Some 140 million bargain-hunting customers will descend on retailers on Thanksgiving Day, so-called Black Friday, and throughout next weekend -- or at least those who haven’t shopped already or by early next week will head for the shops. Not so long ago most stores remained closed on Thanksgiving Day, on the assumption that families preferred to spend the holiday enjoying uninterrupted togetherness, downing some 46 million turkeys and watching football. No longer. Walmart, Macy’s, and many others are opening their doors on the holiday.
But not all retailers will do the same. Nordstrom’s will remain shuttered, as will Costco, the nation’s second largest retailer after Walmart. Costco is closed because “it is the right thing to do for our employees,” chief financial officer Richard Galanti told the press. Tony Bartel, president of GameStop, a chain of 4,600 stores selling new and used video games and the like, agrees. “For us, it’s a matter of principle….It’s called ‘protecting the family.’” Brave move by a man whose firm’s third-quarter earnings and prospects have disappointed investors and is facing new competition in the used video game market from Walmart, which last month began selling used games in 1,700 of its stores. The 4,600-store Ace Hardware chain took the highest ground of all, announcing it would not open until Friday, “Some things are more important than money.” No list of such things was provided.
No longer is the Friday after Thanksgiving, known as Black Friday because it was the day that the ink on retailers’ accounts turned from red to black, the peak sales day of the year. Many consumers now get their in-store and online shopping done on or even before Thanksgiving, a phenomenon that took retailers and shippers by surprise last year. Delivery-company shipments in the week immediately after Thanksgiving 2013 jumped 23 percent, more and sooner than UPS, FedEx, and other companies expected, leaving the deliverers playing catch-up during the entire holiday season. Millions of packages sat in loading docks, and on trucks and planes rather than under Christmas trees even after December 25. So FedEx, UPS, and others are adding staff and taking other steps to avoid another fiasco. Walmart, Best Buy, Amazon and other retailers are doing their bit by avoiding one-day sales on Thanksgiving and Friday, instead spreading their discount deals throughout the Thanksgiving-to-Cyber Monday weekend.
Retailers are hoping that the National Federation of Retailers is right in predicting that sales this Christmas season will top last years’ by 4.1 percent. That would mean the tills and swipe machines will be handling a bigger increase than last year’s 3.1 percent, and than the ten-year average of 2.9 percent. Brian Cornell, chairman and CEO of Target, the 1,780-store chain that was sent reeling by hackers who stole customer information last year, implied on national television that the NFR forecast might prove optimistic. But most of his peers are looking forward to a very merry holiday season indeed, and investors are responding by bidding up the prices of many retailers’ shares.
Never mind that there will be deep discounting: that is a condition with which retailers have learned to cope. Never mind, too, that Internet sales, which have already tripled their share of total sales, will continue to bite into in-store receipts, with Amazon due to chalk up annual growth of 20% in the near future: the bricks-and-mortar retailers are responding by beefing up their own on-line operations, some including same-day in-store pick-up of online orders. Most retailers have adapted to new shopping patterns, and sell what they can when they can, in-store or on-line, at prices that they wish were higher.
Two forces are driving expectations.