Black Friday retail spending predictions widely varied

New York: Americans headed to department stores in droves in the dead of night on Thursday to kick off the holiday shopping season, though many said they had pared back how much they would spend.

Black Friday, the day after US Thanksgiving, is often the single busiest shopping day of the crucial holiday season, which accounts for nearly one-fifth of the retail industry's annual sales.

The annual festive ritual of American consumerism is now being monitored closely for signs the US shopper is again ready to propel the economy forward, after the global fin-ancial crisis last year led to the worst holiday season in nearly four decades.

Debra Diriwachter, a supermarket cashier, waited for several hours outside the Queens Centre mall in New York before doors opened at 11pm on Thursday. She is cutting back her gift budget this year and will only use cash for purchases. "I don't like to be in debt and if I know what I am spending, that's good," she said.

The first 200 shoppers entering the mall, some in their pajamas, were handed $10 (Dh36,73) gift cards to whet the appetite.

"This is beautiful. I am so happy," said Roberto Tomala. "This is a good motivation to everybody. In this situation, even $10 helps to buy something" Up to 134 million US consumers say they may shop for holiday gifts this weekend from Black Friday through Sunday, according to the National Retail Federation.

That is up from last year's survey, taken weeks after the global financial crisis erupted, but still below consumer Black Friday plans reported ahead of the shopping season in 2007.

Protecting profits

Discount retailers like Wal-Mart Stores and Target are expected to see the heaviest traffic over the holiday weekend, followed by department store chains.

They and their industry peers have spent the past year shrinking inventory, shutting stores or scaling back new openings, to avoid steep discounts and protect profits.

"Last year they literally gave the merchandise away," said Marshal Cohen, senior analyst at retail consultancy NPD Group. "This year, they have to sell half as much as last year to break even... so even if they don't sell as much they're going to make money."

Strong turnout

Some industry experts expect a strong turnout on the Black Friday weekend, but cautioned that did not mean a strong holiday season, as shopping tails off in the weeks before Christmas.

The unsettled state of the US economy, with a 26-year high in unemployment and tighter access to credit, has industry holiday sales forecasts varying widely from a decline of three per cent to an increase of two per cent.

Early hopes for a consumer-led recovery have pushed retail shares up 47 per cent this year, compared with a 23 per cent rise for the Standard & Poor's 500 Index.

While most research in the last two months showed shoppers planned to spend less or the same in 2009 from a year ago during the holidays, that stance may be softening. Nearly one-third of consumers surveyed by Deloitte said they now expect to spend more than they had planned a month or two ago.