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AMERICAN MORNING

Holiday Shopping Season

Aired November 25, 2005 - 08:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


SOLEDAD O'BRIEN, CNN ANCHOR: Live pictures from New York this morning, Macy's. You know, they say the early bird gets the worm, or the DVD on sale, or whatever it is. Holiday shoppers are raring to go. Early birds also get in fights, though. Overzealous shoppers scuffle at a Florida Wal-Mart. The day is just beginning.
Surveillance tape rolling, vandals let loose inside a California liquor store, breaking absolutely everything in their way.

And you're never going to guess what former FEMA Director Mike Brown is doing now.

Those stories are all ahead on this AMERICAN MORNING.

ANNOUNCER: From the CNN broadcast center in New York, this is AMERICAN MORNING with Soledad O'Brien and Miles O'Brien.

O'BRIEN: Good morning.

Welcome, everybody.

Miles O'Brien continues on his week long vacation. We hope that he and his family are having a nice relaxing...

CAROL COSTELLO, CNN ANCHOR: I'm sure he was waiting in line at 5:00 a.m. to get into Macy's.

O'BRIEN: No, I'm sure he wasn't. Could you imagine? No, I think he was on a beach some -- well, not at 5:00 a.m. He's still asleep, hopefully. But we hope he's had a nice vacation. He's going to be back on Monday.

Carol is helping us out this morning.

Boy, have shoppers gotten out of control. We just showed some of the pictures from Florida, a Wal-Mart, where they had a...

COSTELLO: They were fighting over a laptop.

O'BRIEN: Yes, I guess it was very competitively priced, as Wal- Mart has been promising. But my goodness, that's a little crazy for 6:00 in the morning when that scuffle happened.

COSTELLO: That's a little crazy for any time.

O'BRIEN: You know what? That's a little crazy for any time. You're right. There's no normal time to be slugging someone over a laptop.

COSTELLO: Yes.

O'BRIEN: Obviously the rush to get those Black Friday discounts started pretty early. And we've got some reporters standing by at two busy stores this morning.

David Mattingly is at a Wal-Mart in Roswell, Georgia.

Allan Chernoff is live outside of Macy's in midtown Manhattan -- David, good morning.

Let's begin with you.

How is it looking?

DAVID MATTINGLY, CNN CORRESPONDENT: Well, it's going very good so far, and that's a very good sign for retailers, who have been working very hard this season to get customers into their doors.

(BEGIN VIDEO TAPE)

UNIDENTIFIED MALE: We'd like to ask everyone to please remain calm.

MATTINGLY (voice-over): The all important holiday shopping rush is on and retailers are even more nervous than usual. Customers this year are deeper in debt, according to government figures, and they have less money to spend because of higher home heating bills and prices at the pump. It all adds up to a seasonal retail frenzy where low price is everything.

KATHERINE FINNEY, THEBUDGETFASHIONISTA.COM: Well, retailers are desperate to get people in the stores, I think, because of the rising fuel costs, because of the rising other costs, that people haven't been shopping as much as they usually have shopped. And so Black Friday and, actually, the weeks after, you're going to see major, major sales.

MATTINGLY: The big discount stores in particular stand to benefit from new waves of bargain conscious shoppers and have been promoting sales since early November. Retail giant Wal-Mart, after downplaying the importance of Black Friday last year, promises shoppers this year the lowest prices, offering to match any Black Friday price advertised in print by local competitors.

And Target even offered Black Friday wakeup calls. Messages to pick from range from a biker dude to Kermit the Frog.

"KERMIT THE FROG": The early frog catches the fly.

FINNEY: The shoppers are definitely in charge. This is a shoppers' year. Seize the moment. Seize the shopping day.

MATTINGLY: But after all the hoopla, Black Friday has become just one indicator of success in an ever growing shopping season. Sales now begin after Halloween. And the rising popularity of gift cards extends the buying well into the new year, with 60 percent of gift cards bought before Christmas sparking shopping sprees after January.

