Black Friday: Bargains make it busy
Crowds seeking discounts fill malls, Wal-Marts in the early hours; signs point to solid start to shopping season.
NEW YORK (CNNMoney.com) -- Bargain-hungry shoppers raced to malls as early as midnight to be the first in line to grab the best of retailers' so-called doorbuster deals on Black Friday - an early indication that the 2006 holiday shopping season was off to a solid start.
Impatient shoppers were chanting, "Open the door!" shortly before a 5 a.m. opening at a Wal-Mart store in Union, N.J.
Some malls around the country ignited the shopping frenzy at the stroke of midnight as Thanksgiving turned into Black Friday. Retailers got a boost from generally favorable weather throughout the nation.
The Citadel Outlets Center in Los Angeles County, Calif., held a "Moonlight Madness" event this year with some stores opening their doors at 11 p.m. Thursday.
Anita Boeker, Citadel Outlets' marketing director, said the Old Navy store already had a long line of people outside it by 11:30 p.m. Thursday.
"By the time the store opened, they were facing overcapacity," she said. "Our parking lots are filling up quickly and it's only 3 a.m."
The Hamilton Place Mall in Chattanooga, Tenn., opened at 5 a.m. According to spokesman Jeff Odom, throngs of shoppers crowded into the mall over the first hour to get an early start on the 5 a.m. to 11 a.m. "early bird" discounts ranging from 20 percent to 50 percent in specialty stores such as teen clothier Aeropostale (Charts).
"So far it's looking like a good and early start to Black Friday, characterized by very calculated shoppers," said Marshal Cohen, chief industry analyst with NPD Group.
"Everybody is very focused on the discounts. People are going to stores with Black Friday circulars in their hands," Cohen said.
Chilly temperatures and a light dusting of snow didn't deter people from lining up at Columbia Mall in Grand Forks, N.D.
Sears' 5 a.m. opening drew a big line partly because the department store chain handed out $10 reward cards to the first 200 people at any Sears' location nationwide.
Sears' spokeswoman Gail Lavielle said an all-day 50% off on Craftsman tools was one of the biggest draws for its shoppers.
The National Retail Federation (NRF) said electronics and toys appeared to be the big winners of the day, with retailers offering big bargains on high definition televisions, life-sized robots, MP3 players and game systems.
"Many stores offered substantial savings on big-ticket items and it seems that, for many shoppers, the deals were simply too good to pass up," NRF CEO Tracy Mullin said in a statement.
The group anticipates holiday sales will grow 5 percent to $457.4 billion, slower than last year's 6.1 percent increase.
Who's got the best deals?
Wal-Mart (Charts), the world largest retailer, unveiled its big holiday deals weeks ahead of Black Friday, slashing prices on popular merchandise such as toys, gadgets, flat-screen TVs and home appliances.
But the retailer's Web site walmart.com suffered an early morning snag and was inaccessible intermittently in the first part of the day. Company spokeswoman Amy Colella attributed the problem to "a higher than anticipated traffic surge."
As expected, toys and electronics were among the busiest areas at the Wal-Mart in Union, N.J.
One of the most sought-after items Friday was a 20-inch flat-screen Symphonic TV set for $68.97.
"It's absolutely amazing to me that in each of the six Wal-Mart stores I've been to this morning, people were only buying deals that were in the circular and not really touching any other part of the store," Cohen said.
That might become a problem for Wal-Mart since the retailer was hoping its aggressive price slashing Friday would rev up recent sluggish sales trends. For November, Wal-Mart expects sales at its stores open at least a year - a key retail measure known as same-store sales - to be flat versus last year.
However, Cohen noted the crowds were even bigger at some Target (Charts) stores. "I think Target outmarketed Wal-Mart," explained Cohen. Here's how: "Target advertised hundreds of deals for Black Friday and didn't just put out one circular worth of deals," he said.
Wal-Mart declined to comment on traffic and sales trends at its stores. The retailer is expected to report its preliminary November sales results, which include Black Friday sales, on Saturday.
Hunting for T.M.X. Elmo
Toy industry analysts pegged T.M.X. Elmo, video game consoles PlayStation 3 and Wii and HDTVs as a few of the hottest things to buy this holiday season.
But good luck finding them. Many stores already posted "out of stock" signs on these products days ahead of Black Friday.
Ernie Speranza, chief marketing officer with toy retailer KB Toys, told CNNMoney.com that Elmo still remained an elusive item for the company.
"We don't have T.M.X. Elmo but we're taking customers' names and money upfront and we'll call them as soon as we get more shipment," he said. Besides Elmo, he listed Dora, Barbie, electronic learning systems from LeapFrog and other popular toys that parents were grabbing off store shelves.
While the Elmo shortage is worrisome, Speranza still is optimistic for a good season overall. (See what all the Elmo fuss is about)
"The year-over-year sales comparisons look much better just based on the length of the lines outside our stores," he said.
But there were apparently no availability issues regarding Elmo at the Toys 'R' Us flagship store in Manhattan. A company spokesman told CNNMoney.com that the retailer expects to have "thousands of Elmos available across the country today."
Gunning for gadgets: TVs, computers, PS3
At the Target store in Brooklyn, N.Y.'s Atlantic Terminal Mall, employees scrambled to replenish inventory as crowds of shoppers snapped up everything from TVs and cameras to grills and Christmas trees.
One hot item was a 19-inch TruTech flat-screen TV, selling for $179. A few customers even loaded up on four of the television sets.
"I see everyone getting it, but I don't really know how much it's worth," said 40-year-old Margalie Simon, who was carrying her own TruTech TV.
Consumer Electronics Association (CES) estimates that sales of flat-panel TVs will top $7.3 billion this year, up 85 percent from a year ago.
Shoppers rushed to a Manhattan Best Buy (Charts) store at 5:00 a.m. in hopes of grabbing a $379 laptop computer and other deals on flat-screen TVs, including one 32-inch model priced at $479. However, the store was out of the Playstation 3 and Nintendo's Wii.
Store manager Armando Lopez estimated that traffic at that Best Buy store was already up 40 percent over last year in the first three hours.
The day after Thanksgiving is dubbed "Black Friday" because it's when retailers are said to finally move out of the red, representing losses, and into the black, indicating profits.
It also marks the start of the four-week gift-buying shopping blitz leading up to Christmas.
November and December sales are critical because the two months together account for as much as 50 percent of their profits and sales.
Eager to capture early holiday sales momentum, merchants battle each other on Black Friday by offering steep discounts on the season's hottest products in a bid to lure bargain-hungry shoppers and lock in critical holiday dollars.
What's the outlook for this year? Good but not great. Despite concerns that a cooling housing market has made homeowners feel less wealthy and less inclined to shop, overall retail sales have increased so far this year.
According to some retail analysts, consistent income growth combined with the recently falling gas prices helped offset the negative housing effect and should continue to be a spending catalyst in the coming weeks. (Full story)
The NRF expects about 137 million shoppers will hit stores over the three-day Thanksgiving weekend. However, the busiest shopping day of the year typically is the Saturday before Christmas, not Black Friday.
E-tailers are projected to have a stellar season this year, but industry watchers expect in-store shortages could also help pump up traffic and sales at many Web sites.
ComScore Networks estimates online retail sales over the Thanksgiving weekend are forecast to reach $1.15 billion, up 24 percent from the same period last year, while total holiday-related buying on the Internet is forecast to jump 24 percent to more than $24 billion.
-- CNNMoney.com staff writers Aaron Smith, Keisha Lamothe, Paul La Monica and Steve Hargreaves contributed to this report.