Black Friday Deals Lure U.S. Shoppers, Biggest Sales Gains Online

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A Black Friday advertisement stands during the shopping event at Roosevelt Field Mall in Garden City, New York
A Black Friday advertisement stands during the shopping event at Roosevelt Field Mall in Garden City, New York, U.S., November 23, 2018. REUTERS/Shannon Stapleton
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By Nandita Bose and Melissa Fares
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, 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 Center in Torrance, California, with his sister Paulina Cruz, 66, who comes every year from Mexico City to shop.

 

A large crowd of people shop during a Black Friday sales event at Macy's flagship store in New York City
A large crowd of people shop during a Black Friday sales event at Macy’s flagship store on 34th St. in New York City, U.S., November 22, 2018. REUTERS/Stephanie Keith

 

The pair spent $120 on princess dolls and other toys at the Walt Disney Co store, where items were 20 percent off. They spent a similar amount at Gap Inc, where items were discounted by about 55 percent.

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

 

A woman stands with items inside a target store during a Black Friday sales event in Westbury, New York
A woman stands with items inside a target store during a Black Friday sales event in Westbury, New York, U.S., November 23, 2018. REUTERS/Shannon Stapleton

 

A similar story played out online, where shoppers spent $643 million by 10 a.m. ET, up 28 percent from a year ago, according to Adobe Analytics, which tracks transactions at most of the top U.S. 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.

 

 

“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.”

 

People shop during a Black Friday sales event at Macy's flagship store in New York City
People shop during a Black Friday sales event at Macy’s flagship store on 34th St. in New York City, U.S., November 22, 2018. REUTERS/Stephanie Keith

 

Shares of Macy’s Inc, Kohl’s Corp, and Target Corp all closed down on Friday and weighed on the broader S&P 500 retailing index, which closed down 0.56 percent.

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.

 

A Black Friday sales event advertisement sign is seen as a man shops inside a Saks Fifth OFF 5TH Outlet in Garden City, New York
A Black Friday sales event advertisement sign is seen as a man shops inside a Saks Fifth OFF 5TH Outlet in Garden City, New York, U.S., November 23, 2018. REUTERS/Shannon Stapleton

 

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

The overall stock market finished a shortened session with losses.

 

STRONG ONLINE SALES

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

 

A large crowd of people shop during a Black Friday sales event at Macy's flagship store in New York City
A large crowd of people shop during a Black Friday sales event at Macy’s flagship store on 34th St. in New York City, U.S., November 22, 2018. REUTERS/Stephanie Keith

 

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 $6.4 billion on Friday, Adobe said. Online sales on Thanksgiving Day were up 28 percent at $3.7 billion.

 

People shop during the Black Friday sales shopping event at Roosevelt Field Mall in Garden City, New York
People shop during the Black Friday sales shopping event at Roosevelt Field Mall in Garden City, New York, U.S., November 23, 2018. REUTERS/Shannon Stapleton

 

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

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

 

People ride an escalator in H & M during a Black Friday sales event in Manhattan, New York City
People ride an escalator in H & M during a Black Friday sales event in Manhattan, New York City, U.S., November 23, 2018. REUTERS/Andrew Kelly

 

Very cold weather in the U.S. Northeast 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.

 

DEAL FRENZY

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

 

People shop during a Black Friday sales event at Macy's department store in Manhasset, New York
People shop during a Black Friday sales event at Macy’s department store in Manhasset, New York, U.S., November 23, 2018. REUTERS/Shannon Stapleton

 

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 per 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.

 

A man is seen in Times Square while Black Friday shopping in New York
A man is seen in Times Square while Black Friday shopping in New York City, U.S., November 23, 2018. REUTERS/Brendan McDermid

 

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

 

Other deals included:

* An H&M store in Manhattan offered 30 percent off everything in-store and online.

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

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

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

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

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

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

 

People walk past Top Shop ahead of a Black Friday sales event in Manhattan, New York City
People walk past Top Shop ahead of a Black Friday sales event in Manhattan, New York City, U.S., November 23, 2018. REUTERS/Andrew Kelly

 

REPLACING A TOY STORE

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.

 

Women carry shopping bags during a Black Friday sales event near Century 21 in Manhattan, New York City
Women carry shopping bags during a Black Friday sales event near Century 21 in Manhattan, New York City, U.S., November 23, 2018. REUTERS/Andrew Kelly

 

“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.

 

People shop during the Black Friday sales shopping event at Roosevelt Field Mall in Garden City, New York
People shop during the Black Friday sales shopping event at Roosevelt Field Mall in Garden City, New York, U.S., November 23, 2018. REUTERS/Shannon Stapleton

 

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.

 

(Additional reporting by Shannon Stapleton in Long Island; Lewis Krauskopf, Melissa Fares, Jennifer Ablan and Anna Irrera in New York; Lisa Baertlein in Los Angeles; Richa Naidu in Chicago; Margaret Rice in Tysons, Virginia; and Siddharth Cavale in Bengaluru; Writing by Nick Zieminski; editing by Patrick Graham, Saumyadeb Chakrabarty and Bill Rigby)

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