(END VIDEO TAPE)

MATTINGLY: A good Black Friday usually means a good holiday shopping and a good holiday shopping, Soledad, is truly the gift that keeps on giving for retailers.

COSTELLO: Yes.

O'BRIEN: Yes, it is.

What's moving this year?

What's the big seller?

MATTINGLY: Well, here at this particular store, it was electronics. They had a flat screen TV, a laptop, very low price, and that's what drew people in this morning. That's where we saw the long lines. Those people have already got their goods and they're off to other stores right now.

So the morning rush rushed through here very early and rushed out to other places.

O'BRIEN: Yes, it looks a little bit calmer than it did earlier today, as strange as that is.

All right, David Mattingly for us.

David, thanks.

COSTELLO: I know, talk about your mad scene. At 5:00 a.m. Eastern at the Macy's store here in New York City, when they opened the door, a thousand people rushed through. It was like a herd of cattle.

Allan Chernoff was already inside the store, able to greet those shoppers as they came running by -- Allan, what did they say?

ALLAN CHERNOFF, CNN CORRESPONDENT: Well, they didn't really say very much because, as you say, it was a stampede. We were just trying other make sure we didn't get run over. Lots of people coming in through the nine different doors here at the main Macy's store in Herald Square.

And as you can see behind me, the store right now is packed after having been open for only two hours. And people being very aggressive.

We met two women who came up from Washington, D.C. They left at midnight, took a bus up here and then took the subway up in the middle of the night, spent two hours outside of Macy's and finally got in.

But why would people come in?

Well, look at some of the deals. Thirty percent off here. We've got pants. We've also got tops. We've also got some great sales here, 40 percent off of shirts.

But, frankly, these are not the really big bargains. Seventy- five percent off of men's shirts on the other side of the floor here, and that's where the real battle is.

So it's the men this morning who are really fighting for those big bargains. The women, they appear to be relatively well behaved. We have one of those guys right here shopping, Don Sagarino.

Don came in from Connecticut.

Don, what time did you leave this morning?

DON SAGARINO, HOLIDAY SHOPPER: We left about 5:00.

CHERNOFF: Got here?

SAGARINO: A quarter to 7:00, about 7:00.

CHERNOFF: And what have you bought already?

SAGARINO: I got four or five shirts in my hand, I've got a turtleneck. Great bargains. I'm loving it.

CHERNOFF: Seventy-five percent off?

SAGARINO: Seventy-five percent off, $29, $19. It's a field day.

CHERNOFF: Well worth waking up in the middle of the night.

SAGARINO: Oh, yes. We're enjoying it. Yes, yes, it's great.

CHERNOFF: OK.

SAGARINO: It's great.

CHERNOFF: Good shopping, Don.

SAGARINO: OK, thank you.

CHERNOFF: Lots of very happy shoppers here early in the morning. It seems nobody minds being sleep deprived -- Carol.

COSTELLO: And it's so refreshing to see men fighting over clothing, isn't it?

A question for you, though. If there's a 75 percent markdown, how do they make any money? And, really, doesn't that beg the question, what kind of economic gauge is Black Friday anyway?

CHERNOFF: Well, 75 percent off of the men's shirts, of course. That's the sort of deal that they use to lure people into the store. Then they try to make more profit off of other items. It's a technique that really does work in retailing.

This is, of course, a very important shopping day and for the entire season, it's about one third, at least one third of sales for the entire year, for the holiday season.

So, certainly very critical for the retailers. They want to offer those good deals, get people into the store and then sell more.

COSTELLO: Did you get my cashmere sweater yet?

CHERNOFF: Carol, you know, the problem -- this is very frustrating because we have to work here. We have no time to shop.

O'BRIEN: Uh-huh.

COSTELLO: Oh come on!

CHERNOFF: With all these deals...

O'BRIEN: Oh, Allan...

COSTELLO: Blah, blah, blah.

O'BRIEN: Allan, I have gotten some of my best shopping done doing live shots at stores. Come on, man, you're doing it wrong if you're not getting some shopping in. It's research.

