U.S. Retail Sales Rise 6% on Day After Thanksgiving (Update4)

U.S. Retail Sales Rise 6% on Day After Thanksgiving (Update4)
By Courtney Dentch
Nov. 25 (Bloomberg) -- U.S. retail sales rose 6 percent to $8.96 billion yesterday, the first day of the holiday shopping season, as discounts and lower gasoline costs encouraged consumers to buy more gifts, according to ShopperTrak RCT.
The increase may give retailers reason to be ``cautiously optimistic'' about this year's holiday sales, Chicago-based ShopperTrak said today in a statement. The last quarter of year accounts for almost one-third of U.S. retailers' annual profits.
``This data shows an even larger increase than expected as consumers proved they were more willing to spend,'' Bill Martin, co-founder of ShopperTrak, said in the statement. The firm measures foot traffic in shopping centers and malls using more than 45,000 video devices.
The day after Thanksgiving, called ``Black Friday'' because it was the day retailers traditionally expected to turn profitable for the year, has been the second- or third-busiest shopping day in past years. Stores kicked off the holiday season yesterday with early openings and discounts to win customers.
Wal-Mart Stores Inc., the world's largest retailer, opened at 5 a.m. yesterday with 42-inch plasma televisions for less than $1,000 and cashmere sweaters for $29, sales that lasted the first six hours of the day. It put other electronics on sale three weeks ago, and has reduced prices on toys, small appliances and food.
The Bentonville, Arkansas-based retailer said today its November sales at U.S. stores open more than a year fell 0.1 percent, the worst performance in more than a decade.
Discounts, Stunts
Target Corp., the second-biggest U.S. discounter, hired magician David Blaine to escape from shackles holding him to a spinning gyroscope five stories above New York's Times Square to promote a two-day sale that started yesterday.
Kmart, a unit of Hoffman Estates, Illinois-based Sears Holdings Corp. was open on Thanksgiving Day and offered discounts on games and cameras.
Customers took advantage of lower prices to buy electronics and large items such as furniture yesterday, said Wayne Best, who oversees economic analysis at Visa USA.
``It suggests people are spending more on themselves,'' Best said. About $17 of every $100 spent in the U.S. is paid for with a Visa credit or debit card, he said.
ShopperTrak said earlier this month that it expects Dec. 23, the Saturday before Christmas, to be the biggest shopping day of 2006. The firm estimates consumers will spend $457 billion during the holidays, up 5 percent from last year.
Cheaper Gasoline
A drop in oil prices in recent weeks may have contributed to yesterday's increase. Oil has traded between $54.86 and $61.33 a barrel this month because above-average temperatures in the northern U.S. have delayed demand for heating products. Crude oil hit a record $78.40 a barrel in July.
The price of unleaded gasoline at the pump averaged $2.24 a gallon earlier this week, down 26 percent from $3.04 in August, according to the U.S. Department of Energy.
ShopperTrak's figures exclude discount stores, such as Wal- Mart, and Internet transactions. It also uses U.S. Commerce Department data.