Shoppers swarmed shopping centers and malls today, eager to snatch Black Friday bargains. By 10 a.m. today, shoppers filled all of Rosedale Center's parking spaces. At the Mall of America, the two main parking ramps were 60 percent full by 8 a.m.
Retailers hope customers will keep coming in the next few weeks, to give them their best holiday season since 2007.
Retailers are hoping for a decent, not a great Christmas, with a sales increase in the 2 percent to 3 percent range. That would be most welcome after the flat and falling sales of recent years.
The fate of retailers is in the hands -- or wallets -- of shoppers like Diane Spears of St. Paul, who was at the Midway Walmart in St. Paul.
Spears was loading up on pajamas and other gifts for her 12 grandchildren, and the one who's on the way. Spears says she's feeling better about the economy, and she thinks most folks are, too.
"Everybody's really spending a lot, especially for these Black Friday deals," she said. "We've been to Menard's and here. Menard's -- there was no parking when we got there. And there's a lot of people here at Walmart buying. I see carts full. Some people with two carts."
“The key is price. They're not going to respond to anything unless it is really, really, really cheap.”Howard Davidowitz, retail analyst
But some shoppers are determined to spend less, like April LeFlore of St. Paul. LeFlore says she spent more than $1,000 the past few Christmases. This year, she's aiming to spend no more than $400.
"Hopefully most people will be as smart as me and keep a little money in their pocket, because it doesn't seem like the recession is getting any better," she said.
There was a similar diversity of shopper sentiment at Rosedale Center in Roseville, where some stores opened at 3 a.m.
"Houses are still being foreclosed on," said David Czepa of Wyoming. "People are still losing their jobs. Things are still iffy."
Czepa said he thinks most shoppers will spend a bit more this holiday season, weighing each purchase carefully.
"Everybody will look for the bargains," he said. "You don't see a lot of bags around here really filled up. You see them with something in them, but not a whole lot."
Others are more optimistic about the economy, and figure that'll be reflected in greater retail spending. Lorry Strehlow of St. Paul expects people will spend more, as long as they can afford it.
"I'd say the economy is picking up a little bit," she said. "And I think people are more interested in buying now than they were last year. They're a little less nervous."
Consumer spending accounts for about 70 percent of the U.S. economy. Some economic signs point to increased consumer confidence and spending. For example, personal spending rose 0.3 percent in October.
But retail analyst Howard Davidowitz says other signs aren't very encouraging.
"With 17 percent unemployed and underemployment, with 45 million Americans on food stamps, with housing continuing to be in a crisis, the consumer is watching every dollar," he said. "The key is price. They're not going to respond to anything unless it is really, really, really cheap."
Davidowitz expects holiday retail sales to rise by about 1.5 percent, well under the National Retail Federation's forecast of a 2.3 percent sales increase.
All the price-cutting retailers are doing to lure shoppers into their stores will no doubt hurt profits. Dave Heupel, an analyst with Thrivent Financial for Lutherans, says merchants' profits certainly won't be as good as they were in past free-spending Christmases.
"Those were the years when you had much more impulse buying, where price wasn't the driver to the extent it will be this holiday," he said.
Last year, the Thanksgiving shopping weekend accounted for 12.3 percent of overall holiday revenue, according to ShopperTrak. Black Friday made up about half of that. But the fate of the holiday season has increasingly come down to the last few days before Christmas.