CHERNOFF: Come on down.

COSTELLO: Research.

O'BRIEN: Research, Allan.

COSTELLO: So go at it, Allan.

we're going to tell you about that, though, because it's so unbelievable.

O'BRIEN: Oh, that's right.

COSTELLO: Shoppers at one Wal-Mart store in Orlando had to deal with more than early bird specials. The doors opened before dawn, as usual. Hundreds of people were attracted by a deal on laptop computers. It started off calmly enough. But then look at this. These two guys were fighting. In the end, people were throwing the laptops up in the air and they came crashing down to the ground. They were pushing and shoving. That's just unbelievable.

In the end, nobody got hurt, but...

O'BRIEN: Well, thank goodness.

COSTELLO: But authorities are urging calm this morning.

Let's check the rest of the day's news.

Tony Harris is at the CNN Center in Atlanta -- good morning.

TONY HARRIS, CNN ANCHOR: Good morning, Carol.

That's just the way guys shop.

Good morning, everyone.

O'BRIEN: Fighting over shirts and laptops.

HARRIS: That's right.

Well, you know saying, if at first you don't succeed, well, former FEMA Director Michael Brown apparently starting a new chapter of his life. Brown, who stepped down soon after hurricane Katrina, says he is now starting a consulting firm of his own. And, get this, he will focus on emergency planning.

Critics attacked Brown's lack of experience and said he appeared out of touch during the Katrina crisis. But Brown says companies are already interested in his new venture.

Police in Oakland, California are looking into two incidents where liquor stores were vandalized. At least one of those incidents caught by surveillance camera. Watch this, as several men dressed in suits enter a liquor store and then proceed to trash the place. It is still a mystery as to what was behind the attacks, but clerks say the suspects told them to "stop poisoning our neighborhood."

Activist Cindy Sheehan rejoining war protesters outside President Bush's Texas ranch. The first family is spending the long holiday weekend there. She had returned Thursday from California, where she was dealing with a family emergency.

In the meantime, members of each of the military got personal holiday greetings from the president. Mr. Bush called 10 service members, thanking them for their sacrifice on America's behalf.

And people working up to a ton of snow in different parts of the country.

Here's a look at Springfield, Massachusetts. Around two-and-a- half to three inches falling in parts of the state. A white Thanksgiving there.

More on the weather now.

Jacqui Jeras is here with me at the CNN Center in Atlanta with the latest forecast -- and good morning to you, Jacqui.

JACQUI JERAS, CNN METEOROLOGIST: Good morning, Tony.

Good morning, everybody.

(WEATHER REPORT)

O'BRIEN: And a reminder, as well, we've got a little programming note to tell you about. Starting on Monday, you can catch AMERICAN MORNING one hour earlier. Our new start time is at 6:00 a.m. Eastern. That's obviously 3:00 a.m. on the West Coast.

We're going to be, of course, following Saddam Hussein's trial. That trial is now resuming. We'll be live in Baghdad with that. It looks as if witnesses will actually start their testimony, as well. It won't just be all logistical...

COSTELLO: Saddam Hussein posturing.

O'BRIEN: And that's always interesting to catch, as well, clearly.

And then our exclusive interview with Lieutenant General Russel Honore. We have that on our Monday edition of AMERICAN MORNING. That begins at 6:00 a.m. Eastern.

COSTELLO: He's so much fun.

O'BRIEN: Yes, he is.

COSTELLO: I wish people, you know, off camera, whenever he's off camera, he's smoking that big cigar.

O'BRIEN: Yes.

COSTELLO: He's cool to look at and people pay attention...

O'BRIEN: I remember your interview with him. It was a lot of fun.

COSTELLO: ... when he comes into the frame.

O'BRIEN: Which is really what we're going to talk to him about, what needs to be done and what has been done in the New Orleans recovery.

Ahead this morning, more on today's kickoff of the holiday shopping season. We're going to find out exactly what kind of discounts you can get if you're a shopper and you're looking for a little bit of a break.

