U.S. Retailers Lure Shoppers With Black Friday Deals
Jackie Brathwaite decided to shop on Black Friday, which she normally doesn’t do, for one simple reason.
“I just wanted a TV,” Brathwaite, a 50-year old Brooklyn housekeeper, said today after buying a 24-inch Westinghouse model from Target Corp.’s (TGT) store at the borough’s Atlantic Terminal mall for $150. She started shopping at 6 a.m. and plans to spend more this year because the sales are “pretty good.”
Brathwaite is one of the millions of Americans expected to flood stores and malls today seeking deals in a holiday shopping season that researcher ShopperTrak predicts will be the weakest since 2009. Faced with smaller crowds of less confident consumers, as well as six fewer days between Thanksgiving and Christmas than last year, retailers are pouring on margin-eating discounts to grab market share.
“The stores with the best doorbusters and all-day sales are the busiest,” Marshal Cohen, chief retail analyst for NPD Group Inc., said today.
Wal-Mart Stores Inc. (WMT), Target, Macy’s Inc., Best Buy Co. and Kohl’s Corp. stores had the best traffic, and J.C. Penney Co. should have a better-than-expected Black Friday as well, he said.
About 97 million people planned to shop online or in stores on Black Friday, with about 140 million intending to do so yesterday through Sunday, the National Retail Federation said. That’s down from 147 million last year.
The Standard & Poor’s 500 Retailing Index rose 0.3 percent today.
Macy’s Chief Executive Officer Terry Lundgren said 15,000 shoppers waited to enter its Herald Square store in New York at 8 p.m. last night, up from 11,000 at midnight a year earlier. Cold-weather apparel and boots were popular, he said.
“The big attraction was for the millennial customer last night, and today we’ve seen there is a steady stream of our core customers,” Lundgren said in a phone interview. “The main reason that most customers are coming into the Macy’s (M) stores is because of the doorbusters and the great value we are offering. Once they get here, they are buying other things on their list.”
Taubman Centers Inc. (TCO) said the parking lots at its Northlake Mall in Charlotte, North Carolina, were 90 percent full by 11 p.m. yesterday, after opening at 8 p.m. The company said there was more traffic than last year, when the shopping center opened at midnight. At first, most of the customers were families and couples, and teenagers began showing up as the night went on.
Sales have been undermined by wobbly consumer sentiment in recent months. Confidence (CONCCONF) among U.S. consumers, whose spending makes up about 70 percent of the nation’s economy, declined in November to a seven-month low, the Conference Board said Nov. 26.
Holiday discounts, which will be steeper than last year, will hurt retailers’ bottom lines, Oliver Chen, a New York-based Citigroup analyst, wrote in a Nov. 26 note. A common theme yesterday was stores offering 50 percent off all merchandise, and mall traffic was “underwhelming,” he wrote in a note today.
Target, based in Minneapolis, said it had twice as many online orders early on Thanksgiving morning as a year ago, and that TVs, tablets, and cameras sold well.
Wal-Mart said it served more customers yesterday than the 22 million who shopped there last Thanksgiving, without providing a specific figure. The Bentonville, Arkansas-based chain processed more than 10 million register transactions from 6 p.m. to 10 p.m. and sold 2.8 million towels, 2 million televisions and 1.4 million tablets.
Stores and malls nationwide beefed up security, with some hiring off-duty cops to complement in-house guards. They also used live entertainment, portable bathrooms and ticketing and wristband systems to keep crowds orderly.
More than a dozen retailers opened earlier or for the first time on Thanksgiving Day. Among the first-timers were Macy’s, Kohl’s and J.C. Penney, which is in the midst of turnaround efforts. About 33 million shoppers intended to shop on turkey day, said the NRF, a Washington-based trade group. Online sales this Thanksgiving rose 20 percent from 2012, according to IBM Corp.
While Black Friday still is important, retailers have pushed sales to earlier in the month by promoting deals sooner, Brent Schoenbaum, an analyst for Deloitte & Touche in Los Angeles, said in a phone interview.
“It’s becoming more difficult to measure what Black Friday means,” he said.
Shoppers that he observed at a mall in Glendale, California, came in two waves: one for the evening openings on Thanksgiving and then another around 8 a.m. today.
The early openings riled opponents who started online “Save Thanksgiving” petitions to restore off days for store employees and keep families together on the holiday. OUR Walmart, an association of Wal-Mart employees, said it would press its battle for better working conditions and higher pay in demonstrations today. The group promised acts of civil disobedience at 1,500 stores.
With 10 percent fewer shoppers expected to visit stores this holiday, sales are projected to advance 2.4 percent, the smallest increase since 2009, the year the recession ended, according to ShopperTrak.
The NRF has a more optimistic forecast and last week reiterated that U.S. retail sales may advance 3.9 percent to $602.1 billion during the holiday season, up from last year’s 3.5 percent gain. Online holiday sales will increase as much as 15 percent to $82 billion this year, the group said.
Sales in November and December account for 20 percent to 40 percent of U.S. retailers’ annual revenue and 20 percent of their profit, according to the NRF.
Sales figures for today will be released tomorrow by ShopperTrak and the next day by the NRF.
The term Black Friday is believed to derive from the myth that retailers didn’t become profitable until this day each year.
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