RETAIL: Bargains loom large in weak economy

Early birds crowd stores, but many are "keeping it simple"

By CHRIS BAGLEY and ZACH FOX - Staff Writers | Friday, November 28, 2008 10:28 PM PST ∞

If Southern California's economy is on the sickbed, as most professional analysts say, it wasn't immediately apparent in the pre-dawn darkness on Friday, the first day of the holiday shopping season.

Shoppers lined up in the foggy parking lots of North County shopping centers for hours ---- 29 hours, in one case ---- hoping to grab the latest video games, digital cameras and 49-inch plasma televisions before they were sold out.

Just before 5 a.m., a line estimated at 3,000 people snaked from Fry's Electronics store out to San Marcos Boulevard and down one block. Employees there and in front of a nearby Best Buy electronics store checked the inflow, like bouncers in front of a busy nightclub, as the stores filled up.

Even so, many of the shoppers said hundred-dollar discounts were all the more important this year, with incomes stretched to make mortgage payments, rent and utility bills. One said he had put off several big purchases for months while he waited for the big sales. And the bigger spenders Friday tended to be those with notoriously secure jobs at public schools, the U.S. military and other government agencies.

Tabitha Cervantes said that sort of job security allowed her to go on a shopping spree at a Best Buy electronics store near her home in Oceanside. She was there in search of bargains ---- on anything.

So she set up camp around midnight Wednesday. Her mother trucked in Thanksgiving dinner from Murrieta.

"I actually didn't know what was on sale," she said.

Marine Lance Cpl. Arthur Hinojosa made sure to get in line at Best Buy in San Marcos by 8 p.m. Thursday for a laptop computer. It would probably be his last chance to get one for less than $400 before his next deployment in January.

Consumers have been especially cautious since September, helping to deepen the job market's deepest freeze in 15 years. San Diego County's unemployment edged upward for two years before jumping last month to 6.8 percent, its highest rate since 1993. The 107,700 people out of work in October was a record high.

The nation's jobless rate has also climbed, but not quite as high and not nearly as quickly. Friday's shopping was being watched all the more intensely as a result.

Black Friday, the day after Thanksgiving, received its name because it historically was the day when a surge of shoppers helped stores break into profitability ---- into the black ---- for the full year.

And while Black Friday isn't a predictor of holiday sales, it's an important barometer of people's willingness to spend for the rest of the season. This year, industry executives are taking note of how the economy is shaping buying habits.

One significant change ---- and a big worry for merchants ---- is that an increasing number of shoppers are using cash or debit cards, instead of credit cards to pay for their purchases, as they are either maxed out or just want to manage their money better. Retail analysts wonder whether the last five weeks of the year will be "black" enough to wipe out red ink from earlier.

At the Wal-Mart store in San Marcos, easy credit was back as a sweetener. A worker paced up and down the line of hundreds of shoppers, pushing no interest for 18 months on purchases of more than $250, if made on a Wal-Mart credit card.

One of the first to leave that Wal-Mart in San Marcos was John Fife, who spent about $800 on electronics and gifts for his kids after waiting in the darkness for four hours.

"It's all worth it on Christmas Day when the kids open all their presents," he said.

It isn't yet clear whether it's worth it for retailers' bottom lines. Stores have been discounting heavily in recent weeks, and the discounts topped 60 percent at several national chains Friday.

Best Buy had marked down the Toshiba "Satellite" laptop computer to $380 from $580. It was selling 50-inch Panasonic plasma televisions for $900, $500 less than comparable plasmas sold elsewhere. Fry's stores had slashed the price of a 22-inch computer monitor to $100 from $220.

Tannya Munoz and her family spent several hundred dollars on a Sony PlayStation video game system, a Satellite and a Bluetooth cellular ear piece before the first light seeped into the fog over the Best Buy store in the Southwest Riverside County community of Menifee. Munoz said they arrived at the store around 10 a.m. Thursday after seeing the length of waiting lines at Best Buy stores near their home in San Bernardino.

Jerry Grijalva, a San Diego County sheriff's deputy who lives in Menifee, waited with a couple dozen other people for a local Target store to open at 6 a.m. Friday. He said he wasn't particularly worried about his job, but was spending a bit less than in years past so he could pay down a stack of utility and other bills.

"Everything costs a little bit more now," Grijalva said. "We're keeping it simple."

The Associated Press contributed to this report. Contact staff writer Chris Bagley at (760) 740-5444 or cbagley@nctimes.com or staff writer Zach Fox at (760) 740-5412 or zfox@nctimes.com. Bagley and Fox blog about local real estate and economics at http://bizblogs.nctimes.com.