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Nov 24, 2017

Violence in U.S. mars otherwise subdued start to Black Friday; retailers' shares rise

Pattie Lovett-Reid: How to avoid going broke on Black Friday

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CHICAGO/GARDEN CITY, N.Y. — Violence in Missouri and Alabama marred an otherwise subdued start to the U.S. holiday shopping season as bargain hunters flocked to malls for Black Friday deals.

One person sustained life-threatening injuries after a shooting in the parking lot of the Columbia Mall in Columbia, Missouri, KMIZ television reported, adding that officers could not confirm whether the shooting was accidental or deliberate.

Riverchase Galleria mall in Alabama shut its doors 40 minutes early on Thursday when fights broke out in the mall, local news outlet al.com reported.

Early-morning crowds were generally light on Black Friday as more people picked up deals online and the traditional rush was split by stores opening the night before.

The period between the U.S. Thanksgiving holiday and Christmas can make or a break a retailer, accounting for as much as 40 per cent of total revenue for the year. The day after Thanksgiving is traditionally when retailers offer "doorbuster" deals attracting frenzied bargain hunters.

Apart from the Alabama report, there were few signs of frenzy early on Friday.

About 250 people lined up patiently at a Target Corp (TGT.N) store in Manhattan before it opened at 6 a.m. ET.

Tricia Welch, 36, a customer service executive at a bank, stood in line for about an hour before getting into the store.

"There are definitely more discounts available through the year now than say four to five years ago ... we only buy electronics or appliances on Black Friday."

Miguel Flores, 43, an overnight security guard, visited the store after his shift ended.

"I mostly shop online but decided to drop in because I haven’t been to a store in a long time," Flores said. "I bought some video games for my nephew a few days ago. The deals were pretty good then, too. In fact I was just looking at some of them today and the deals are similar."

RETAILERS' SHARES RISE

Shares of Amazon.com Inc (AMZN.O), Macy's Inc (M.N), Kohl's Corp (KSS.N) and other U.S. retailers rose on Friday on early signs that consumers are on track to spend more this holiday shopping season than in previous years.

Although there were few signs of the frenzy that had been a hallmark of the start to the crucial U.S. shopping season in years past, industry watchers were upbeat.

"The turnout this morning has been relatively slow but it is still the best we have seen in three years," said Burt Flickinger, managing director of Strategic Resources Group, citing improving consumer confidence, a strong job market and healthy housing prices. "We expect it to pick up as the day progresses."

Adobe Analytics forecast online Black Friday sales of US$5 billion, which would be a record high. Online retailers will rake in an additional US$6.6 billion on Cyber Monday, according to Adobe.

Amazon, the world's largest online retailer, rallied 2.6 per cent to a record high, bringing its gain in 2017 to nearly 60 per cent. It offered its own Black Friday deals and revealed a preview of its Cyber Monday discounts.

Shares of Macy's, which has suffered from falling sales for several quarters, jumped 2.1 per cent, while Gap Inc (GPS.N) added 1.6 per cent and Kohl's rose 1 percent.

Not all retailers shared in Friday's holiday cheer: Target Corp (TGT.N) fell 2.8 per cent, with analysts noting that it closed its stores for several hours overnight even while many rivals stayed open. Bed Bath & Beyond Inc (BBBY.O) slipped 1.9 per cent.

NOT WHAT IT USED TO BE

Enticing shoppers with Black Friday deals is especially important for brick-and-mortar retailers given the continued switch to online shopping, led by Amazon, which has forced chains such as Toys "R" Us, apparel retailers True Religion, The Limited, Rue 21 and off-price retailer Payless Shoe Source to file for bankruptcy this year.

Amazon began touting its sales for "Cyber Monday" — one of the biggest days for online shopping — on Friday and said shoppers using its digital assistant Alexa could score deals as early as Sunday.

Wal-Mart (WMT.N), Target, Macy's, JC Penney (JCP.N) and other major retailers opened their stores on Thursday evening and most have been offering extended holiday deals online starting as early as October instead of limiting them to one day. Some started offering in-store deals earlier this week to whet shoppers' appetites.

Garden State Plaza in Paramus, New Jersey, was crowded but not chaotic. Shoppers came for deals with nothing specific in mind. Those who came enjoyed the experience of trying on clothes rather than shopping online.

"It looks a little slower this year," Build-A-Bear employee Marissa Trujillo said.

"Black Friday isn't what it used to be because stores are extending their sales into the weekend and you can shop online," said Unmesh Patel, 30, a project manager. "I also come for the rush even though it lessens every year."

A Macy's employee at the mall said it was less busy on Friday because the store had been open, and packed, on Thursday.

U.S. shoppers had spent more than US$1.52 billion online by Thanksgiving evening, a 16.8-per-cent year-over-year increase in online spending, by 5 p.m. ET on Thanksgiving, according to Adobe Analytics, which tracked 80 per cent of online transactions at the top 100 U.S. retailers.

"They’re all online," said Sarah Jones, 42, an employee at Roosevelt Field Mall on Long Island. "Right now they’re at toy stores and electronic stores. They’ll trickle in a little later and we’ll be waiting. I’ve worked in retail my whole life, trust me."

The challenge for retailers will be to convert the early spending into a desire to spend throughout the season and to go beyond deep discounts, NPD Group Chief Industry Analyst Marshal Cohen said in a note.