Black Friday sales up three per cent amid economic downturn

Business Materials 30 November 2008 05:16 (UTC +04:00)

Holiday retail sales in the US were up three per cent from last year, the smallest gain on Black Friday in three years, a research firm said Saturday, dpa reported.

The day after the Thanksgiving holiday typically marks the beginning of the most intense period of the holiday shopping season, and can account for a third of stores' annual profits. It is known as Black Friday because historically shops put their profits in the black thanks to the huge influx of customers.

Consumer spending comprises more than two-thirds of the US economy, which is slowly sliding into a recession. According to government data, Americans are already cutting back. Spending was down for the fifth consecutive month in October, the US Commerce Department said.

From a little after midnight Friday, bargain-hunting shoppers crowded malls, superstores and high streets to cash in on steep discounts by recession-hit retailers, who were bracing for their worst season in years.

Sales rose 10.6 billion dollars Friday, up three per cent from last year, according to Chicago-based research firm ShopperTrak RCT. This year's slight increase comes after the 8.3-per-cent jump last year.

"A decent Black Friday figure doesn't predict the whole season. The question is, how much momentum we can keep in this challenging economic environment," Craig Johnson, president of retail consulting firm Customer Growth Partners LLC, told Bloomberg financial news agency.

Hoping to lure in penny-pinching customers impacted by the sluggish economy and increasing unemployment, many retailers were offering special discounts and heavy price cuts.

The National Retail Federation has said that despite the economic downturn, overall sales this season are expected to grow 2.2 per cent to 470.4 billion dollars.

According to a Gallup poll, consumers may spend an average of 616 dollars on holiday gifts this year, down 29 per cent from a year earlier.