NEW YORK -- Deep discounts on everything from sweaters to TVs drove shoppers out of hibernation for the Thanksgiving weekend, but the buying was tempered and sales for the traditional start of the holiday season appear at best in line with stores' low expectations.
The sales receipts, however, came at the expense of profits, and merchants are facing a big challenge exciting financially strapped shoppers for the rest of the season that's expected to be the weakest in decades.
The nation's retailers -- who since mid-September have suffered from the most dramatic falloff in spending in decades amid a ballooning financial crisis -- opened their stores as early as midnight Thursday, holding their breath wondering if shoppers would show up for the pre-dawn specials. But while the crowds did come out, analysts say they were thinner than last year, and according to some accounts, business fell off sharply for the remainder of the weekend.
Shoppers were also focused on bargains and smaller-ticket, practical items such as blenders and video games, as they worry about layoffs, tightening credit and shrinking retirement funds.
Even online spending, once a bright spot in retailing, has been hit hard by economic woes in recent months. ComScore, an Internet research company, reported Sunday that online spending was up a modest 2 percent for the combined Thanksgiving Day and Friday, compared with the year-ago period.
"I've cut my budget in half. I usually have a spending limit of $50 per person, but this year, it's $25," said Laura Bentley, of Miami, who was at the local Dolphin Mall on Saturday, her first day of holiday shopping.
Manno and Poun Sam of Houston, who had just purchased some toys, including a Crayola coloring game and a stuffed animal, at a Wal-Mart store in suburban Houston on Saturday, said they were trying to stay within a $500 budget.
"We're not buying anything fancy," said Manno Sam, an assembly-line worker. "We can't afford it."
New York-based retail consultant Walter Loeb said he expects sales for the weekend to be below year-ago levels, based on discussions this weekend with key executives from discounters and department stores.
Marshal Cohen, chief industry analyst at NPD Group, a market research group, who had a network of analysts at 53 mall locations across the country this weekend, said that "the holiday started off with some promise but quickly moved to concern."
"It could have been a disaster, but it wasn't," he said, noting that he estimates that the weekend's sales were at best even with the same holiday weekend a year ago.
Karen MacDonald, a spokeswoman at Taubman Centers Inc., which operates 24 malls in 11 states, said that based on a sampling of malls, business on Friday was anywhere from unchanged to up mid-single digits. But on Saturday, sales were unchanged to down slightly.
But Toys R Us Chief Executive Jerry Storch reported on Sunday that customer traffic was at least as strong this past weekend as the Thanksgiving weekend a year ago, and said he was "definitely pleased with sales."
A more complete sales picture of how the Thanksgiving shopping weekend fared won't be known until Thursday when the nation's retailers report November same-store sales, or sales at stores opened at least a year.
According to preliminary figures released Saturday by ShopperTrak RCT, a research firm that tracks total retail sales at more than 50,000 outlets, sales rose 3 percent to $10.6 billion on Friday from Black Friday a year ago.
The day after Thanksgiving, dubbed Black Friday because it historically was the day when a surge of shoppers helped stores break into profitability for the full year, has been fading in importance.
In recent years, merchants have been pushing earlier the sales and expanded hours that were typically reserved for that day. This year, in a desperate bid to pull in shoppers, stores were even more aggressive, offering discounts of up to 70 percent in the days leading to the weekend, and widening those price cuts for a broader array of merchandise for the early morning deals.
Although Black Friday isn't a predictor of the holiday season, it does act as a barometer of consumers' willingness to spend. Complicating matters is a shorter buying season, 27 days between Black Friday and Christmas, instead of 32 last year, putting more pressure on retailers.
Clearly economic woes played a role in how shoppers bought this weekend. K-B's Webb noted that consumers were focusing on bargains like a $30 My Happy Family dollhouse, which offered furniture and figures, as part of the retailer's supervalue program.
Taubman's MacDonald said that practical items did well, like cookware and small home appliances, but clothing and electronics also were popular because they were deeply discounted.