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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

(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.

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.
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)
A woman carries her purchases down the aisle at Macy's on State Street in Chicago, Friday, Nov. 28, 2008, the day after Thanksgiving, the traditional start of the holiday shopping season.
A woman carries her purchases down the aisle at Macy's on State Street in Chicago, Friday, Nov. 28, 2008, the day after Thanksgiving, the traditional start of the holiday shopping season.   (AP Photo/Charles Rex Arbogast)
Shoppers pass Macy's, which opened at 5am Friday, Nov. 28, 2008  in New York.
Shoppers pass Macy's, which opened at 5am Friday, Nov. 28, 2008 in New York.   (AP Photo/Frank Franklin II)
A shopper waits in a checkout line at the Diamond Run Mall in Rutland, Vt., Friday, Nov. 28, 2008.
A shopper waits in a checkout line at the Diamond Run Mall in Rutland, Vt., Friday, Nov. 28, 2008.   (AP Photo/Toby Talbot)
People shop at Toys R Us in Times Square just as the store opened at 5am Friday, Nov. 28, 2008  in New York.
People shop at Toys R Us in Times Square just as the store opened at 5am Friday, Nov. 28, 2008 in New York.   (AP Photo/Frank Franklin II)
Holiday shoppers pack the electronics department of a Target store in Smithfield, RI, Friday, Nov. 28, 2008.
Holiday shoppers pack the electronics department of a Target store in Smithfield, RI, Friday, Nov. 28, 2008.   (AP Photo/Stew Milne)
Early bird 'Black Friday' shoppers cram the aisles at the Target store in Aurora, Ohio on Friday, Nov. 28, 2008.
Early bird 'Black Friday' shoppers cram the aisles at the Target store in Aurora, Ohio on Friday, Nov. 28, 2008.   (AP Photo/Amy Sancetta)
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