TGT Target Corp

By Sarah Nassauer, Suzanne Kapner and Khadeeja Safdar 

Retailers dangled hefty discounts in their stores -- after offering earlier deals on their websites -- as they waged a high-stakes battle with Amazon.com Inc. and other rivals to capture as much spending as they could during the Black Friday shopping spree.

Shoppers arrived in the predawn hours Friday, following millions of Americans who left family Thanksgiving gatherings Thursday to visit malls and shopping centers. They scooped up flat-screen televisions, toys and other gifts that retailers have been promoting for days, but often had their smartphones in hand to check prices.

Target Corp. CEO Brian Cornell said Thursday evening that he was "very encouraged by the initial response," particularly to toys and Apple Inc. products. He noted that hoverboards sold out early online and highlighted the success of a $10 giant teddy bear.

"So far, the most encouraging trend we are seeing is that while door-busters continue to be important," Mr. Cornell said, "once guests are there, they are shopping multiple categories."

BJ's Wholesale Club Inc. CEO Chris Baldwin said early sales Friday were higher than last year, with customers lured in by deeper discounts on electronics such as Samsung Galaxy tablets and 60-inch Samsung TVs.

For brick-and-mortar retailers, the challenge is to draw more shoppers into their stores on a chaotic day often marred by long lines and crowded parking lots. Last year, more people shopped online than in stores during the Thanksgiving weekend, according to the National Retail Federation.

By 4:45 a.m. on Friday, Michael and Jessica Ansbro were close to finished with their holiday shopping for the year. The Berne, N.Y., couple woke at 1 a.m. to hit department stores and GameStop, where they stood in a short line for the store's predawn opening.

The couple have been planning their holiday shopping since September, putting toys for their sons, ages 4 and 7, on layaway at Toys "R" Us. The couple are Amazon Prime members but have preferred to hit the stores for Black Friday deals for the past decade.

"You actually know what you're getting," said Mr. Ansbro, 33, a construction worker. "I like the sales, and I like to ask questions," said Ms. Ansbro, 34.

Online shopping was on pace to reach $2 billion on Thanksgiving Day, up 16% from a year ago, according to Adobe Systems Inc., which tracked visits to e-commerce sites. But the revenue gains were muted by hefty price cuts, especially on electronics, Adobe said. Tablets, for example, were being discounted 25% on average Thursday, compared with 12% a year earlier.

A number of shoppers in the Houston suburb of Spring, Texas, said they went to brick-and-mortar stores because they weren't confident they would be able to actually purchase door-buster items online, even though they were offered.

"I try online every year, but it just hasn't worked, you can't access everything online," said Betty Rasmus, 63, who arrived at Best Buy at 4:45 a.m. and was the first in line, aiming to buy a 55-inch Sharp television for $250, about half price, as well as two laptops.

Sally Skupien, 49 years old, went to the Home Depot in Spring to buy an artificial Christmas tree, but since she wasn't certain she would be the first to reach the one she wanted, she had also added to her online cart as a precaution.

"I'm too old to go in there and fight people for it," she said.

Across the industry, retailers released advertisements of their biggest deals three days sooner this year on average than last, according to Market Track LLC, which analyzed emails, social media and retail websites.

But Black Friday is no longer a one-day event. Promotions are increasingly spread throughout November, as traditional retailers try to match more nimble online rivals such as Amazon. They have been linking their stores and websites more closely and are finding ways to capitalize on the rise in mobile shopping.

Toys "R" Us Inc. made its Black Friday deals available to online shoppers on Wednesday night, before stores opened at 5 p.m. on Thanksgiving.

Kohl's Corp. for the first time made "door-buster" deals normally reserved for in-store shoppers such as a $250 Samsung TV and a $130 Fitbit wristband available online, starting at midnight Thursday, before stores opened at 6 p.m. that day.

Amazon started its deals on Nov. 1. The web giant is offering new discounts every day, sometimes as often as every five minutes, through Dec. 22. In preparation for the holidays, Amazon expanded its product offerings by 30%, the equivalent of 3.6 million new products, according to 360pi, a retail pricing- and assortment-tracking firm.

The risk is that early spending will pull dollars from later in the season. That pattern has occurred over past Thanksgiving weekends, as more stores opened on Thursday and siphoned sales from Friday. As a result, more retailers and malls stayed closed on Thanksgiving this year.

This year, shoppers are expected to spend $27 billion on the Friday after Thanksgiving, according to consulting firm Customer Growth Partners, making it the second-biggest U.S. shopping day of the year -- behind Super Saturday, which falls the weekend before Christmas. A survey conducted by financial-services company Bankrate.com found 23% of Americans planned to shop in stores on Black Friday.

Consumer spending has been healthy this year, boosted by high employment and rising wages. While there remain pockets of weakness, especially among teen-apparel retailers and department stores, many chains -- including Home Depot Inc., TJX Cos. and Best Buy Co. -- reported healthy sales gains in the latest quarter.

The National Retail Federation forecasts total holiday spending will rise 3.6% to $655.8 billion from a year ago, with 137.4 million people shopping in stores and online during Thanksgiving weekend alone.

In what some analysts have dubbed the "Trump Bump," they are hopeful that President-elect Donald Trump will stimulate the economy and lower taxes, which means "a large segment of the population that was previously reluctant to spend," Citi analyst Paul Lejuez wrote in a research note, "now feels better."

By 5:30 a.m. Friday the crowds had thinned at the sprawling Gateway Center in Brooklyn, with employees appearing to outnumber shoppers at several stores.

Dante Pierre-Louis, 18, and his younger brother pried their father out of bed at 4 a.m. to take them shopping. He jumped up and down in excitement upon finding a deeply discounted faux-fur throw blanket at Target, and got some hoodies for 25% off. "When it's crazy, it's exciting to see everyone running around," he said. "But now you have a better chance of actually getting what you need."

"I don't miss the crazy," said Christine Aguirre, a 37-year-old office manager, as she pushed a cart filled with two televisions and other goods. She woke at 4 a.m., a 20-year tradition even though most stores she shops at now open on Thanksgiving and not early Friday. "It's better now, it used to be so packed."

--Sharon Terlep, Bradley Olson and Sara Germano contributed to this article.

Write to Sarah Nassauer at sarah.nassauer@wsj.com, Suzanne Kapner at Suzanne.Kapner@wsj.com and Khadeeja Safdar at khadeeja.safdar@wsj.com

(END) Dow Jones Newswires

November 25, 2016 12:36 ET (17:36 GMT)

Target (NYSE:TGT)
Historical Stock Chart
From Mar 2024 to Apr 2024

Target (NYSE:TGT)
Historical Stock Chart
From Apr 2023 to Apr 2024