U.S. shoppers turn out in force but are cautious

NEW YORK -- Shoppers, who had snapped their wallets shut since September, turned out in force Friday to grab early morning deals and hard-to-find items like Elmo Live and the "Wii Fit" exercise game, but many said worries about the economy have them focusing on fewer gifts and less expensive, more practical items.

Meanwhile, the start of the shopping season proved deadly at both a Wal-Mart store in Valley Stream, N.Y., and a Toys "R" Us store in Palm Desert, Calif.

A temporary Wal-Mart worker died after a throng of unruly shoppers broke down the doors and trampled him moments after the store opened early Friday, police said.

Nassau County police said about 2,000 people were gathered outside the Wal-Mart store at the mall about 20 miles east of Manhattan. The impatient crowd knocked the man down as he opened the doors, leaving a metal portion of the frame crumpled like an accordion.

Shoppers stepped over the 34-year-old man on the ground and streamed into the store. When told to leave, they complained that they had been in line since Thursday morning.

"This crowd was out of control," said Nassau police spokesman Lt. Michael Fleming. He described the scene as "utter chaos."

A shooting inside the Toys "R" Us killed two people, authorities said. Toys "R" Us released a statement late Friday, noting "our understanding is that this act seems to have been the result of a personal dispute between the individuals involved. Therefore, it would be inaccurate to associate the events of today with Black Friday." The Wayne, N.J.-based retailer added that it's "working closely with local law enforcement officials to determine the specific details of what occurred."

Elsewhere at malls and stores, it was the usual hectic start of the season, as crowds of shoppers frantically picked through piles of discounted merchandise.

"It was like everything we bought was already on sale and was an additional 50 percent off at the register," said Lynn Mahloy of Snellville, Ga., who arrived at Atlanta's Lenox Square Mall just after 6 a.m. on the traditional start of the holiday shopping season. But she's slashing her holiday budget to about $1,000 this year from about $2,500 in past years because of economic worries.

Preliminary reports from major retailers including Macy's, KB Toys Inc., Best Buy Co. and Toys "R" Us and mall operators such as Taubman Centers Inc. said the crowds were at least as large as last year's. But analysts said sales Friday may not match the year-ago levels as Americans, worried about layoffs, dwindling retirement accounts, and tightening credit, slash their holiday budgets, even for their own children.

"I've always filled the tree. But you have to be honest," said Shannon Keane, 38, of Cary, N.C., a single mother who was recently laid off from her job. "This year, I'll do the best I can." She was out with her 13-year-old son, Miles, at a local Wal-Mart, buying one item: an iPod.

"He really wanted this one thing," Keane said. "So we're here for this one thing."

Depressed sales expected

And while the steep price cuts -- which were even more aggressive than the deep discounting offered throughout the month -- are great for consumers, such moves are expected to depress sales and profits in a season that many believe could show a rare contraction in spending, according to Janet Hoffman, managing partner of the North American retail practice of Accenture.

At a Milwaukee Wal-Mart store, Shirley Jackson, a technician, arrived at about 8 a.m., too late to get a 42-inch Polaroid HDTV selling for $598. Instead she focused on the necessities, buying shoes and pajamas for her family and stocking up on 500-threadcount sheets discounted to $20 from $70.

"It's just as well I didn't get the TV. I have to focus on what I need -- I need sheets, I need groceries," said Jackson, who is in her 40s. "I'm spending a whole lot less this year. I have bills to pay, and I don't want to have it come down to choosing between buying medicine and buying groceries."

Black Friday, the day after Thanksgiving, received its name because it historically was the day when a surge of shoppers helped stores break into profitability -- into the black -- for the full year.

But this year, with rampant discount promotions of up to 70 percent throughout the month amid a deteriorating economy, the power of this landmark day for the retail industry could be fading.

Still, while Black Friday isn't a predictor of holiday sales, it's an important barometer of people's willingness to spend for the rest of the season. This year, industry executives are taking note of how the economy is shaping buying habits.

Paying with cash

One significant change -- and a big worry for merchants -- is that an increasing number of shoppers like Jared Smith are using cash or debit cards, instead of credit cards to pay for their purchases as they are either maxed out or just want to manage their money better.

"I'll spend less this year because I want to reduce my debt," said Smith, who was at the Owings Mills Malls in Owings Mills, Md. "I'm going to try not to use my credit card."

Hoffman noted that based on reports from retailers, children's clothing is faring better than adult clothing as parents focus on their young ones.

Karen MacDonald, spokeswoman at Taubman, which operates 24 malls in the U.S., said sales of small home appliances like pots and pans as well as coffee makers did well Friday, indicating that people are staying closer to home and are wanting to buy more necessities. She added that children's and teen apparel also fared well.

Terry J. Lundgren, chairman and chief executive of Macy's Inc., reported about 5,000 shoppers in line for the 5 a.m. opening at the New York flagship store, at least as many as a year ago. But he also agreed that shoppers are focusing more on basics. He noted that heavily discounted coats and anything cashmere, including basic sweaters and gloves, were selling out, while houseware products like single-serve coffee makers fared well.

Sales of flat-screen TVs, which had seen a slowdown in recent weeks, were a big attraction, but they were heavily discounted, according to reports from Sears Holdings Corp. and Best Buy Co. Tom Aiello, a spokesman at Sears Holdings, which operates Sears Roebuck and Co., and Kmart, said that as of noon Friday, both chains were beginning to sell out of TVs, including a 46-inch Sharp TV, at $899, down from $1,399.

Chuck O'Donnell, a manager at the Best Buy store in West Paterson, N.J., said that video games did especially well as shoppers focus on items that can be enjoyed by the entire family.

As for traditional toys, Toys "R" Us Chief Executive Jerry Storch pointed out that customers were either looking for bargains or the hot, hard-to-find toys like Fisher-Price's Elmo Live and Spin Master Ltd.'s Bakugan. He added that the $139 Spike, a radio-controlled dinosaur from Fisher-Price, was faring well. Another popular item, which has been hard to keep in stock, has been Nintendo's "Wii Fit" game.

"What kids want are the hot toys," he said. "It's not about the cheap toy."

James Fielding, president of Disney Stores Worldwide, however, noted that parents are focusing on deals. "The magic price was anything under $15," he said.