to go shopping before the weekend is over, according to the National Retail Federation, a trade group -- fewer than last year but still a substantial number. An official tally won't be available until Sunday.