A Lot at Stake

Associated Press

NEW YORK

Retailers are on the edge. How well they do during the biggest shopping season of the year will have lasting consequences not just on them, but also the still-fragile economic recovery.

This weekend, many stores for the first time used midnight openings along with the usual bevy of deals as they try to lure consumers, whose appetite for good-buys has been increasing since the Great Recession.

Economists and business executives will be watching closely.

“A bad holiday season would raise recession fears again, whereas a strong one would start to dispel those fears,” said Scott Hoyt, senior director of consumer economics for Moody’s Analytics.

That would give companies more impetus to step up hiring, he added.

As usual, success will depend largely on consumer spending, which accounts for about 70 percent of U.S. economic activity. Their spending can impact stores’ expansion plans and inventory decisions into the new year.

And that trickles through the rest of the economy, from suppliers to jobs. The November-December period accounts for 25 percent to 40 percent of annual sales. For 2011, that’s almost half a trillion dollars in revenue from spending on everything from tablets to toys. About a quarter of jobs in the U.S. are directly or indirectly supported by the retail industry.

As the critical sales time begins, economists and merchants are wondering whether shoppers will stick to their lists or pick up some extras for themselves not only on Black Friday but over the rest of the season.

Or will shoppers do what they’ve been doing for several years now — jump on the deals and retreat until the season’s final days when they think the bargains will be better? And how much discounting will be necessary to draw them in?

Just as in the past few years, merchants have tried discounts on holiday merchandise as early as October.

And those 4 a.m. openings on Black Friday now are outdated. The new trend is midnight openings, with many stores such as Target, Best Buy and Kohl’s embracing them as they try to be the first to pull in shoppers.

Given this year’s challenging environment, online jewelry site Blue Nile made a bigger push in marketing, launching its first online sale on Black Friday to snag more female customers. “It’s going to be competitive. I want to get our brand out there in the mix,” said CEO Vijay Talwar, who estimates that 30 percent to 35 percent of annual sales come from the November and December period.

Earlier openings and a dramatic increase in early-morning specials have helped make the day after Thanksgiving the biggest day of the year for the past six years in a row. It’s predicted to keep that crown again this year, according to ShopperTrak, a research firm.