U.S. retailers were upbeat about their expectations for Black Friday sales in interviews this morning, as customers lined up outside stores nationwide for the opening of the traditional holiday shopping season.
“We think it’s going to be a whopper of a day,” Toys “R” Us CEO Gerald Storch told Bloomberg News. Chicago-based ShopperTrak RCT Corp. agreed, predicting that today would be the busiest shopping day of the year. And Macy’s Inc. CEO Terry Lundgren said his department store chain was being “very aggressive” about discounts to “get the traffic in the store.”
Known as Black Friday for its red-ink-erasing effect on retailers’ balance sheets, the day after Thanksgiving is the considered the high point of the November-to-January season that, according to the New York-based International Council of Shopping Centers, brings U.S. retailers about 30 percent of their annual profits.
This year – to spur spending among consumers pinched between rising costs for energy and credit and declining home values – the holiday discounting “started earlier, it started more aggressively,” Howard Davidowitz, chairman of the New York-based retail consulting firm Davidowitz & Associates Inc., told Bloomberg News.
The effort proved so successful, it helped boost the U.S. stock markets to their biggest gains in a week, Bloomberg News reported this afternoon.
On the New York Stock Exchange, seven stocks rose for every one that fell today. By the markets’ 1 p.m. close, The Dow Jones Industrial Average was up 181.84 points or 1.4 percent to 12,980.88, while the Nasdaq Composite Index was up 34.45 points or 1.3 percent to 2,596.6; each ended the week down 1.5 percent. The Standard & Poor’s 500 Index added 23.93 points or 1.7 percent to close at 1,440.7, paring its loss for the week to 1.2 percent.
“The fact that Black Friday is not a disaster and is off to a modest but healthy start is just a relief,” Mark Bronzo, who helps manage $500 million at Nationwide Separate Accounts in Irvington, New York, said today. “The scenario we’ve all been operating under for the last several months is that the retail world is coming to an end. That’s not the case.”
But, Lauri Brunner, a retail analyst at Thrivent Investment Management in Minneapolis, had told Bloomberg News earlier this week, “The retailers are trying to extend the season by doing two-day sales and opening at 4 a.m.,” as they try “to jumpstart sales growth, but it might come at the expense of profit.”
