Holiday Shopping Season off to Modest Start

Deep discounts on everything from sweaters to TVs drove shoppers out of hibernation for the Thanksgiving weekend, but the buying was tempered and sales for the traditional start of the holiday season appear at best in line with stores' low expectations.

The sales receipts, however, came at the expense of profits, and merchants are facing a big challenge exciting financially strapped shoppers for the rest of the season that's expected to be the weakest in decades.

The nation's retailers — who since mid-September have suffered from the most dramatic falloff in spending in decades amid a ballooning financial crisis — opened their stores as early as midnight on Thursday, holding their breath wondering if shoppers would show up for the pre-dawn specials. But while the crowds did come out, analysts say they were thinner than last year, and according to some accounts, business fell off sharply for the remainder of the weekend.

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Shoppers were also focused on bargains and smaller-ticket, practical items like blenders and video games, as they worry about layoffs, tightening credit and shrinking retirement funds.

Even online spending, once a bright spot in retailing, has been hit hard by economic woes in recent months. ComScore, an Internet research company, reported Sunday that online spending was up a modest 2 percent for the combined Thanksgiving Day and Friday, compared with the year-ago period.

"I've cut my budget in half. I usually have a spending limit of $50 per person, but this year, it's $25," said Laura Bentley, of Miami, who was at the local Dolphin Mall on Saturday, her first day of holiday shopping.

Manno and Poun Sam of Houston, who had just purchased some toys, including a Crayola coloring game and a stuffed animal, at a Wal-Mart store in suburban Houston on Saturday, said they were trying to stay within a $500 budget.

"We're not buying anything fancy," said Manno Sam, an assembly-line worker. "We can't afford it."