Black Friday deals lure US shoppers, biggest sales gains online

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NEW YORK (REUTERS) - Shoppers across the United States snapped up deep discounts on toys, clothing and electronics both online and at stores on Black Friday (Nov 23), giving retailers a strong start to their make-or-break holiday season.

A healthy economy and rising wages gave people the confidence to splash out on retailers' annual raft of bargains.

"The prices today are very good," said Jose Manuel Cruz Hernandez, 59, who hit the Del Amo Fashion Centre in Torrance, California, with his sister Paulina Cruz, 66, who comes every year from Mexico City to shop.

The pair spent US$120 (S$165) on princess dolls and other toys at the Walt Disney store, where items were 20 per cent off. They spent a similar amount at Gap, where items were discounted by about 55 per cent.

Cruz Hernandez, a foreman at an aerospace firm, said he was comfortable with the US economy and his own finances and plans to spend another US$1,000 on holiday gifts - about the same as last year.

A similar story played out online, where shoppers spent US$643 million by 10am ET, up 28 per cent from a year ago, according to Adobe Analytics, which tracks transactions at most of the top US online retailers. Smartphone sales in particular contributed to gains.

Foot traffic looked healthy at stores offering discounts, although detailed numbers on brick-and-mortar holiday sales will not be available for several days.

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"Overall, Black Friday doesn't have the sense of urgency as in the past and feels more like a busy regular weekend day in many of the stores," said Dana Telsey at Telsey Advisory Group.

"Many of the promotions were available for the past couple of weeks," Telsey said. "We haven't noticed desperation from any retailer."

Shares of Macy's, Kohl's, and Target all closed down on Friday and weighed on the broader S&P 500 retailing index, which closed down 0.56 per cent.

Investors are concerned retail sales growth may have peaked in the second quarter and business will slow down as comparisons get tougher, said Brian Yarbrough, retail analyst with Edward Jones.

Victoria's Secret owner L Brands, Walmart and American Eagle Outfitters rose. J.C. Penney Co ended flat and closed slightly lower.

The overall stock market finished a shortened session with losses.


Early numbers showed overall retail sales, both in stores and online, were in line with expectations, according to Mastercard's SpendingPulse retail report. The firm expects overall Black Friday sales to top US$23 billion this year, up from US$21 billion last year.

Mastercard combines sales activity in its payments network with estimates of cash and other payment forms. It said cold weather in the eastern United States and wet weather in the west may be pushing more consumers online.

Online spending is on track to hit US$6.4 billion on Friday, Adobe said. Online sales on Thanksgiving Day were up 28 per cent at US$3.7 billion.

The National Retail Federation forecast US holiday retail sales in November and December will increase between 4.3 and 4.8 per cent over 2017 for a total of US$717.45 billion to US$720.89 billion. That compares with an average annual increase of 3.9 per cent over the past five years.

About 38 per cent of American consumers plan to shop on Black Friday, a Reuters/Ipsos poll showed last week.

Very cold weather in the US North-east may have kept some shoppers at home, although industry analysts also reported added demand for coats and other warm clothing. An Athleta clothing store in Tysons, Virginia, provided hot chocolate with marshmallows to women in line for the dressing room.


Shoppers picked up big-ticket items such as TVs, Apple iPads and Watches at Target, while phones, toys, gaming consoles and cookware were top sellers at Walmart.

Many shoppers sought out air fryers, which do not use oil to deep fry food and Instant Pots. Kohl's chief executive Michelle Gass told CNBC the company was selling 60 Instant Pots a minute online on Thanksgiving Day.

While most retailers have not changed their deals and discounts year-over-year, many have moved their start dates earlier and offered more teasers, according to deal site RetailMeNot.

The deepest discounts in apparel and accessories were offered by Michael Kors, which ran a 60 per cent discount sale; Gap, which offered 50 per cent off site-wide; and Nordstrom, which gave away up to 60 per cent on merchandise.

People shop at the Macy's flagship store on Black Friday on Nov 23, 2018 in New York City. PHOTO: AFP

Other deals included: * An H&M store in Manhattan offered 30 per cent off everything in-store and online.

* Macy's in Herald Square, Manhattan, sold a Coach designer wallet, originally US$225, for US$53. Coach bags there, originally US$259, were half off.

* Midtown Comics was taking 25 per cent off everything at its three Manhattan locations until noon.

* An Eddie Bauer in Chicago offered 50 per cent off all items.

* At a Chicago-area Pandora, which sells popular charm bracelets that can cost up to US$1,000, jewelry was 35 per cent off before 10am and 25 per cent off for the remainder of the day.

* J Crew clothing was 50 per cent off. Its site experienced some technical difficulties.

* Walmart was selling a Google Home mini for US$99.


Many retailers, reacting to the bankruptcy of the Toys 'R'Us chain, are catering to parents.

Target said in October it planned to dedicate nearly a quarter of a million square feet of new space to its toy business across 500 of its stores.

"Toys 'R' Us had better quality for toys," said Ashley Drew, 29, shopping for her 5-year-old daughter at a Los Angeles-area Walmart, next door to the empty shell of a Toys 'R' Us store.

Department store JC Penney, known for its mid-priced apparel, has also made a push into toys.

Carolyn Pertette from Wilkinsburg, Pennsylvania, shopped in the early morning at the Waterfront Mall in Pittsburgh.

"I'm concerned about where I'm going to get toys," she said.

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