Several Retailers were able to lure various deal-hungry shoppers into their shops on Black Friday. It really tested the US economy.

The Chief Executive of Best Buy Co., observed customers snapping up lower priced electronics such as netbook computers, small flat-screen televisions and digital cameras. He also stated that this year is not the one where there will be an increase in purchasing power of the consumers and that there can be some losers as well as winners in retail.

After the miserable sales last year which led to panic-affected discounting, this year the stores have tried their best to cut the costs, brighten inventories, and stock recession friendly commodities. In order to protect their profit margins, retailers are also trying their best to restrict the depth and scope of discounts they offer.

The largest specialty apparel retailer of the US, Gap Inc. is offering a buy-one-get-one free promotion on all the sweaters. This deal is similar to what they had offered last year but is been strategically planned and the goods are sourced at a lower price.

Black Friday was closely monitored by several Wall Street analysts and economists to closely watch the signs of how the US economy was pouncing back from the shocks of recession.

With the unemployment rate touching new highs (currently above 10%) and housing prices becoming steady in several places, this holiday season will be really challenging for retailers.

The sudden plunge in sales compelled fire sale discounts at Macy’s Inc., the Company realized the need of balancing its profits, had to work sharper and had to lower their prices. However, the response they got to their product such as that to half-carat diamond stud earrings was very flattering after its price was slashed down to $199 from its initial amount of $600.

The early indication pointed towards steady store traffic especially at the discount stores, which became the cynosure of the Black Friday shopping veterans. However, customers were very watchful about their dollars and were buying only those things that could give them good bargain.

However, some industry experts state that majorities of merchants are heading into the holiday season with a better financial condition then they were in the last year.

The National Retails Federation has predicted a 1% drop in the US holiday sales from a year ago, thus marking a consecutive down year but with an improved performance than last year’s decline of 3.4%.

According to the figures released by the Commerce Department, Consumer spending which accounts for two-third of the US economy, performed better than it was expected and landed at 0.7% in October. This has given new hopes that holiday purchasing can surpass the prophecies.

Admittedly, some shoppers are very determined to spend at least few bucks at the discount malls. Another glimmer of hope in the retail picture is the online sales. However, here also majority of people are being lured by deep discounts sites such as Amazon.com Inc.

Retails executives are expecting a more favorable outcome than they were expecting couple of months ago. More than half of the retail chain executives expect sales to increase between 5% and 15%, which is almost double the number predicted earlier in September.

According to the Us Inc., the year 2009 is going to be an aggressive year concerning sales. Overall, the Holiday season has started with a bang and has shown some ray of hope to the retailers who had to feel the brunt of the financial turmoil. It also epitomizes the US economy’s rebound from the financial shock experienced last year.

written by REI Circle (www.reicircle.com)