Black Friday 2010: Slashing prices like crazy

black_friday_walmart.top.jpgShoppers hungry for Black Friday deals are in luck, retailers like Wal-Mart and Target are already slashing prices. By Parija Kavilanz, senior writer


NEW YORK (CNNMoney.com) -- After two-years of belt tightening, consumers are feeling the urge to splurge on this year's hottest holiday deals. Retailers eager to lure shoppers in are slashing prices -- even before Black Friday.

Still, questions remain about whether there's enough pent up demand to help sellers recover from dismal sales.

The day after Thanksgiving, or Black Friday, is considered to be the unofficial start to the November-December holiday shopping season. Those two months can account for 50% or more of merchants' profits and sales for the full year.

Holiday sales are closely watched because they're a pretty accurate barometer of the health of the economy, since consumer spending fuels more than two-thirds of it.

Shop-till-you-drop? Not quite: The National Retail Federation estimates 2010 holiday sales will increase 2.3% to $447.1 billion, much improved from last year's 0.4% uptick and the dismal 3.9% sales decline in 2008.

Monthly retail sales have increased in four of the past five months and same-store sales, or sales at stores open at least a year, have been on the rise for 14 consecutive months.

"Consumers have endured two years of economic body blows, but have been slowly picking themselves off the mat since last year, despite the employment woes," said Craig Johnson, president Customer Growth Partners, a retail consultancy and research firm.

Marshal Cohen, chief retail analyst with market research firm NPD Group, agreed.

"More consumers have reconciled with a 10% unemployment rate," said Cohen. "For the 90% of Americans who still have their jobs, and have weathered the recession, they are not as concerned about their future as they were a year ago."

Who is willing to shop a little more freely? Affluent shoppers, men and "Millennials," or Gen X shoppers, said Candace Corlett, president of retail consulting firm WSL Strategic Retail.

But that optimism is tempered.

"Last year marked the beginning of the shrinking gift list," Cohen said. "If you were a distant relative, you got knocked off the list." That shortened list hasn't grown back this year, he said.

"Consumers are shopping with their brakes on," WSL's Corlett said. "They are sticking to stores they can afford and fit their economic situation."

To that end, millions of shoppers will head to discounters first for Black Friday.

Cut prices, and do it first: Merchants are tripping over each other to ensure they have the best and biggest deals -- and to be first.

Wal-Mart (WMT, Fortune 500), the world's largest retailer, is on a mission to dominate not just Black Friday, but the entire holiday shopping season.

For consumers, it's like hitting the jackpot on holiday deals because Wal-Mart's pricing moves are often matched by its competitors.

The retailer has already slashed prices on holiday favorites such as toys and electronics and is offering free online shipping on 60,000 holiday items.

Other retailers have countered by also offering Black Friday-like deals early. Some sellers, such as Toys R Us and Sears (SHLD, Fortune 500), are even opening their stores to bargain hunters on Thanksgiving this year

"A retailer has to become first in consumers' mind or they will lose the sale," Cohen said.

--Are you a Black Friday shopping fanatic? Tell us what you love -- and hate -- about Black Friday. Email your response to parija.bhatnagar@turner.com and you could be part of an upcoming article. For the CNNMoney.com Comment Policy, click hereTo top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play

Search for Jobs

Index Last Change % Change
Dow 18,132.70 -81.72 -0.45%
Nasdaq 4,963.53 -24.36 -0.49%
S&P 500 2,104.50 -6.24 -0.30%
Treasuries 2.00 -0.01 -0.69%
Data as of 12:24pm ET
Company Price Change % Change
Apple Inc 128.46 -1.96 -1.50%
Microsoft Corp 43.85 -0.20 -0.47%
Facebook Inc 78.97 -1.44 -1.79%
Cisco Systems Inc 29.51 -0.40 -1.34%
Intel Corp 33.25 -0.40 -1.19%
Data as of Feb 27
Sponsors

Sections

Berkshire Hathaway CEO Warren Buffett released his 50th annual letter to shareholders. The Oracle of Omaha thinks the next 50 years will be great and knows who will replace him. More

Potential presidential candidate says that improvement in unemployment rate is due to millions of jobless not being counted. More

With the death of Leonard Nimoy, the actor who played Star Trek's Spock, we remember his character's legacy: The technology we use every day. More

The top 5 consumer complaints have to do with identity theft, debt collectors, imposters, telephone companies and banks. More