NEW YORK – The Thanksgiving shopping weekend doesn't appear to have been the disaster some had feared, but tempered buying and unprecedented deep discounts likely resulted in soft sales. Now, online retailers are ramping up heavy-duty deals to turn skittish shoppers into "Cyber Monday" spenders.
"Cyber Monday," a term coined by the trade group National Retail Federation in 2005 to describe the Monday after the Thanksgiving holiday, is the unofficial kickoff for the busy online retail season.
The nation's merchants are struggling to entice financially strapped shoppers for the rest of the holiday shopping season, expected to be the weakest in decades. Online sales are expected to be fairly flat after years of strong growth.
"The consumer clearly is showing us that there is a holiday to be had, but the consumer wants bigger deals. And they are not panicking," said Marshal Cohen, chief industry analyst at NPD Group, a market research group. "They're willing to wait it out at almost any price."
Cohen predicts sales for the weekend, the traditional start of the holiday shopping season, were at best even with the same holiday weekend a year ago. The trade group National Retail Federation expects overall holiday spending will total about $470.4 billion, a 2.2 percent rise from a year ago and the slowest growth since 2002, and online retail is being hit along with brick-and-mortar stores.
If stores are already offering up to 75 percent off — a move likely to hurt profits — what more can they do? With mounds of inventory that merchants need to clear, Cohen said he expects retailers will be doing more two-for-one deals.
Still, the crowds that turned out for the early morning specials on Friday were a welcome relief to the nation's retailers — who since mid-September have suffered from the most dramatic falloff in spending in decades amid a ballooning financial crisis.
Merchants opened their stores as early as midnight on Thursday, holding their breath wondering if shoppers would snap up the pre-dawn specials. But while the crowds did come out to buy, many analysts say they were thinner than last year, and according to some accounts, the pre-dawn buying binge fell off sharply during the remainder of the weekend.
Shoppers were also focused on bargains and smaller-ticket, practical items like blenders, apparel items such as sweaters and video games, as they worry about layoffs, tightening credit and shrinking retirement funds.
Even online spending, once a bright spot in retailing, has been hit hard by economic woes in recent months. ComScore, an Internet research company, reported Sunday that online spending was up a modest 2 percent for the combined Thanksgiving Day and Friday, compared with the year-ago period.
Stephanie Denney, a stay-at-home mom of two from Brooklyn, Mich., who was outside the Disney store on Chicago's Michigan Avenue on Saturday, said she and her extended family had decided over the Thanksgiving holiday to cut back on Christmas spending.
"As a family, we're doing just kids," she said, adding she has been scaling back for some time.
"There's less money, so there's less to spend," she said. "Across the board, anything I can cut — cell phones, cable, eating out."
New York-based retail consultant Walter Loeb said he expects sales for the weekend to be below year-ago levels, based on discussions this weekend with key executives from discounters and department stores.
But he added, "It wasn't as bad as some feared. ... People were buying, but they bought cheap, and the results were not as good."
Loeb, like many analysts who predict a rare contraction in spending for the holidays from a year ago, expects a 1 percent drop in total retail sales for the November and December period, compared with the year-ago period.
Karen MacDonald, a spokeswoman at Taubman Centers Inc., which operates 24 malls in 11 states, said that based on a sampling of malls, business on Friday was anywhere from unchanged to up mid-single digits. But on Saturday, sales were unchanged to down slightly.
"Friday was encouraging, but Saturday wasn't as good as we hoped," she said.
But Toys R Us Chief Executive Jerry Storch reported on Sunday that customer traffic was at least as strong this past weekend as the Thanksgiving weekend a year ago, and said he was "definitely pleased with sales."
"We are very encouraged by the response," he said.
A more complete sales picture of how the Thanksgiving shopping weekend fared won't be known until Thursday, when the nation's retailers report November same-store sales, or sales at stores opened at least a year.
According to preliminary figures released Saturday by ShopperTrak RCT, a research firm that tracks total retail sales at more than 50,000 outlets, sales rose 3 percent to $10.6 billion on Friday from the Black Friday a year ago.
ShopperTrak RCT is expected to release data for the combined Friday and Saturday period on Monday. Bill Martin, ShopperTrak's co-founder, said he wasn't sure if the momentum was sustained through the rest of the weekend.
The day after Thanksgiving — dubbed Black Friday because it historically was the day when a surge of shoppers helped stores break into profitability for the full year — has been fading in importance particularly this year as stores were even more aggressive in discounting and pushing up sales event.
While Black Friday isn't a predictor of the holiday season, it does act as a barometer of consumers' willingness to spend. Complicating matters is a shorter buying season — 27 days between Black Friday and Christmas — instead of 32 last year, putting more pressure on retailers.
Clearly economic woes played a key role in how shoppers bought this weekend. The managers of Dillard's and Macy's departments stores at Greenspoint Mall in north Houston both said weekend crowds met expectations, though shoppers seemed to be more bargain-hungry than in recent years.
At the mall's Macy's, one of a dozen in the Houston area, clothing, jewelry and home items — but not high-end brands — were selling well, said manager Ron Misrack.
"People seem to be going to promotional items," Misrack said. "If you look at our books, you can see the specials, and people seem to be going for those items."
"This year, we've decided to just go for broke. Yeah, the economy might be in bad shape, and times might be tight, but putting another four or five hundred dollars to the debt we already owe isn't going to make that much of a difference," she said. "Our New Year's resolution is to get in better shape financially, eat in more, watch what we spend. But, until January 1, we're not going to worry about it."
AP Business Writers John Porretto in Houston, Joe Bel Bruno in New York and David Fischer in Miami; AP Writer Rupa Shenoy in Chicago; and AP Retail Writer Ashley M. Heher contributed in Chicago contributed to this report.