- The Washington Times - Thursday, November 26, 2009

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.

“I have seen advertisements and promotions since before Halloween. For folks with tighter budgets and less credit to come in on a Black Friday and shop, that [would] be a large bill at one time,” Mr. Vaughan said. “After Thanksgiving, there are a few concentrated weeks of shopping. If retailers can spread the shopping weeks out, it makes it easier for the consumers to have smaller shopping bills and still get their presents.”

The biggest challenge for retailers this year will be trying to reinvigorate consumer confidence, analysts say. “More than 42 percent of consumers will spend less this year over last year,” said James Russo, vice president of global consumer insights for Nielsen Co., a market-research firm.

Because households expect rising unemployment and stagnant incomes, consumer confidence declined in November for the second straight month, according to the Reuters/University of Michigan index of consumer sentiment released Wednesday.

To keep shoppers engaged and to solicit online specials and in-store door-busters, retail outlets are relying on social networks like Facebook, YouTube and Twitter. Staples Facebook fans and Twitter followers will be the first to learn about some Black Friday and Cyber Monday deals, Staples officials said.

Sears is offering its Facebook fans the opportunity to win $500 in an online sweepstakes. “Facebook is a natural way for us to reach our loyal customers and reward them with an exclusive opportunity and fun way to shop,” Don Hamblen, Sears’ chief marketing officer, announced.

Analysts encourage Black Friday shoppers to go online to find the best deals. Stores such Best Buy, Target, Kohls and J.C. Penney are posting their Black Friday deals Thanksgiving morning. While surfing the Internet, consumers should look for free shipping or tax-free deals, Mr. van Beeck said.

“One segment we expect to do well is toys,” said Mr. Vaughan. “We’ve seen a lot of advertisements for Wal-Mart’s 100 toys under $10. Toys R Us has something similar.”

Consumers can also expect to find big deals on gadgets such as eReaders and iPods, Mr. van Beeck said.

In the D.C. metropolitan area, consumers can find an array of deals and shopping incentives. Fair Oaks Mall in Fairfax will offer a complimentary breakfast in its stores. Prime Outlets in Hagerstown, Md., will welcome pajama-wearing holiday shoppers at midnight.

While the National Retail Federation has not issued a Black Friday forecast, it expects a 1 percent decline in holiday sales this year. The International Council on Shopping Centers forecast a 1 percent to 2 percent rise, despite significant discounting by retailers.

In 2008, holiday shopping started just weeks after the global financial crisis erupted.Last year’s holiday sales saw the worst annual drop on record dating to 1967.

This year will be better, analysts say, because stores have had the whole year to prepare.

“Last year’s economic downturn came as more of a shock, so we saw a lot of big discounting,” said Mr. van Beeck. “We are going to see better management this year. Those retailers that don’t perform well this holiday season could actually go out of business. Two years of bad sales could actually be disastrous for them.”

But Ms. Johnson is not worried about retail sales or analysts’ predictions. She’s most concerned about the gifts she plans to put under the tree. For Black Friday, she has a strategy.

Do your research online, bring a friend and know the layout of the store, Ms. Johnson said. “Everyone takes a side, and we go straight for the items that we came to buy.”

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