Thanksgiving offers won't avert slowdown

Shoppers wait in line outside of Bloomingdale's in New York before its opens after the Thanksgiving holiday in 2005. Andrew Harrer/Bloomberg News

Internet sales are poised to slow with the rest of holiday spending this year as consumers suffer from higher food and fuel costs and the worst housing slump since 1991.

Spending through websites, which makes up more than 3 percent of all retail sales, will climb 20 percent to $29.5 billion in November and December, according to ComScore Inc, an online research firm. That's less than the 26 percent growth in online sales during last year's holiday season.

The end-of-the-year selling period, which accelerates in the United States after Thanksgiving, is forecast by analysts to increase at the slowest pace in five years.

"There's a natural terminal velocity" for online shopping, said Michael Moriarty, partner at A.T. Kearney Inc, a Chicago-based consulting firm. "People still like going into stores, they still like shopping, they still like bringing the stuff home."

Black Friday - the day after Thanksgiving when retailers' ledgers are said to turn profitable, or in the black - is among the biggest shopping days of the year and has traditionally marked the start of the holiday shopping season. Thanksgiving falls on the fourth Thursday of November in the US.

The busiest day for online shopping won't come until more than two weeks later, on December 10, according to MasterCard Inc's Holiday Shopping Insights Report.

That Monday, almost three-quarters of US retailers have online promotions planned to lure shoppers returning to work. That's twice the online promotions as two years ago, according to the National Retail Federation in Washington.

"They're pushing people to go on line because it's so much cheaper for them to conduct their business," said Neal Rapoport, founder of DealTaker.com, which tracks store promotions.

Internet sales climbed 17 percent in the first 18 days of November from a year ago, Reston, Virginia-based ComScore said. Retailers this year are using their websites more to drive traffic into stores than fuel sales online, said Moriarty at A.T. Kearney.

Bentonville, Arkansas-based Wal-Mart will discount twice as many items on its website as last year and offer online-only specials on Thanksgiving, spokesman Ravi Jariwala said.

Bloomberg News

(China Daily 11/23/2007 page16)