COSTELLO: And speaking of shopping, do you think the spirit of the season is getting lost?

O'BRIEN: Why, the fist fight? Does that, what was concerning you?

COSTELLO: Yes, that wasn't very Christmasy, was it?

We'll tell you why the commercialism may actually be a good thing, though, despite that Orlando incident.

First, though, a holiday message from our troops overseas.

SPEC. ELDIN: I'm Specialist Eldin. I'd like to say hello to my family, my friends, Jessica. I love you all and I'll see you soon.

CPL. JOHNNY PLOVER: I'm Corporal Johnny Plover.

I'd like to say hi to my mom and dad and my wife. I love you, baby, and I'll be home soon. Happy Thanksgiving.

CPL. CHRIS MURRAY: I'd like to say hello to my wife, Emciera (ph). I'd like to say hello to my family back in Indiana.

And my name is Chris Murray and we'll be back soon.

(COMMERCIAL BREAK)

O'BRIEN: We're talking about Black Friday. It's a critical time for retailers.

Let's get right to some of those retailers this morning.

Michael Mills is the director of corporate affairs for Wal-Mart.

He is joining us this morning from Roswell, Georgia.

In Bloomington, Minnesota, we've got Dan Jasper. He's the spokesman for the Mall of America.

And from Macy's in Herald Square, New York, Terry Lundgren is the CEO of Federated Department Stores.

To all of you, good morning, and thanks for talking with us.

And let's begin with Michael, if we can, this morning.

Michael, I've got to ask you about this little fracas that was going on over the laptop sale. I guess it's a -- I mean if there's a silver lining, it's that people are really excited about the good prices that Wal-Mart is offering.

Are you, any concern, though, that there's going to be security problems at any of your Wal-Mart stores?

MICHAEL MILLS, WAL-MART: Well, we take concern very seriously, Soledad. And I really don't have all the details on that incident. But what I can tell you is we try to make sure that our customers have a safe, enjoyable shopping experience and take all the appropriate precautions.

But as you've said, there is a lot of excitement. We're off to a fast start today. There's people leaving with a lot of items in their cart and a lot of smiles on their faces.

So, you know, certainly we don't want these incidents to happen and we think it's fairly isolated.

But I think there are a lot of happy, excited people out there now.

O'BRIEN: Yes, we had a chance to talk to some of those happy, excited people who have at least been able to knock a couple of things off their list.

Let me ask you one more question, Michael, before I let you go.

MILLS: Sure.

O'BRIEN: You -- we've made a lot of this aggressive strategy, retail coming out strong and hard about the competitive pricing difference from last year.

Do you think that's going to make a big difference in the bottom line?

MILLS: Well, I mean I can't compare last year to this year at this point. But what I can tell you is we were aggressive. We wanted to let folks know that, you know, it was going to be a tough holiday for a lot of people with the increased gas prices and other things that were going on. So we wanted to let them know that they were probably going to spend holidays home. And that was our theme, home for the holidays.

We brought in celebrities, had great prices. And we're seeing a great day so far, as I said. A lot of excitement and things are flying off the shelves. And it's a range of items, from electronics to our new Metro 7 clothing line to vests for children for less than $10.

So, really, across our whole line we're seeing a lot of excitement and a lot of purchases.

O'BRIEN: All right, let's head to Minnesota now, where Dan Jasper is.

He's a spokesman for the Mall of America.

Dan, good morning to you.

How does it look so far?

You guys have been open for just about 17 minutes now, right?

DAN JASPER, MALL OF AMERICA: Yes, we have. We've been open, actually, since 6:00 this morning, having a fun contest called Lucky Leftovers, to get the day started. And it's just been a blast. And now the shops are opening and all the shoppers are excited.

O'BRIEN: And has it been really busy, as we saw? I mean the Wal-Mart looked crazed, and certainly Macy's. We had a thousand people line up, and the guys, apparently, going out of control.

What's it like at the Mall of America?

