U.S. crowds pick up slightly on Black Friday, online sales jump

November 25, 2016 9:17 AM EST

Store employee helps a customer with his purchase during the Black Friday sales event on Thanksgiving Day at Target in Chicago, Illinois, U.S., November 24, 2016. REUTERS/Kamil Krzaczynski


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By Nandita Bose and Siddharth Cavale

(Reuters) - U.S. online sales surged on Black Friday, with Amazon.com Inc offering the steepest discounts among e-commerce sites as it set the agenda for what has traditionally been the biggest shopping day of the year for brick-and-mortar retailers.

In-store shopping began to pick up in the afternoon, but the increase in customer traffic paled in comparison to the jump in online sales, analysts said.

Macy's Inc website saw such heavy traffic that it had to delay customers from entering the site at three different times.

Online sales on Friday hit $1.70 billion as of 3 p.m. EDT, according to Adobe Digital Index, after reaching $1.13 billion for the day on Thursday, up almost 14 percent from a year ago.

The National Retail Federation has said it expects total sales this holiday season to increase by 3.6 percent to $655.8 billion, mainly due to the rise in online shopping.

This weekend's shopping could reflect signs of faster economic growth in the fourth quarter this year. Nationwide U.S. retail sales rose 0.8 percent in October, driven by a 1.5 percent jump in receipts at online retailers.

The lowest unemployment rate in eight years of 4.9 percent in October and a rise in hourly wage rates of 2.8 percent for the year, the biggest increase since 2009, is fuelling consumer confidence and spending power.

"All of this adds up to the consumer feeling better about their current situation and I'm hoping they ... buy all of their gifts from Macy's," the retailer's chief executive officer, Terry Lundgren, told Reuters.

Administrative assistant Kelsey Gilford, 52, was shopping at Chicago's Water Tower mall on Friday but had already made purchases online on Thursday.

"I looked at some online deals on J.C. Penney which were good. I bought a small kitchen appliance yesterday," she said.

The deepest average discounts for Black Friday came from leading online retailer Amazon.com Inc, with an average of 42 percent off, compared with 33 percent off at Walmart , 35 percent at Target and 36 percent at Best Buy, according to e-commerce analytics firm Clavis Insight.

Amazon said Black Friday would surpass last year in terms of the number of items ordered on its website. The Seattle-based company declined to provide specifics.

Both Target and Wal-Mart, two of the country's biggest brick-and-mortar retailers, said Thanksgiving online sales were some of their best ever.

Customer traffic online could be up 20 percent over Black Friday from a year ago, Cowen & Co analysts forecast in a note, while store traffic is likely to fall 3 to 4 percent this year on Black Friday.

"We expect negative (store) traffic given (the) earlier start this year of the holiday selling season and rise of mobile, which could be as much as 60 percent or more of all traffic, and consumer exhaustion from a saturated promotional environment," the analysts said.

At many malls, more consumers turned up as the day progressed. Reuters reporters saw bigger crowds by midday at the Fashion Outlets of Chicago mall near O'Hare International Airport, which houses shops for high-end brands and retailers, and at Sawgrass Mills Outlet Mall in Sunrise, Florida.

But other malls, like the outdoor City Place mall in downtown West Palm Beach, remained largely subdued. Nicholas Wingo, a 32-year-old security officer at Hugo Boss in the Fashion Outlets of Chicago mall, said the store had a steady stream of customers but no long lines.

TRUMP STORE OFFERS A DEAL

President-elect Donald Trump also stepped into the online sales excitement. On Friday morning, Trump's online store announced it was offering a 30 percent-off deal on all campaign products, including a $149 Christmas ornament.

"President-elect Trump loves a great deal," a promotional email said.

For years, Black Friday has started the holiday shopping season in the United States with retailers offering steep discounts. But its popularity has been on the wane with the rise of online shopping and cheap deals throughout the year.

The holiday shopping season, which runs through Christmas on Dec. 25, can account for as much as 40 percent of retailers' annual sales.

(Additional reporting by Svea Herbst Bayliss in Providence, Renita Young and Nandita Bose in Chicago, Siddharth Cavale in Bangalore, Amy Tennery, Stephanie Brumsey and Aleks Michalska in New York and Ruthy Munoz in Palm Beach, Florida; Editing by Jo Winterbottom and Cynthia Osterman)



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