NEW YORK – Americans spent more in stores at the start of holiday shopping than a year ago, according to figures released on Saturday, but retailers' hopes for the key season were curbed as titan Wal-Mart (WMT) cut its November sales forecast.
Consumers lined up to grab early-bird specials as stores opened from 5 a.m. on the Friday after Thanksgiving, which is one of the year's biggest shopping days, known as Black Friday (search) as it used to be the day retailers got into profit. Retailers now report profits throughout the year.
Black Friday used to be the biggest shopping day of the year, but now it competes with the Saturday before Christmas for top sales. Black Friday was the biggest shopping day in 2003.
Early sales data from analyst ShopperTrak showed Black Friday sales rose 10.8 percent from a year ago to $8 billion, while Visa USA said spending on its cards rose 15.5 percent to $4.1 billion with sales up but plastic also more widely used.
"We are cautiously optimistic this will be a good holiday season, but it is too early to tell if it will be a great holiday," said Visa USA spokesman Paul Cohen.
After a weak summer, retailers have become more optimistic about the make-or-break Thanksgiving-to-Christmas season that accounts for a quarter of annual retail sales, with oil prices easing and consumer confidence rising.
Black Friday is often used as an indicator for the holiday, and anecdotally it looked good with long lines, parking lots full, and chaotic scenes in malls. but few retailers were giving firm numbers until November sales figures come out on Dec. 2.
But enthusiasm over Black Friday sales was tempered as Wal-Mart Stores Inc., the world's biggest retailer, said its November sales failed to meet expectations, signaling shoppers may not be a bullish as hoped this holiday.
Wal-Mart (search), in a weekly call, said sales at U.S. stores open at least a year rose 0.7 percent from a year earlier, missing a forecast 2 to 4 percent rise, with high oil prices and fewer discounts curbing spending in the first week of the holiday.
Chief economist Michael Niemira of the International Council of Shopping Centers (search) said there was no guarantee of a merry Christmas, but the retail industry could be "cautiously optimistic" for the holiday after the robust Black Friday.
"Black Friday is not always considered to be a particularly good predictor for the rest of the season, as factors like weather, discounting patterns, inventory, and general economic conditions come into play," said Niemira.
Retail analysts are on average expecting sales growth this holiday to be lower than a year ago, with higher oil prices driving up heating bills and biting into lower income earners' budgets and with some caution about the U.S. economy.
The National Retail Federation has forecast sales rising 4.5 percent between Thanksgiving-to-Christmas to about $220 billion, compared to an increase of 5.1 percent a year ago.
ShopperTrak said sales on Black Friday were well above expectations, far exceeding last year's rise of 7 percent, with sales in the U.S. Midwest particularly good.
Taubman Centers Inc., which owns or manages 22 shopping centers nationwide, reported sales of consumer electronics and apparel were strongest.
"The weather helped, with snow in the Midwest on Wednesday night before Thanksgiving putting people in the mood for shopping and cooler temperatures, even in Florida, helping in terms of selling sweaters," said spokeswoman Karen MacDonald.
"Now we have to keep our fingers crossed and hope it continues through the holiday," she said, adding that the stores were reported to be quieter on Saturday as expected.