Black Friday stakes are high
How well retailers do during this Black Friday, the biggest shopping day of the year, will have lasting consequences not just on them, but the still-fragile economic recovery.
Across the nation, many stores for the first time used midnight openings, along with the usual bevy of deals, to lure consumers, whose appetite for good buys has been increasing since the Great Recession.
Some local shoppers felt that the pre-Black Friday openings may have kept crowds down for today's pre-dawn action. At 2 o'clock this morning, however, shopping activity at the Wal-Mart Superstore in Hometown was reported to be brisk.
The number of shoppers this morning at the Lehighton Wal-Mart was also reported to be "steady."
Tia Kolek of Lehighton did some shopping during a break in her shift, which began at 3:45 a.m. She purchased four Wispy Walker dolls for a friend who has four foster girls.
"I haven't seen them before," said Kolek. "They're all the same doll, but each one looks a little different so that each girl can tell which one is hers."
For 6-week-old Jordyn Albert of Lehighton, it was her first Black Friday shopping experience. She slept through the entire trip while her mom, Jamie Albert, picked up a few presents in a 20-minute span.
Peggy and Tia Miller of Walnutport, a mother/daughter team, were looking for those door-buster specials.
"We picked up a DVD and some other items at good prices," said Mrs. Miller.
Across the nation, economists and business executives are watching closely.
"A bad holiday season would raise recession fears again, whereas a strong one would start to dispel those fears," said Scott Hoyt, senior director of consumer economics for Moody's Analytics.
That would give companies more impetus to step up hiring, he added.
As usual, success will depend largely on consumer spending, which accounts for about 70 percent of U.S. economic activity. Their spending can impact stores' expansion plans and inventory decisions into the new year.
And that trickles through the rest of the economy, from suppliers to jobs.
The November-December period accounts for 25-40 percent of annual sales and profits. For 2011, that's almost half a trillion dollars in revenue from spending on everything from tablets to toys. The industry accounts for nearly a quarter of U.S. jobs.
As the critical sales time began early today, economists and merchants were wondering whether shoppers would stick to their lists or pick up some extras for themselves not only on Black Friday but over the rest of the season.
Or would shoppers do what they've been doing for several years now - jump on the deals and retreat until the season's final days when they think the bargains will be better?
Just as in the past few years, merchants have tried discounts on holiday merchandise as early as October.
Those 4 a.m. openings on Black Friday are now outdated. The new trend is midnight openings, with many stores like Target, Best Buy and Kohl's embracing them as they tried to be the first to pull in shoppers.
Given this year's challenging environment, online jewelry site Blue Nile made a bigger push in marketing, launching its first online sale on Black Friday to snag more female customers.
"It's going to be competitive. I want to get our brand out there in the mix," said CEO Vijay Talwar, who estimates that 30-35 percent of annual sales come from the November and December period.
Earlier openings and a dramatic increase in early morning specials have helped make the day after Thanksgiving the biggest day of the year for the past six years in a row. It's predicted to keep that crown again this year, according to ShopperTrak, a research firm.
Just because stores have a decent start doesn't mean the overall holiday period will be good. Merchants had a good Black Friday in 2008, as shoppers showed up for the enticing deals, but the season was a bust.
The impact of that period still lingers, from shrunken orders to the demise of some suppliers, experts say.
That was when spending plunged so much that many retailers were caught with too much product in the pipeline. As a result, they slashed prices up to 80 percent to draw shoppers and raise cash.
Even Saks Fifth Avenue had a fire sale of designer clothes. Others sold jewelry and clothing to liquidators for pennies on the dollar. Some, such as Circuit City, went out of business. And the woes still linger.
Retail hiring for the season hasn't rebounded to its 2006 peak of 54.8 million workers. About 49.5 million workers are expected to be hired this season, up 1 percent from last year, according to the International Council of Shopping Centers.
Stores, scared they'll be stuck again with too much holiday leftovers, have also kept their inventories lean. And they're still being forced to push big discounts as shoppers contend with a 9 percent jobless rate and gloomy confidence.
The National Retail Federation expects total holiday sales to be up 2.8 percent to $465.6 billion, less than the 5.2 percent increase a year ago but slightly more than the 2.6 percent average increase over the past decade.
Among those watching nervously is Pamela Kebe, a partner at Piccolo Piggies of Georgetown, an upscale children's clothing store in Washington, D.C., that derives 40 percent of its annual sales from November and December.
Her business is down from 40-50 percent from its 2007 peak. At one point, she liked the challenge of getting shoppers with discounts. But it's not fun anymore.
Kebe said if she doesn't have a good holiday season, she'll have to cut inventory for next year and work with vendors to negotiate more flexible payment terms.
"I am very nervous," she said. "This is the first time I feel like that."