Doom du Jour No. 11

My assumption is that this is more of the same: Putting off immediate pain for a severe bite in the ass, at a later date. Sales may have been higher on Friday, but my thinking is that fourth quarter retail profits will be lower because of discounted merchandise. The market will do OK today, based on a better-than-expected Friday. The market will do crappier in another two months, based on a worse-than-expected earnings report.

I'm still just disgusted beyond belief at the Wal-Mart fiasco. When did we become "consumers" and not "humans?" About the time we began trampling each other to get at a discounted television, I'm thinking.

Enough of the rant. Here's the sales story, courtesy of the Wall Street Journal:

The holiday shopping season got off to a better-than-expected start, as retailers reeled in cautious shoppers with massive discounts like "buy one get one free" sweaters at Gap Inc. stores, $200 iPod Touch music players from Amazon.comInc., and 26-inch LCD TVs at Target Corp. sites for $299.

In a survey of 3,370 shoppers, the National Retail Federation estimated shoppers spent an average of $372.57 over the weekend, up 7.2% over last year's $347.55.

Although unprecedented discounts lured shoppers into stores, momentum ebbed Saturday, raising concerns that shoppers were merely exploiting the "door-buster" deals and then walking out of stores. Indeed, as many as 70% of consumers purchased only deeply-discounted merchandise Friday, according to Charleston, S.C.-based America's Research Group, which polled 700 shoppers over the weekend.

"They didn't stay if they didn't get the deals," says Britt Beemer, the firm's founder.

In the NRF survey, which was conducted by BIGresearch and includes spending data for Thursday, Friday and Saturday and estimates for Sunday, more than 172 million shoppers visited stores and Web sites over Black Friday weekend, up from 147 million shoppers last year. Black Friday traditionally marks the day when retailers turn a profit for the year.

But in a sign that sales over the next several weeks are likely to slow, shoppers said that by the end of the weekend they had completed a greater portion of their holiday shopping -- 39.3% compared to 36.4% last year, according to the NRF survey.

A different survey, performed by ShopperTrak RCT Corp., found sales on Friday were up 3% over last year, to $10.6 billion. The gains marked a deceleration of growth compared with 2007, which posted 8% sales gains. ShopperTrak will release data for Saturday and Sunday on Monday.

Online, sales on Friday were relatively flat, rising 1% to $534 million, according to comScore Inc., a Reston, Va., market-research firm. When Thanksgiving and Black Friday were combined, online sales rose 2% over last year. Online sales from Nov. 1 through Friday totaled $10.41 billion, down 4% from last year.

Following two months of sharply declining sales, many retailers moved to dramatically mark down merchandise, despite facing lower profit margins. "The main goal was to work through inventory," says Brendan Hoffman, chief executive of Lord & Taylor, where traffic was slower on Saturday than on Friday but better than the chain originally predicted.

Best Buy Co. President Brian J. Dunn said it was unlikely that prices would go much lower than they did over the weekend, when the retailer advertised products like a 40-inch Sony HDTV for $899.

At Macy's Inc.'s upscale Bloomingdale's chain, shoppers turned out for the heavy discounts including 40% off contemporary sportswear, 50% off men's shoes and $15 gift cards for every $100 spent. Bloomingdale's Chief Executive Michael Gould noted that traffic Friday was down slightly from the year earlier, but stronger than he expected it to be.

Crowds were visibly thinner in many areas by Saturday. At Gurnee Mills, an outlet mall in Gurnee, Ill., hundreds of parking spaces remained open Saturday, just two hours after the mall's 9 a.m. opening. "I wasn't really expecting a huge turnout today," Randy Ebertowski, general manager of Gurnee Mills, said midday Saturday. "I think people came out in force yesterday and maybe they are taking a little break now." Still, Mr. Ebertowski said later he believes traffic picked up later in the day and sales at some stores may have exceeded last year.

Similarly, a Dallas Wal-Mart supercenter that had been packed with shoppers early Friday was practically deserted by Saturday afternoon. All the electronics door busters -- such as a $388 42-inch television -- were sold out by Saturday morning, save for a few Kodak cameras priced at $149.

A number of Taubman Centers Inc.'s malls -- in Connecticut, New Jersey and Virginia -- reported that sales at stores surveyed on Saturday were flat or decreased slightly on average, the company said.

Many consumers said they couldn't pass up the steep discounts offered by retailers. But they didn't plan to splurge much beyond the sales. Candace Adeszko, 25 years old, was buying a sweater, five shirts and corduroy pants at J.Crew in the Chicago Premium Outlets in Aurora, Ill., on Thanksgiving that she estimated cost $75 to $100 total. "If I can get stuff cheap now, I will," said the graduate student from Downers Grove, Ill., who was at a Midnight Madness event for the first time. She has cut her spending to all but necessities in recent months due to worries about whether she will have student loans in the future.

Across the country, discount retailers continued to get a boost as cash-strapped consumers traded down. "Wal-Mart is like my best friend now," said Stephanie Fasulo, a special-education teacher from Southington, Conn., while admiring the silver jewelry at a Tiffany & Co. store in New York. Ms. Fasulo, 23 years old, says she usually does her holiday shopping at Saks Fifth Avenue and Macy's but this year she was skipping Saks and shopping at Target and Wal-Mart.

Luxury retailers, which last year benefited from tourist traffic and the weak dollar, were pulling out all the stops to get shoppers to buy designer ensembles, shoes and handbags. Since orders are typically placed six to nine months before products hit stores, many upscale retailers were caught off guard by the dramatic change in consumer sentiment.

The women's shoe departments of Saks and Bergdorf Goodman in New York, where footwear was marked down 40% to 70%, were packed with shoppers. Saks had to install a velvet rope to control crowds hungry for an additional 50% off already discounted designer shoes. By Saturday afternoon, Saks's flagship store was mobbed with shoppers rummaging through the bargain bins in the first-floor handbag area, where Dolce & Gabbana and Chloé bags were being sold for an additional 50% off.

The discounts are expected to keep up on Monday -- known as "Cyber Monday" because it is the day consumers return to work and start buying on the Internet -- as 83.7% of retailers are planning special promotions, up from 72.2% last year, according to a survey by Shop.org, a division of the National Retail Federation. The aggressive promotions follow a weak October, when online sales grew 1%, the slowest rate since 2001, according to comScore.

Discounter Target, whose sales have declined precipitously in recent months, has high hopes for Cyber Monday, typically its second-highest day for online traffic behind Thanksgiving.

Target, which expects traffic on Monday to be up 40% over last year, will have 1,500 items on sale between Nov. 30 and Dec. 6, including electronics, toys, home decor and apparel; about 500 of the items will be offered at their lowest prices ever, Target says.