The first spending decline on a Black Friday weekend since 2009 reinforced projections for a lackluster holiday, increasing chances retailers will extend the deep discounts already hurting their profit margins.
Purchases at stores and websites fell 2.9 percent to $57.4 billion during the four days beginning with the Thanksgiving holiday, according to a survey commissioned by the National Retail Federation. While 141 million people shopped, about 2 million more than last year, the average consumer's spending dropped 3.9 percent to $407.02, the survey showed.
The survey results herald retailers' likely return to Black Friday-type discounts this week and suggest added stress for several chains. Wal-Mart Stores Inc. and Target Corp. already cut profit forecasts after tepid sales gains in back-to-school shopping.
"Retailers didn't get what they wanted from Black Friday and they will need to make it up in the next three weeks," Poonam Goyal, an analyst for Bloomberg Industries, said in an interview. "There will be some panic sales."
"The economy spoke loud and clear over the past few days," said Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors. "We are going to see an increase in markdowns."
While U.S. stock markets have reached all-time highs as corporate profits rise, many Americans still face stagnant wages and inconsistent job growth. Confidence among U.S. consumers, whose spending makes up about 70 percent of the nation's economy, declined in November to a seven-month low, according to the Conference Board.
"Consumers are generally not in a great mood, feeling very uneasy about the economy and their jobs, and are looking for value this year," Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Conn., wrote Monday in a note to clients. "They have their list and will check it twice, but they are not going to the mall and grabbing a bunch of random stuff because it is on sale or looks nice."
Stores have started holiday promotions earlier since the last recession ended in mid-2009 -- even pushing into October -- to try to capture consumers' first purchases and encourage them to part with more dollars beyond the day's big deal. Sales in November and December account for 20 percent to 40 percent of U.S. retailers' annual revenue and 20 percent of profit, according to the Washington-based NRF.
The retailers also have tried to take Black Friday -- so-named because of the myth that retailers didn't become profitable until the day after Thanksgiving each year -- and extend its marketing power to the surrounding days. This year, major chains such as J.C. Penney Co. and Macy's opened on Thanksgiving for the first time.
While all this hasn't persuaded shoppers to spend a lot more, it has given them the perception that deals are always available, Ms. Goyal said. That thinking has made the door-buster bargains associated with Black Friday less effective at getting people to buy beyond one heavily discounted item.
This kind of so-called mission shopping, where a consumer buys one bargain-priced item and then leaves, will hurt profit margins, Ms. Goyal said. It may also explain why the number of shoppers increased and their spending fell, she said.
Jackie Brathwaite did just that on Black Friday as she went out looking for a television. She researched on the Web and then decided to go to a Best Buy store in Brooklyn at around 7 a.m. It was sold out there, so she went to a nearby Target location and bought the next option on her list, a 24-inch Westinghouse model for $150, as her only purchase.
Matthew Shay, president and CEO of The National Retail Federation, said the trade group still expects sales for the combined two months to increase 3.9 percent to $602.1 billion. That's higher than the 3.5 percent pace in the previous year.
But to achieve that growth, retailers will likely have to offer big sales events.
"It's pretty clear that in the current environment, customers expect promotions," Mr. Shay said. "Absent promotions, they're not really spending."
In one of the other early reads on results, sales at bricks-and-mortar stores on Thanksgiving and Black Friday posted an estimated 2.3 percent gain to $12.3 billion, according to a report from ShopperTrak, the Chicago-based research company. The results were in line with ShopperTrak's prediction for holiday purchases to gain 2.4 percent, the weakest since 2009.
With more stores opening on Thanksgiving, sales were pulled forward from Friday, Bill Martin, ShopperTrak's founder, said. Sales Friday fell 13.2 percent from last year, with foot traffic down 11.4 percent. Foot traffic for the combined Thanksgiving-Black Friday period rose 2.8 percent to more than 1.07 billion store visits, ShopperTrak said.
"The consumers really responded to Thursday's openings, actually more than anybody anticipated," Mr. Martin said.
The continued rise of e-commerce also may have kept some shoppers at home. Total e-commerce sales reached $20.6 billion in the first 29 days of this holiday season, comScore Inc. said. That's about 3.1 percent more than the period from Nov. 1 to Black Friday last year, the research firm's data showed. The 2013 numbers include a few more shopping days because Thanksgiving fell on a later date this year.
Millions more were expected to shop online on Cyber Monday. The National Retail Federation predicted more than 131 million people shopped online Monday, up about 2 percent from last year.
And research firm comScore expects Cyber Monday expects sales of $2 billion, up from about $1.47 billion last year.
The Associated Press contributed to this report.