JASPER: Yes, we're actually just getting underway right now and what I sense is a ton of enthusiasm on the part of our shoppers. And we're really expecting a robust day here, so we're pretty happy.

O'BRIEN: Is there one big item that you're hearing that people are looking for? Let's not talk about the Xbox 360. Let's talk about people who are, you know, over the age of 20, let's say?

Was there one item that's sort of surfacing this year?

JASPER: You know, there's a couple of items that are really popular this year. One is the Nano iPod. That seems to be a real hit. And another is customizing cell phones for teenagers, whether it's in leather cases or diamond cases. They really seem to like that.

O'BRIEN: Oh, that's very clever. What a good gift. Interesting. I'm going to put that on my list.

Thank you very much.

JASPER: OK.

O'BRIEN: Let's turn to Terry Lundgren.

He's the CEO of Federated Department Stores here in New York.

Nice to see you, Terry.

A thousand people at the doors. A thousand people at the doors. That's just craziness. And then you see those men like fighting over shirts.

What's that about?

TERRY LUNDGREN, CEO, FEDERATED DEPARTMENT STORES: I was in there fighting with them, Soledad.

O'BRIEN: Oh, good for you.

LUNDGREN: That's a great deal. It's a great deal.

O'BRIEN: It certainly sounded like it.

You're smiling, which means that you're very enthusiastic about how it's going to go this year.

What gives you good hope for this year?

LUNDGREN: Well, listen, I think people are shopping later and later. And so we expected it to be a slow start in November, a build and we saw the doors this morning and, you know, I don't have any finger, or I don't have any counts here, but it looks like this could be a record opening for the Macy's Herald Square this morning.

So we're excited about the enthusiasm today.

O'BRIEN: I don't know, when you have like six men fighting over a button down shirt, yes, I think that's a pretty good gauge. LUNDGREN: Yes.

O'BRIEN: But you're right, it's not official.

LUNDGREN: Right.

O'BRIEN: Online shopping is up 25 percent.

Are you worried with a number like that? Because it could mean, in one read, it's going to hurt the store, the physical store itself. Or, In the other read, it could help Macys.com.

LUNDGREN: Right. We're excited about it, frankly, Soledad. You know, we're up even more than that in our Macys.com business and we have a great advantage because you can actually return something that doesn't fit or you don't like it just right, return it to our stores at Macy's.

And so we've got a great combination that most online retailers don't have. It's a very fast growing business for us, as well. Now it's a several hundred million dollar business.

O'BRIEN: Yes, well, I know that's a similar policy at Wal-Mart, too, and Mall of America has some similar version of that.

I want to thank you guys.

Good luck.

Since you're there, are you going to start your shopping? I mean come on, make the use of your time, right?

LUNDGREN: Yes, I'm here.

UNIDENTIFIED MALE: I've already done that.

O'BRIEN: It's good to see.

Pick up something for me, because I'm a little busy today.

Terry Lundgren and Michael Mills and Dan Jasper for us this morning.

Thanks, guys.

MILLS: Thank you.

LUNDGREN: Thank you.

JASPER: Thank you.

O'BRIEN: Carol?

COSTELLO: And coming up, think all those early morning shoppers are absolutely out of their minds crazy? They may actually be saving the country from economic disaster. We'll explain just ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

COSTELLO: Oh, take a look at the madness inside Macy's in New York. Some big discounts in store. Shirts, men's shirts, 75 percent off, some of them. So people are looking for bargains and they're going to look all day, I suspect.

But for some, today's shopping surge just shows how commercialized the holidays have become.

But as CNN's Jeff Greenfield explains, there's a practical side to the joy of giving and receiving.

(BEGIN VIDEO TAPE)

JEFF GREENFIELD, CNN CORRESPONDENT: Well, we're off and running on the annual ritual of shopping frenzy and massive debt. And before this first full day of mall crush is over, you'll hear a very familiar refrain -- why can't we stop all this commercialization and get back to the true spirit of the season?

That's an admirable sentiment, I'm sure, but have you ever stopped to think about what would happen if we really did put an end to all the buying and selling and giving and spending? Economic disaster, that's what.

