At malls and stores, it was the usual hectic start of the season, as crowds of shoppers frantically picked through piles of discounted merchandise.

'It was like everything we bought was already on sale and was an additional 50 per cent off at the register,' said Ms Lynn Mahloy, who arrived at Atlanta's Lenox Square Mall just after 6am on the traditional start of the holiday shopping season. But she's slashing her holiday budget to about US$1,000 (S$1,500) this year from about US$2,500 in past years because of economic worries.

Preliminary reports from major retailers including Macy's, KB Toys, Best Buy and Toys 'R' Us and mall operators such as Taubman Centres said the crowds were at least as large as last year's. But analysts said sales on Friday may not match the year-ago levels as Americans, worried about layoffs, dwindling retirement accounts, and tightening credit, slash their holiday budgets, even for their own children.

'I've always filled the tree. But you have to be honest,' said Ms Shannon Keane, 38, of Cary, North Carolina, a single mother who was recently laid off from her job. 'This year, I'll do the best I can.'

And while the steep price cuts - which were even more aggressive than the deep discounting offered throughout the month - are great for consumers, such moves are expected to depress sales and profits in a season that many believe could show a rare contraction in spending, according to Ms Janet Hoffman, managing partner of the North American retail practice of Accenture.

At a Milwaukee Wal-Mart store, Ms Shirley Jackson, a technician, arrived at about 8am, too late to get a 42-inch Polaroid HDTV selling for US$598. Instead she focused on the necessities, buying shoes and pajamas for her family and stocking up on 500-threadcount sheets discounted to US$20 from US$70.

'It's just as well I didn't get the TV. I have to focus on what I need - I need sheets, I need groceries,' said Ms Jackson, who is in her 40s.

Black Friday, the day after Thanksgiving, received its name because it historically was the day when a surge of shoppers helped stores break into profitability - into the black - for the full year.

But this year, with rampant promotions of up to 70 per cent throughout the month amid a deteriorating economy, the power of this landmark day for the retail industry could be fading.

Still, while Black Friday is not a predictor of holiday sales, it's an important barometer of people's willingness to spend for the rest of the season. This year, industry executives are taking note of how the economy is shaping buying habits.

One significant change - and a big worry for merchants - is that an increasing number of shoppers who are using cash or debit cards, instead of credit cards to pay for their purchases as they are either maxed out or just want to manage their money better.

Mr Terry J. Lundgren, chairman and chief executive of Macy's, reported about 5,000 shoppers in line for the 5am opening at the New York flagship store, at least as many as a year ago. But he also agreed that shoppers are focusing more on basics. He noted that heavily discounted coats and anything cashmere, including basic sweaters and gloves, were selling out, while houseware products like single-serve coffee makers fared well.

Sales of flat-screen TVs, which had seen a slowdown in recent weeks, were a big attraction, but they were heavily discounted, according to reports from Sears Holdings and Best Buy.

Mr Chuck O'Donnell, a manager at the Best Buy store in West Paterson, New Jersey, said that video games did especially well as shoppers focus on items that can be enjoyed by the entire family.

As for traditional toys, Toys 'R' Us Chief Executive Jerry Storch pointed out that customers were either looking for bargains or the hot, hard-to-find toys like Fisher-Price's Elmo Live and Spin Master's Bakugan. He added that the US$139 Spike, a radio-controlled dinosaur from Fisher-Price, was faring well.

Another popular item, which has been hard to keep in stock, has been Nintendo's Wii Fit game.

'What kids want are the hot toys,' he said. 'It's not about the cheap toy.' Mr James Fielding, president of Disney Stores Worldwide, however, noted that parents are focusing on deals. 'The magic price was anything under US$15,' he said. -- AP