Post-turkey consumers gobble up goods

U.S. brick-and-mortar electronics retailers saw a busy day-after-Thanksgiving, as did online dealers. That could mean a healthy holiday season for PCs, digicams and the like.

John G. Spooner Staff Writer, CNET News.com
John Spooner
covers the PC market, chips and automotive technology.
John G. Spooner
4 min read
Early holiday sales in the United States are painting a bright picture for retailers and electronics makers.

Although some companies are still tabulating results, analysts said U.S. brick-and-mortar electronics retailers were busy the day after Thanksgiving, the traditional beginning of the holiday buying season. And several major e-commerce sites, including Yahoo Shopping and MSN Shopping, also reported strong demand over the weekend. Microsoft said Monday that MSN Shopping saw a 50 percent increase in consumer spending and overall site traffic during November.

"Everybody was really busy," said Steve Baker, an analyst at NPD Group, which tracks retail sales. "My impression on Friday morning was that things were not quite as aggressive as last year in terms of pricing, but people were certainly flocking to the stores."

Overall, U.S. retail sales on Friday and Saturday were up a combined 5.4 percent year-over-year, to $12.4 billion, according to ShopperTrak, a firm that monitors sales at retail stores in the United States. Figures on electronics sales from NPD Group are expected next week.

For manufacturers like Hewlett-Packard and Gateway as well as Dell and eMachines, the early results are encouraging. HP reported double-digit increases in sales of its PhotoSmart digital cameras and home PCs over the weekend. HP's increase in PC sales--which included gains of more than 50 percent in notebook sales at some retailers--caused the company to declare that consumers have begun to upgrade their aging PCs again, after putting those upgrades on hold during the recent economic downturn.

"We're pleased," said Chris Morgan, vice president of marketing at HP's Imaging and Printing Group. "It's three days. It's not the whole holiday season, but in general, we are pleased with what we saw."

Morgan added that "desktops, surprisingly, seemed to have a strong upgrade/refresh element this year. The notebook strength is less of a surprise," given that notebooks have been gaining ground for some time.

A Gateway representative said that although the company is still analyzing its sales data, early results show that digital cameras and digital TVs were among its hottest-selling items.

Post-turkey sales pitch
Retailers such as Circuit City and Best Buy offered a number of special deals, including $29 DVD players, early Friday morning.

A Best Buy representative said the company, which will announce early holiday results along with its latest earnings Thursday, anticipates strong numbers. One indicator was the number of people who turned out Friday morning. Some Best Buy stores in California had as many as 1,500 people waiting in line before they opened at the special time of 6 a.m., the representative said.

Retailers are likely to continue to offer deals throughout the season to keep the sales momentum going.

Although "we didn't really see a lot of big PC deals," NPD's Baker said, "I think that's because?they cost more money (than most cameras or DVD players) and...what people are enticed by right now isn't necessarily the box, but the stuff that goes around the box."

Overall, the National Retail Federation, a trade association for the U.S. retail industry, projects that holiday 2003 sales will increase by 5.7 percent year-over-year, to $217 billion.

E-commerce revenues still pale in comparison to the expected holiday take of brick-and-mortar retailers. But online revenues have been increasing steadily. Jupiter Research estimates that Web retailers will collect $16.8 billion during November and December, an increase of 21 percent from the same period last year.

Yahoo experienced increased traffic across many of its technology-oriented retail sections and through its information technology vendor partners, according to P.K. VanDeloo, brand manager for the Web portal's shopping operations.

Dell also saw an increase in traffic on its Web site during the holiday weekend. A Dell representative said that visits to its U.S. consumer Web site increased by more than 20 percent, year over year, to more than 2 million during the four-day period between Thanksgiving and Sunday, Nov. 29. More than half of the consumers who bought PCs from Dell during the same four-day period made the purchase online, the representative added.

Among the items showing greater activity this year, as compared with holiday season 2002, were mobile devices, including personal digital assistants, cell phones and MP3 players. Video games and video game consoles have also garnered wide appeal among buyers, although the company declined to offer specific sales numbers. VanDeloo said that broad categories such as apparel were also outperforming 2002 sales, along with flower purchases.

MSN said that while it saw traffic and sales gains across all product categories, online shoppers most often sought home electronics and apparel goods.

Later this month, Yahoo plans to target last-minute shoppers with several programs that promise instant availability and rapid delivery of ordered goods. The company will also feature a list of retail partners willing to offer free shipping for the holidays.

CNET News.com's Ina Fried contributed to this report.