Retailers look to keep Black Friday momentum going

Sat Nov 26, 2011 11:41pm IST

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(Reuters) - With the intensity of Black Friday shopping starting to fade, U.S. store chains know they are under pressure to keep the sales momentum going as they enter the next phase of a competitive holiday shopping season.

Chains such as Macy's Inc, Target Corp and Best Buy reported large crowds this year on Black Friday, the day after Thanksgiving that sees millions of Americans start shopping more intensely for the holiday season.

With the National Retail Federation only expecting retail sales to rise a modest 2.8 percent this year, store chains say it is risky to take their foot off the pedal, even with a month to go, including an extra Saturday on the calendar this year.

"Everyone is trying to get the edge to get the people who need to spread their dollars," said Kevin Regan, a senior managing director at FTI Consulting.

After very deep discounts on Thanksgiving and Black Friday, retailers were still offering deep bargains on Saturday morning.

A Gap Inc store in New York's Times Square was boasting of 60 percent off everything. Aeropostale Inc shouted out on its website that everything was 50 percent to 70 percent off in its "Saturday Blowout."

Retailers know that consumers are struggling in the face of higher gas prices than last year and a tough job market.

While they try to keep the shopping interest up, hopefully they will not see the riotous crowds that brawled on Friday over video games, waffle irons and towels.

One of the most outrageous incidents of the day was in the Los Angeles area, where up to 20 people were injured after a woman at a Walmart used pepper spray to get an edge on other shoppers in a rush for Xbox game consoles.

The tough economy, coupled with smart phones leading to highly sophisticated price-comparison habits, mean the pressure to offer consumers something special and affordable is intense, even during the lull that often follows the long holiday weekend.

"We have put together an entire promotional program for the whole season. So we don't shoot all our bullets on the day after Thanksgiving," Jamie Brooks, SVP Retail Services for Sears Holdings told Reuters on Friday.

Deep discounts alone may not be enough.

Macy's Black Friday campaign featured an ad with teen entertainer Justin Bieber. And Macy's Chief Executive Terry Lundgren said on Friday the chain's roster of exclusive products would be a centerpiece of its holiday promotions.

Those efforts, in addition to the requisite deals, must be part of any retailer's strategy to stand apart.

"That's the name of the game now, promote promote promote," said AlixPartners managing director David Bassuk. "They've got to keep it coming."

Retailers are also trying to strike the right balance between not having too much inventory - and having to sell it at massive profit-sapping discounts - while making sure they do not run out of popular items and anger customers.

"The most important thing to our customers is when we see something in an ad and come into the store, we have to have it," said J.C. Penney Co Inc executive Mike Thielmann.

Online shopping soared on both Thanksgiving and Black Friday, suggesting that Cyber Monday - the biggest online shopping day of the year - could be a banner day for retailers with the right mix of discounts, special offers and the now commonplace free shipping.

"The big question for all of us is, will consumers continue to come out through the rest of the season," said John Squire, chief strategy officer of IBM Smarter Commerce.

His firm said online sales soared 39.3 percent on Thanksgiving and 24.3 percent on Black Friday versus last year, with robust growth in searches and sales on mobile phones and tablet computers.

Many executives sounded a cautious note about the economy, despite the promising Black Friday. But they are taking nothing for granted, given the tepid outlook for consumer spending.

"The customer is clearly looking for value, that is something that is going to be with this consumer for a long, long time," Lundgren said on Friday.

(Reporting by Phil Wahba in New York and Jessica Wohl in Chicago; additional reporting by Dhanya Skariachan; editing by Philip Barbara)

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