Retailers banking on Black Friday

For Shawn Johnson, a 39-year-old resident of Northwest Washington, the day after Thanksgiving is the real holiday.

Ms. Johnson, a bargain hunter and self-proclaimed shopaholic, is not afraid to brave the cold or crowds to get a good deal on Black Friday, the Friday after Thanksgiving and the official start date of the Christmas shopping season.

On Ms. Johnson’s list of must-haves this year is a digital camera for herself and a laptop and a television for her niece and nephew.

“This year, we’re heading to Best Buy, Target and Wal-Mart,” Ms. Johnson said. “I get so excited when I find a good sale. I don’t believe that you should ever pay the full price.”

Paying full price will not be a problem this year as retail outlets continue to slash prices. According to a recent report by BDO Seidman LLP, a market-research firm, 96 percent of retailers will increase promotions and discounts this year to entice shoppers.

The economy is putting added pressure on consumers this Christmas season. The official jobless rate of 10.2 percent is a 26-year high. Worse, the broadest measure of underemployment, which includes out-of-work people too discouraged to look for a job and part-time workers who want full-time employment, reached 17.5 percent in October, probably the highest level since the Great Depression.

The bigger picture shows households battered by a collapse of net worth. According to Federal Reserve data, household net worth in the second quarter was more than $11 trillion, or 18 percent, below its 2007 peak. Much of the plunge is attributed to plummeting home prices, which, in September, were nearly 30 percent below their peaks reached in 2006, according to the S&P;/Case-Shiller composite index for 20 major metropolitan regions.

On the plus side for housing, new-home sales jumped by 6.2 percent last month, reaching an annual rate of 430,000, the highest since September 2008, the Commerce Department reported Wednesday.

Retailers remain optimistic as industry analysts forecast a slight uptick in Black Friday retail sales, coming off the momentum of a jump in consumer spending in October and a big decline in jobless claims last week.

The Labor Department reported Wednesday that first-time claims for unemployment benefits plunged by 35,000 last week to 466,000, a 14 month low. Inflation-adjusted consumer spending jumped 0.4 percent in October, the Commerce Department reported Wednesday.

There is a brewing debate among analysts on a post-Black Friday shopping strategy. Some analysts are advising consumers to buy big-ticket items early, while others are advising shoppers to take their time and wait the deals out.

Market research firm IBISWorld forecasts a 2.8 percent increase in retail sales over last year, totaling $42.9 billion. Toon van Beeck, the company’s senior analyst, is advising shoppers to get their most important holiday items sooner rather than later.

“Consumers can’t wait this year. They are going to have to shop early to get all the items on their gift lists,” said Mr. van Beeck. “This year, inventories levels are going to be down, and stores are going to sell out.”

Ted Vaughan, a partner in BDO Seidman’s retail and consumer products practice, expects in-store sales to be relatively flat this year. “We looked at Black Friday and Cyber Monday - the Monday after Thanksgiving - and estimated that there should be a 1.8 percent increase in sales with the bulk of that coming from online sales.”

To assuage the effect of joblessness, Mr. Vaughan said retailers have tried to lengthen the holiday retail period, giving shoppers a longer period to save money and shop.

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