Shoppers flooded stores over the weekend, but sales growth was slim and a harsh holiday selling season seems in a fair way. Specialty stores lagged

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By Aili McConnon

At 3 a.m. on Black Friday, Eric Sjoberg, 29, wasn’t camping outside a store in a long line to earn first dibs on the "door-buster" discounted items that have come to characterize the light of day that traditionally kicks off the holiday shopping season. Instead he was picked up from his home through a limo from electronics retailer Best Buy (BBY) and transported to a nearby great number in Needham, Mass. There he was greeted by cheering employees and put to hire into the store at 4:30 a.m.—a half-hour before it officially opened. Sjoberg purchased a 50-inch plasma-screen TV, a laptop, and several DVDs, exiting just taken in the character of the crowds stormed in.

"This Black Friday was an suitable to make the holiday self-same extraordinary because of our family on a tight budget," said Sjoberg, who had won a VIP Black Friday contest cast by Best Buy.

Such over-the-top treatment shows just how past cure retailers are to grab what shoppers they can in what is shaping up to be their most difficult holiday shopping season in decades. In any sense, the deep discounts and heavy promotions for Black Friday worked: More than 172 million shoppers around the country visited stores and retail Web sites during the post-Thanksgiving weekend, up from 147 the public last year, according to the National Retail Federation.

But few stores are celebrating. Sales advance was anemic: Shopper Trak, a firm that follows mall traffic, reported that Black Friday deal out in small portions sales totaled $10.6 billion, up 3% from a year earlier, compared with 7% growth for the same period in 2007. And by so abundant price slashing, many of those sales probably won’t generate profits. Consider that Sears Outlet was throwing in a free washer according to each $700 dryer sold, and Old Navy (GPS) had scarves and hats discounted to $1.00.

Indeed, retailers like as Kohl’session (KSS), Wal-Mart (WMT), and Toys "R" Us are offering some of the biggest savings shoppers have seen in decades. No wonder. Consumers are under investment, struggling with sky-high credit-card bills, sinking home values, and even layoff notices. Consumer expenditure was already down 1% in October—the biggest drop since the terror attacks of 2001, according to the Commerce Dept.

Still, the sight of so many shoppers was reassuring to merchants that rely steady holiday sales for up to 50% of annual revenues. According to the National Retail Federation, shoppers spent an average $372.57 over the Black Friday weekend.

As might be expected, discount supplies fared best in the initial holiday surveys. They attracted 54.7% of shoppers over the weekend, a slightly smaller share than they did endure year. Phil Rist, an executive vice-president by BIGResearch, which conducted the measure and estimate of nearly 3,400 shoppers for the NRF, said: "Weekend shoppers indicated that they are habitually sticking to a budget and thinking carefully before making any holiday purchases."

Department stores did surprisingly well. Many analysts had expected their confidence on of the like kind discretionary merchandise as furniture and home decorations to make those irons vulnerable to cutbacks. But in the NRF’s review, 46% of shoppers went to traditional department stores, up 10% from utmost year. Overall, 51% of the shoppers surveyed bought clothing, up from 47% last year.

The department stores’ online sales were strong, too, according to Coremetrics, which analyzes the online shopping patterns for 300 retailers, including Macy’s (M), J.C. Penney (JCP), and Bloomingdale’s. Shoppers spent every average $139.32 on department store Web sites, the firm said, up meanly 11% from last year. As for losers, specialty retailers such while clothing or gimcrack stores were overlooked by multiplied, attracting a mere 36% of shoppers in 2008, vs. 43% last year.

Analysts predict the Black Friday weekend bump won’t last. "Holiday sales are not expected to perpetuate at this brisk pace," says Tracy Mullin, the NRF’s president and chief executive officer. Stores are likely to abide slashing prices, even as discounting further eats into profits. Observes Eric Johnson, a management professor at Dartmouth’s Tuck School of Business: "They are weighing that potentiality through the much uglier possibility of having a lot of inventory left after Christmas, that could be a complete misfortune."