Foreign shoppers turn out for Black Friday
Despite a stronger dollar, tourist shoppers from overseas are still out in force on Black Friday.
NEW YORK (CNNMoney.com) -- At 7:30 Black Friday morning, 34th Street in Manhattan was already teeming with shoppers; nearly everyone on the street was carrying at least one bulging bag. And a good number of the bargain hunters were from other countries.
With the dollar weakening against many currencies during the middle years of the decade, international travelers came to the United States for big bargains. And now, as consumer spending here cools, income from these foreign sources this holiday season could be crucial for many retailers.
But with the dollar growing stronger against many major currencies, most stores better not count on a getting as big a boost from foreigners this year, according to Ellen Davis, a spokeswoman for the National Retail Federation.
"Previously, because of the exchange rates, we saw tremendous holiday shopping seasons," she said. "This year with the weakening global economy, we're seeing retailers all over the world struggling. Consumers are pulling back."
International travel to the United States had been holding up quite well this year with 34.9 million visitors by the end of August, a 9% jump compared with the same period a year ago. They spent $96.3 billion, up 24%, according to the Commerce Department.
Since then, however, economies have slowed from Iceland to China as the U.S. currency gained ground. British pounds, for example, have lost 40% of their value against the dollar compared with last year at this time.
Linda McMeiken, visiting New York from Surrey, England, was disappointed about the dollar-pound exchange rate, which had turned considerably against her since her last trip to the states in early 2008. "It was two dollars to a pound then," she said. "Now it's 1.4. This trip, I don't think the prices are too good."
Earlier this week, she checked out a menu at Ben and Jack's, a steakhouse in midtown Manhattan, and judged it "just as expensive as London."
Many Canadians also have seen their currency edge erode as their dollar fell 23% against the greenback since last November. Mexican pesos are also down about the same amount. Most major Latin American currencies have declined as has the Russian ruble.
Euro-based visitors are faring a little better than most but it's still off this year. The dollar is trading for about 0.77 euros, up from 0.67 a year ago. That means goods bought now are about 15% more expensive than last Black Friday. Despite that, many euro-travelers believe prices are still cheap enough here to substantially offset the cost of airfare, hotels and restaurants.
Some of the more bullish visitors at Macy's Black Friday sale morning were from Ireland. Several expressed satisfaction with bargains they were finding.
Lorrain Downey of Dublin, who was in Macy's mostly to buy clothing and gifts, said, "There's a big difference in prices." Louise Cahill of Tipperary called New York prices "very cheap.
Coleman Moore and his family found prices so good they were planning to shop most of Friday and Saturday as well. He said prices were not only terrific, but as a bank employee in Dublin, he had gotten a very good exchange rate as well - about 1.31 dollars per euro rather than about 1.25. With two kids to buy clothing and accessories for, that helps.
"We have a very expensive 20-year-old," he said, "and a very expensive 16-year-old as well."
A Scottish couple, Margaret and Peter Hahn, thought they were still doing quite well shopping in the States even though the pound had dropped so much. She said, "Prices are still a lot lower than at home. We're going to buy clothes and watches, and we have five grandsons. We'll get gifts for all of them."
For Rob Halpern and his family, who arrived earlier in the week from Sydney, Australia, one of the main purposes of the trip was shopping.
"Nearly everything is imported to Australia," said Halpern, who owns a sports memorabilia business, "and the prices here are a lot sharper. We're buying name-brands like Levis and Nike."
The family hit Macy's flagship store at 34th St. before 8:00 to try to beat the worst of the throngs of shoppers. "We were here for Christmas before, and it was too busy," said Halpern, shivering at the memory. He still likes American prices even though the Australian dollar has lost more than 35% of its value against the dollar since last Black Friday.
One thing that can make shopping worthwhile, even as exchange rates get less favorable, is the no-holds-barred sales that many stores run on Black Friday.
A young Israeli woman, who only gave her first name of Orit, was in Macy's early Friday after spending the night on line at a nearby Best Buy. She had lined up there at 10 p.m. to buy a bargain notebook computer.
"Finally, at four o'clock they gave me a ticket and I was able to buy it at five," she said.