Americans made their annual post-Thanksgiving pilgrimage to the malls on Friday, lining up for hours to pick up $19.99 DVD players and other bargains at the traditional start of the holiday shopping season.

Despite signs of an improving U.S. economy and rising consumer sentiment, discounts were the main draw and retailers reported the biggest crowds around cheap electronics, housewares and clothes.

Five-year-old Isabel Bianchi (R) of Duluth, Minnesota watches a mechanical dog perform tricks, at the Mall of America in Bloomington, Minnesota, November 28 2003.  [Reuters]

Rain in the Northeast may have kept some people at home, but shopper-friendly dry conditions prevailed across most of the western and central United States.

"Traffic seems to be strong," said Scott Krugman, a spokesman for the National Retail Federation trade group. "We expect it to be on a par with last year, which was an incredibly strong Black Friday."

Analysts widely expect the overall holiday season to show a big improvement from last year's disappointing levels, but many companies have tried to dampen expectations, noting that consumers are still restraining their spending.

A recent survey from the Consumer Federation of America and the Credit Union National Association found that 34 per cent of those polled planned to spend less this year than in 2002.

The day after Thanksgiving -- known as Black Friday because it once marked the day when retailers got out of the red -- kicks off the holiday shopping season, which generates as much as 40 per cent of annual revenues for key gift destinations such as toy stores and apparel chains.

It used to be the biggest shopping day of the year, but recently that designation has fallen to the last Saturday before Christmas. In 2002, Black Friday was the fourth-biggest shopping day.

Most chains have kept inventories tight this year in hopes of limiting profit-crushing clearance sales, but with customers accustomed to deep discounts, markdowns were widespread.

EARLY BIRDS

Stores opened as early as 6 a.m. in hopes of luring shoppers with early-bird specials. Best Buy Co. Inc. offered a DVD player for $19.99 before noon. Later in the day, it cost $39.99.

Best Buy customers at the Greenwood, Indiana, store near Indianapolis had to snake through aisle after aisle to reach the cash registers. Several people in line said they had been waiting for more than an hour, and one person said the wait was three hours.

At a nearby Kohl's Corp. department store, customers were lined up 30 deep at each register.

At San Francisco's Union Square shopping center, streets were crowded with early-bird shoppers, but some vendors said the late-morning crowds appeared lighter than last year's. Sprinkles of rain threatened to become full-fledged showers.

Poindexter the Clown, aka Dennis Adams, said the foot traffic "seems a little slower to me," as he twisted balloons into the shapes of flowers and animals.

Adams, who has been working in downtown San Francisco for 27 years, said inclement weather and the closure of an FAO Schwarz store appeared to have kept crowds in check.

Last year, lines of shoppers waited to get into the toy store, whose parent company earlier this year closed many locations while in Chapter 11 bankruptcy proceedings.

At the Galleria in Dallas, an upscale mall that Dallas Federal Reserve Bank President Robert McTeer jokingly calls his personal gauge of consumer activity, shoppers started to file in at 6 a.m. By 8 a.m., the parking lot was nearly full.

Shopper Marybeth McIntirefrom the Dallas suburb of Grapevine had her arms full of shopping bags.

"I'm going to be spending more this Christmas. Prices seem a lot better than they did last year," McIntire said.

The big test for retailers will be sustaining any early-season strength. In 2002, Thanksgiving weekend sales were strong, but demand tapered off after that, and the holiday season generated the smallest sales gain in more than 30 years, according to Bank of Tokyo-Mitsubishi, which tracks sales.

This year, many analysts are looking for a 5 per cent to 7 per cent increase in holiday sales, but several companies have tried to cool expectations for a blockbuster year. Target Corp. told analysts earlier this month that it was unlikely to meet fourth-quarter profit forecasts.

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