Black Friday, the Friday after Thanksgiving in the United States, is supposed to mark the beginning of the traditional holiday shopping season.

It is also a period when retailers are supposed to be in the black — turning a profit. However, while retailers appear to have had a better-than-feared performance during the extended holiday weekend, it doesn’t look like sentiment has improved much.

This is likely the result of aggressive price discounting – something that isn’t very encouraging given the increased threat of deflation these days.

Credit Suisse analyst Paul Lejuez said anecdotal evidence suggests that retailers offering the best deals were the most crowded and those with no promotions were relatively empty. And while malls may have been crowded, people weren’t necessarily making purchases.

Unfortunately, even a great Black Friday won’t be enough to save the month of November, said J. P. Morgan analyst Charles Grom.

Nonetheless, he thinks investors are looking to get more constructive on retail stocks and adopt a Shakespeare-like “All’s Well That Ends Well” approach.

Favourable weather and lower gas prices could set the stage for a better-than-expected Christmas period, Mr. Grom told clients. However, the uncertainty remains elevated, he added, so a balanced approach with an overweight position in retailers with strong fundamentals today such as Wal-Mart Stores Inc. ,  BJ’s Wholesale Club Inc. , and Dollar Tree Inc., is recommended.

The analyst’s team checked stores from Atlanta to Connecticut and found shopping centres and malls with mid-and lower-priced retailers were busier than higher-end locations.

They even noticed fewer cups of Starbucks in shoppers’ hands, suggesting that people are thinking more about what they need versus what they want.

As a result, retailers serving up a strong value offering are expected to come out on top this season.

Ugly shopping-related incidents on Black Friday aside, Wal-Mart is expected to be the big winner in November. J. P. Morgan said every store it visited saw traffic up compared to last year, while most shoppers had bigger baskets and some store had lines to get in two hours before opening on Friday.

“Electronics was the first product in the cart and it was filled better than at other retailers we visited. TVs were being carried out by customers like loaves of bread.”