(voice-over): This season, Americans will jam 47,835 malls and shopping centers. That's a real official government number, by the way.

What do you figure would happen to those stores and to their owners and workers if we all just stopped showing up?

UNIDENTIFIED MALE: Watch your step.

GREENFIELD: What would happen to the job hopes of the 850,000 seasonal workers, most of them hired to cope with the flood of frantic shoppers? What about the 28,527 jewelry stores? The 10,274 toy and game and hobby stores? Or, for you intellectuals out there, what about the 11,036 bookstores?

We spend half a billion dollars on Christmas trees alone, so what would happen to the folks who own and work those tree farms? Not to mention the folks who profit from the 1.9 billion Christmas cards we send out. The U.S. Postal Service alone would take about a half a billion dollar hit if we stopped sending out those seasonal greetings.

And talk about the holiday spirit or spirits. We spend $1.3 billion on beer, liquor and wine to celebrate the season.

And none of this begins to measure the full economic impact of seasonal excess. What about the caterers and the waiters who work the parties that endanger so many marriages? What about the truck drivers?

UNIDENTIFIED MALE: Let's go.

GREENFIELD: Warehouse workers and others involved in the giant chain of commerce?

Put it all together and you're talking about some $435 billion worth of economic activity geared to the holidays.

UNIDENTIFIED CAROLERS: Everybody knows a turkey and some mistletoe...

GREENFIELD: So just imagine what would happen to the gross domestic product if we stopped heeding all those holiday commercials. Not to mention what would happen to our beloved media if folks stopped spending all that money on holiday advertising.

(on camera): So if you're heading out into the holiday fray today, don't think of it as a rendezvous with jangled nerves, migraine headaches and a pitched battle for that last Xbox. No, no. Think of yourself as a foot soldier in the battle for a healthy American economy.

Don't you feel better?

Jeff Greenfield, CNN, New York.

(END VIDEO TAPE)

COSTELLO: I do feel better.

O'BRIEN: I feel better.

Thanks, Jeff.

COSTELLO: I'm going shopping. I wasn't going to, but now I am.

O'BRIEN: Yes, he started off with the massive debt, but ended with feeling better. I feel good about that. That was very funny.

Well, even if you are doing your duty for the economy by shopping, you really don't want to break the bank.

So coming up, we've got some tips for budget minded shoppers. These are great tips, so grab a pen and write them down.

First, though, a message from one of our troops overseas.

PVT. DUSTIN WHITE: Hi.

My name is Private White.

I'd just like to say Happy Thanksgiving to everybody back home. Be safe and have fun.

Happy Thanksgiving.

(COMMERCIAL BREAK) O'BRIEN: That's what it looks like at Wal-Mart in Roswell, Georgia.

COSTELLO: Wal-Mart stores are cleaning up.

O'BRIEN: Yes, they sure are.

COSTELLO: I mean, all across the country. We did a live shot earlier from Philadelphia at the Wal-Mart store. People were waiting in line for three hours.

O'BRIEN: In many cases, they actually stayed open 24 hours. So there's no waiting in line, because the store is open all the time. And they are doing this new strategy, as we have been talking about, for, really, the last week or so, of they kind of missed the boat last year, so super competitive pricing, making sure everybody knows that there are going to be low, low prices there this year, which we have all been talking about. And, of course, it gets people out there.

We saw a little fracas, though, at one of the Wal-Mart stores.

COSTELLO: In Orlando.

O'BRIEN: Not exactly the holiday spirit.

COSTELLO: No, but they wanted that laptop.

O'BRIEN: And so early. So early to be like throwing punches, I think.

COSTELLO: Well...

O'BRIEN: I mean, 7:00 in the morning? Come on, that's crazy.

COSTELLO: ... obviously, there are other things wrong with these young men.

O'BRIEN: Yes, clearly. let's get right to Tony Harris.

He's got a look at some of the stories making news this morning -- hey, Tony.

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