U.S. Consumers Spent Average of 3.5% Less on Shopping (Update4)

By Cotten Timberlake and Tiffany Kary


Nov. 25 (Bloomberg) -- U.S. consumers spent an average of 3.5 percent less during the post-Thanksgiving Day holiday weekend than a year earlier as retailers slashed prices to lure customers grappling with higher food and energy costs.

Shoppers spent $347.44 on purchases from Nov. 22 through today, choosing to buy less-expensive digital-photo frames and cashmere sweaters, the National Retail Federation said today in a statement. Store visits increased 4.8 percent.

Customers have cut back on spending in the face of increased costs for milk and gasoline and the worst housing slump in 16 years. Wal-Mart Stores Inc. responded by offering holiday discounts more than two weeks earlier than last year while Macy's Inc. and J.C. Penney Co. reduced clothing prices by as much as 60 percent.

``The sense we have this year is that shoppers are very mission-focused,'' said Fred Crawford, managing director for consulting and advisory firm AlixPartners LLP. ``They know who is carrying what, and at what price point.''

More than 147 million consumers visited stores over the weekend, the NRF said, based on a poll it commissioned from BIGresearch. The average spending amount last year was helped by increased sales of high-definition televisions, NRF spokesman Scott Krugman said.

``It's the saturation of HD-TVs into the market, and also retailers recognizing that consumers will be more conservative this year and focusing on lower-priced merchandise,'' he said.

November, December

Sales in November and December represent 20 percent of retailers' annual revenue, according to the NRF. The fourth quarter accounts for almost a third of retailers' annual profit, according to the International Council of Shopping Centers.

Sales on Nov. 23, called Black Friday because it was the day that retailers traditionally turn a profit for the year, rose 8.3 percent from a year earlier to $10.3 billion, Chicago- based research firm ShopperTrak RCT Corp. said.

Combined sales for both Black Friday and yesterday rose 7.2 percent to $16.4 billion, the firm said today.

ShopperTrak measures foot traffic in shopping centers and malls using more than 50,000 video devices. BIGresearch, based in Worthington, Ohio, polled 2,395 consumers on Nov. 22-24.

Krugman, who didn't provide an aggregate spending estimate for the weekend, said overall sales were lifted by the higher number of shoppers, even as they spent less individually.

Shares Rise

Wal-Mart, the world's biggest retailer, rose 87 cents, or 1.9 percent, to $45.73 in New York Stock Exchange composite trading on Nov. 23. Macy's gained $1.53, or 5.4 percent, to $30.03 in New York trading and Target Corp. advanced $3.07, or 5.7 percent, to $57.17.

Online retail spending on ``Cyber Monday'' may surpass $700 million, a single-day record, as customers head to Amazon.com Inc. and Walmart.com to find bargains on flat-panel televisions and toys, research firm ComScore Inc. said today.

Consumer purchases over the Internet rose 29 percent on Thanksgiving Day and 22 percent the day after, Reston, Virginia-based ComScore said. Spending tomorrow probably will exceed either of those days as people return to work from the holiday weekend, it said.

Online visits on Black Friday increased 10 percent from a year earlier, according to data released today by research firm Nielsen Online.

Web sites run by IAC/InterActiveCorp, owner of the HSN shopping channel and ticket broker Ticketmaster, were the most visited by U.S. shoppers from their homes, followed by Amazon.com, Walmart.com and Target Corp., New York-based Nielsen said.

The NRF in September predicted a 4 percent gain in total retail sales for November and December, the smallest gain since a 1.3 percent rise in 2002. The group reiterated its projection today.

The margin of error of the BIGresearch poll was plus or minus 1.5 percentage points.