Strong start - for some

Wal-Mart sees sluggish sales for November, including Black Friday results. But others see healthy business.


NEW YORK (CNNMoney.com) -- Wal-Mart Stores Inc. predicted surprisingly weak November sales on Saturday, but a survey of thousands of retail locations pointed to a relatively healthy start to the holiday shopping season.

Wal-Mart estimated that November sales fell 0.1 percent at its U.S. stores open at least a year - the forecast includes sales on Black Friday. At the same time, a survey by ShopperTrak estimated a 6 percent sales increase overall for the day, to $8.9 billion.

Wal-Mart's results would mark the company's first monthly same-store sales decline since April 1996. The retailer had expected same-store sales to be flat compared with the same period last year.

Wal-Mart and other major retailers will release final November sales reports on Thursday.

Stores enjoyed big crowds around the country on Black Friday, so called because it's when retailers are said to move out of the red (operating at a loss) and into the black. November and December account for as much as half of retailers' profits and sales.

"Although we anticipated a solid consumer turnout for Black Friday, this data shows an even larger increase than expected as consumers proved they were willing to spend," said Bill Martin, co-founder of ShopperTrak, in a statement.

J.C. Penney (Charts) said its holiday season was off to a good start, with brisk foot traffic and strong demand for categories such as home entertainment, jewelry, children's clothing and housewares, Reuters said.

The National Retail Federation (NRF) expects about 137 million shoppers will hit stores over the three-day Thanksgiving weekend.

The 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.

The question is how much of the ringing at cash registers came from heavily discounted goods.

"You already know it's a high traffic day," Laura Richardson, a consumer analyst at BB&T Capital Markets, told Reuters. "What I'm looking at is traffic relative to what I'm used to seeing and the promotional efforts retailers are making. A lot of companies I follow are cutting (prices) more than last year and not getting great traffic. That's not a great sign for sales or profits."

Michael McNamara, vice president of research and analysis at MasterCard's SpendingPulse, told Reuters that while hot items such as the PlayStation 3 video game system have generated considerable buzz, they are only a tiny portion of retailers' overall sales. He said rather than focusing on Black Friday crowds, investors should pay close attention to October sales trends, which showed a dramatic slowdown in growth year-over-year heading into the holiday season.

"You're looking at (sales) growth rates that are about half of what they were last year," he said. "The momentum that we have coming in is definitely down several notches."

Wal-Mart vs. everybody

Wal-Mart (Charts) 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.

Wal-Mart also announced a slew of further discounts in the early hours of Thanksgiving, including Microsoft (Charts) Xbox 360s for $399 and KitchenAid Classic Stand Mixers for $149.

Marshal Cohen, chief industry analyst with NPD Group, said on Friday that the crowds were even bigger at some Target (Charts) stores. "I think Target outmarketed Wal-Mart," said Cohen.

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.

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 R. La Monica and Steve Hargreaves contributed to this report.

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-- Reuters contributed to this story.
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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.