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Busy start to Black FridayShoppers crowd some stores before dawn, but one analyst believes the furor will die down.November 25, 2005: 9:56 AM EST By Parija Bhatnagar, CNNMoney.com staff writer
NEW YORK (CNNMoney.com) - Bargain-hungry shoppers braved the early hours, chilly temperatures and growing crowds as they raced to stores early Friday morning to score the juiciest deals on some of the "must-have" holiday items. But despite the robust start for retailers on one of the busiest shopping days of the year, at least one industry analyst is betting that the early momentum will run of out gas before the weekend's over. Marshal Cohen, chief industry analyst with market research firm NPD Group, said he estimates shopper traffic is up 25 percent over the same period last year. "Everybody is coming with a road map. They have their circulars, downloaded coupons. This shows that consumers are very prepared and focused," Cohen said. "At some stores, the staff got there after consumers." First reports indicated some big crowds at discounters, including No. 1 retailer Wal-Mart, with a brawl seen at one of its Florida stores. Shoppers began lining outside the J.C. Penney (Research) store at the Westfarms Mall in Farmington, Conn., at about 4:30 a.m. to take advantage of the early bird extra discounts -- also known as "doorbuster sales" -- which typically last until noon. Wendy Haggerty, spokeswoman for the Westfarms Malls, said she saw shoppers crowding around the jewelry and cosmetics counters at Penney. "Penney's told us that they expected to do 70 percent of their sales for the day before noon," she said. Penney's special promotions include up to 60 percent off on seasonal clothing and 1-carat diamond earnings or a bracelet in sterling silver for $99. "The parking lot is slowly starting to fill up. As of right now, I'd say the traffic trend is similar to last year," she said. Lines up to 400 people deep were reported outside the Sears store at the Twelve Oakes Mall in Novi, Mich. "Sears is offering free $10 gift cards to the first few hundred shoppers. So that may have something to do with the early crowd," said mall spokesman Dan Jones. Besides gift cards, Sears is also hoping to lure shoppers with its own doorbuster deals from 6 a.m. to 11 a.m., including 40 to 70 percent off on jewelry and 20 percent off on Kenmore appliances. Meanwhile, KB Toys at the Hamilton Place mall in Chattanooga, Tenn., was scheduled to get its Black Friday business underway at 5 a.m., but opened earlier due to large crowds outside its door, according to mall spokesman Jeff Odom. Freezing temperatures did little to deter bargain hunters in Dearborn, Mich., where the parking lot at the Fairlane Town Center Mall was already 70 percent full by 6:30 a.m., mall spokeswoman Kathy O'Malley said. O'Malley told CNNMoney.com that, unlike last year, shoppers this year appear to be more targeted about where they want to shop. "It's not haphazard shopping or scrambling to find the best deals," she said. "I spoke to one lady who was here at 4 a.m. and she had a newspaper with her showing the doorbuster ads. She had her stores circled and ranked one, two and three." The bilingual Elmo was one of the hottest toys selling at the KB Toys store, while among the specialty apparel stores it was teen clothier Aeropostale (Research) doing "great bang-up business," O'Malley said. NPD's Cohen said shoppers were particularly focused on hitting Best Buy, Circuit City, KB Toys, Kohl's and J.C. Penney.
"It's definitely a race in the first few hours to get the hot products at the best price," he said. "But I think consumers will back down after today." "This is what I call a false start," he added. "I think the weekend will be good for retailers but next Monday, Tuesday and Wednesday will be tough days. People that I've talked to say they're spending a few hours today and then they'll return when the deals get better closer to Christmas." Wal-Mart: Good luck finding that $378 laptopWal-Mart's made no secret of the fact that it was prepared to be very aggressive with holiday pricing in an effort to wipe the slate clean after the colossal blunder it made in 2004 when the company decided to skimp on deep discounts in favor of boosting profits. As a result, consumers shunned Wal-Mart stores and instead shopped at its competitors such as Target and Best Buy.
This time around, Wal-Mart promised to give shoppers some of the best deals on consumer electronics and toys, two of the hottest holiday categories, and said it would match competitors holiday prices if they were lower than Wal-Mart's for the same product. Early anecdotal information suggests that the retailer may be able to redeem itself with consumers after all. "We're completely sold out of the $378 laptop, the $997 42-inch flatscreen TV and pretty much most of the electronics featured in the blitz sale," an employee at the Wal-Mart store in Brick, N.J., told CNNMoney.com, adding that people had lined up outside the store since 10 p.m. Thursday to take advantage of the retailer's six-hour "blitz sale." Industry watchers had picked Wal-Mart's $378 HP pavilion laptop as one of the must-have deals of the season.
CNN showed video of a brawl inside a Wal-Mart store in Orlando, Fla. There were no immediate details about the scuffle.
Shopping mania kicked off at midnightSome malls couldn't wait to rev up Black Friday business and opened their doors to shoppers as early as midnight, offering free coffee to people who waited in line for the "doorbuster deals." A handful of retailers -- including Kmart -- were even open for business Thanksgiving Day itself, although most spent the holiday distributing the all-important circulars detailing hot items for sale Friday. The day after Thanksgiving is dubbed "Black Friday" because it traditionally marks the start of the holiday shopping season, the period when retailers finally move out of the red -- indicating losses -- for the year and into the black, or profitability. It's also one of the busiest shopping days of the year, second usually to the Saturday before Christmas.
Industry observers say retailers are particularly nervous about how the 2005 holiday season will shape up, given the spikes in gas prices over the summer and consumer concerns about inflated home heating bills in the coming weeks. With all the uncertainty, it's not surprising that stores, especially the department store chains that have struggled to grow sales against the better-performing specialty stores and online retailers, slashed prices two weeks earlier than usual leading up to Black Friday. The National Retail Federation (NRF), the industry's largest trade group, expects its measure of total sales for the November-December shopping period to grow 6 percent to $439.5 billion, softer than last year's 6.7 percent increase. Retailers can earn as much as 50 percent of their annual sales and profits just in these two months combined. -- Click here for Holiday Money.