Holiday Sales Surge on Deep Discounts

But retailers worry huge bargains may cut deeply into their profits
By Jim O'Neill,  Newser User
Posted Dec 1, 2008 7:19 AM CST
Early bird shoppers run into a Target store in Aurora, Ohio looking for bargains at the beginning of "Black Friday" shopping early Friday, Nov. 28, 2008.    (AP Photo/Amy Sancetta)
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(Newser) – Desperate retailers received a jolt of good news this weekend as shoppers poured into stores and spent 7% more—an average $372.57 each—than they did a year ago, reports the New York Times. But Black Friday glee may be replaced with gloom as retailers tote up the slim profits earned on deeply discounted merchandise that shoppers gobbled up.

Plus, analysts say, shopping traffic declined dramatically as the weekend wore on. Retailers—which count on holiday sales for 25% to 40% of their annual sales—offered discounts of up to 70% off regular prices. “You have to sell two to three times as much to break even,” said one analyst.