Discounts drive customers to the malls, stores for start of holiday shopping season

NEW YORK - The nation's retailers opened the holiday shopping season Friday with rampant discounting and special deals to get consumers to start spending again. Shoppers, who have been in a spending funk over the past few months, were only too pleased, waking up at dawn to flock to stores and malls - and their computers - to take advantage of the bargains.

''The best sales were today so we woke up early to beat the rush,'' said 34-year-old Billy Johnson as he lugged three huge bags in the Beverly Center mall near Beverly Hills, Calif.

Others wanted to get a running start on what are expected to be this year's hot toys: scooters and robotic pets, which do everything from wag their tails to sense touch and sound.

''We opened at 5 a.m. and within 15 minutes we sold out of scooters, Celebration Holiday Barbie and Tekno the Robot Puppy,'' all of which were heavily marked down, said Craig Schultz, manager at K-B Toys at Gurnee Mills mall northwest of Chicago.

''This is like a ritual,'' said Michele Mills, who was one of 100 people in line at Toys R Us in Columbia, S.C., at 5:45 a.m. ''We do this every year because of the prices, and we have fun doing it.''

Sears, Roebuck, & Co., sold all its 900 Poo-Chi robotic dogs, marked down from $29.99 to $14.99, within two hours in its Chicago, Fort Worth, Tex., and Jersey City, N.J., stores, company spokeswoman Jan Drummond said.

''We are typically last-minute shoppers but we're trying to break that habit. The deals were too good to pass up today,'' said Eric Santana, 32, who arrived at Beverly Center with his wife at 8 a.m.

Kurt Barnard, publisher of Barnard's Retail Trend Report, said he was seeing more promotions than usual. ''Many consumers are buying, but they are mostly buying on sale,'' he added.

He and other analysts expect about a 3 percent to 4 percent sales increase at stores this holiday shopping season, compared with 7 percent last year. Even online sales are slowing, with sales projections in December of $11.6 billion - up from last year's $7 billion, according to Jupiter Research. In previous years, holiday sales were known to double or triple.

After ringing up sales of $186 billion on such items as DVD players and pashmina shawls last Christmas, retailers are less bullish this year. Rising fuel prices and the stock market's volatility helped make consumers much more cautious about spending on nonessentials. Earlier this month, the Conference Board, a New York-based research group, reported that the consumer confidence index fell sharply during October.

''We're spending a little less this year,'' said Marilyn Borchers of Boise, Idaho, as she and her husband shopped for toys for their grandchildren. ''We've been affected by the stock market - in a major way. We're buying about the same number of gifts, but spending a little less.''

But Georgia software engineer Srihari Koduri, 29, said though he lost some money in stocks this year, he wasn't going to cut back his spending.

''I found good deals for DVD players, scanners and VCRs, and I bought all three,'' he said.

Arel Axtmann, who was shopping for her 7-year-old son at the Wal-Mart in Bismarck, said she was planning to spend more money on gifts this year than last, but not because she is doing better financially.

''I have another credit card this year,'' she said.

While shoppers jammed the nation's malls Friday, others thronged to online stores, although not without problems.

An ''internal hiccup,'' caused Amazon.com's site to go down for half an hour Friday, said spokeswoman Ling Hong. Visits to Amazon.com were heavier than normal because of holiday shopping, she said, but declined to give details of traffic to the site.

Traditional retailers, like Kmart, Wal-Mart and Target, are expected to dominate e-commerce holiday sales, as many e-commerce startups have gone bust in the continuing Internet shakeout.

It's yet unknown whether these ''Old Economy'' retailers' e-commerce divisions will cannibalize their existing business or be an additional boost.

Kmart's Bluelight.com, which officially launched earlier this month, saw a 40 percent increase in traffic on Friday, chief executive Mark Goldstein said. Sales were driven by the Martha Stewart's kitchenware line and the Poo-Chi robotic dog.

Despite forecasts that the number of online shoppers will nearly double to 35 million this year, analysts estimate that will only total about 1 percent of overall holiday sales.

And as shown Friday by the throngs who went shopping the old-fashioned way, Americans are not ready to abandon the nation's malls.

''I've already tried the Internet to get some toys, and they aren't available,'' said Debbie Fulkerson, of Pascagoula, Miss., who was standing outside a department store at 4 a.m.

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On the Net:

Conference Board: http://www.conferenceboard.org

Bureau of Labor Statistics: http://www.bls.gov