NEW YORK: Heavy discounting took a toll on U.S. retail sales during the Thanksgiving weekend as shoppers spent less than they did a year earlier, according to data released Sunday by an industry group.
That could be an indication of a more difficult season for many retailers. One bright spot this weekend, according to the data, was e-commerce as online sales soared.
The National Retail Federation estimated the average shopper spent $407.02 over the weekend, or 3.9 percent less than during the same weekend last year, because of lower prices it said would persist through the rest of the season.
"Retailers will continue to aggressively promote their in-store and online offerings, looking to entice today's very budget-conscious and value-focused shopper," said NRF Chief Executive Matthew Shay.
The NRF said 141 million people went shopping at least once during the holiday weekend, up from 139 million last year. Total spending was expected to reach $57.4 billion for the four-day period - which includes Black Friday, the biggest shopping day of the year - down 2.8 percent from $59.1 billion over the same weekend in 2012.
The big deals will also dent profit margins, analysts said.
"Sales will go up, but gross margins are going to be down. Doorbusters were what people were shopping for, more than the regular-priced stuff," said Ron Friedman, retail practice leader at the consulting firm Marcum LLP.
The Thanksgiving weekend, anchored around Black Friday, is an early gauge of consumer mood and intentions in a season that generates about 30 percent of sales and nearly 40 percent of profit for retailers.
But many have given modest forecasts for the quarter. Wal-Mart Stores Inc said it expects no growth in its comparable sales, and Macy's Inc didn't raise its full-year sales forecast despite strong numbers last quarter.
The shorter holiday period this year - there are six fewer days between Thanksgiving and Christmas compared with 2012 - prompted retailers to begin offering sales on Monday, something Shay said likely brought in some sales earlier in the week.
The NRF stuck to its forecast for retail sales to rise 3.9 percent for the whole season.
ComScore Inc, an analytics firm whose data is closely watched by Wall Street, said U.S. online sales rose 17.3 percent on Thanksgiving and Black Friday, outpacing sales growth at brick-and-mortar stores.
Retailers are also being aggressive online as they look to benefit from Cyber Monday, which falls on December 2 this year. Cyber Monday is the biggest sales day of the year for e-commerce.
J.C. Penney Co Inc and Macy's were among retailers that had already begun their "Cyber Monday" sales on Sunday, looking to keep the momentum going. Target Corp was calling the occasion "Cyber Week."
"They're going to continue to trot out deals," Moody's analyst Michael Zuccaro said.- euters