NEW YORK – Target Corp. took some flak for opening stores on Thanksgiving because doing so would give employees less celebrating time with their families. Still, the earlier start attracted more parents and their kids.
“Earlier is more convenient to get out after the Thanksgiving dinners,” said Bryan Everett, senior vice president of Target stores. More families meant more purchases of clothes and home goods too as shoppers spent more time browsing than a year ago, he said.
Target pushed its openings to 9 p.m. from midnight last year as millions visited stores for the unofficial start of the holiday shopping season. With consumers facing a sluggish economy and the threat of tax increases that may result if Washington doesn’t avert the so-called fiscal cliff, this weekend will serve as a barometer of what’s to come for retailers in the next five weeks. One early sign is that online sales rose 17 percent yesterday, according to IBM Benchmark.
To get shoppers to spend more than last year, retailers have continued to turn Black Friday, originally a one-day event after Thanksgiving, into a week’s worth of deals and discounts. A couple of years ago chains started opening at midnight and yesterday Wal-Mart Stores Inc. and Toys “R” Us Inc. pushed it to 8 p.m. on Thanksgiving. Other chains began offering Black Friday deals online as early as last weekend.
“It’s very busy,” Macy’s Inc. CEO Terry Lundgren said in a phone interview. Lundgren greeted shoppers as they entered the chain’s flagship location in Manhattan that had a line of 11,000 people waiting for its midnight opening, an increase from last year.
Shares gain
The Standard & Poor’s 500 Retailing Index gained 0.7 percent at 11:51 a.m. in New York, marking its fifth straight increase. The measure had gained 27 percent this year through Nov. 21.
Shrugging off the threat of protests at its stores by a group backed by the United Food & Commercial Workers International Union, Wal-Mart said it had larger crowds than last year and racked up 10 million transactions yesterday, including 1.3 million televisions and 250,000 bicycles.
The protesting groups, OUR Walmart and Making Change at Walmart, had vowed to mount 1,000 actions online and at stores this week through Black Friday to publicize what they said are the retailer’s manipulation of hours and benefits, efforts to keep people from working full time and discrimination against women and minorities. Wal-Mart said in a statement today that 26 protests took place last night and fewer than 50 employees participated.
How much expanding Black Friday actually boosts sales remains to be seen. Some industry analysts say it shifts sales earlier in the season rather than increasing demand. That was the case last year for several chains, including Target.
Other analysts maintain that it’s an opportunity for one chain to steal sales from a competitor. At a minimum, it can help a retailer boost marketing through press coverage and shoppers telling friends about the deals, said David Schick an analyst for Stifel Financial Corp. in Baltimore.
“Essentially, this is a game of making headlines,” Schick said. Holiday sales are “going to be up or down based on the economy, merchandising and execution. The Black Friday hours aren’t the secret to that.”
At Walt Disney Co.’s stores, visits and average transaction gained at a single-digit percentage rate at the 150 stores that opened at midnight, according to Paul Gainer, executive vice president for Disney stores.
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Shoppers spending more
“Consumers spending a little more than last year in the stores is a really good indicator of signs of things to come through the holiday season,” Gainer said in a telephone interview.
While execution is the responsibility of each retailer, chains will have increasingly confident consumers visiting stores this weekend. More Americans this month said the U.S. economy will improve than any time in the past decade, according to the Bloomberg Consumer Comfort Index. The share of households saying it would get better rose to 37 percent, the highest since March 2002. A year ago, the measure showed a record number of consumers said it was a bad time to spend.
Charlie and Amber Hall are more confident in their finances than last year. The couple blew past their $600 Black Friday budget by filling two carts last night at a Wal-Mart location in Reidsville, North Carolina, with dolls, toys, an easel, pillows and a Sony Corp. stereo for themselves and their three children.
“The economy is picking up,” said Charlie, 36, who installs residential heating and air-conditioning systems. Amber, 29, works part-time in health care. “We’ve got plenty of work and I’m working 40 hours plus every week,” he said.
Spending more
A rebound in housing and the job market along with a drop in household debt, has led additional consumers to say they’ll buy more this holiday, according to a survey this month by the Credit Union National Association and the Consumer Federation of America. Of those polled, 12 percent said they would ramp up spending, the highest level since 15 percent in 2007.
The National Retail Federation says holiday sales, including the Web, will rise 4.1 percent to an estimated $586.1 billion this year, compared with a 5.6 percent gain in 2011. Even though thousands of stores are opening earlier, 147 million consumers, or 5 million fewer than last year, plan to hit the malls this weekend, according to an NRF survey conducted by BIGresearch.
A drop in shoppers didn’t seem to be the case at a Target store in Trotwood, Ohio, where Kelly Long waited two-and-a-half hours for the 9 p.m. opening to get her hands on a $147 32-inch Apex LCD HDTV and a $499 Canon digital SLR camera.
“I like to go to the stores,” said Long, 33, a data analyst at a health-services provider. She planned to spend more this year because the sales are better.
Holiday sales may also get a boost from there being 32 days between Thanksgiving and Christmas this year compared with 30 in 2011, Jennifer Davis, an analyst at Lazard Capital Markets in New York, wrote in a note.
Weather may help gains too as colder temperatures increase sales of sweaters, boots, scarves, gloves and jackets, according to weather-data provider Planalytics Inc. Last year’s Black Friday was the warmest in five years, the Berwyn, Pennsylvania- based firm said in an e-mail.
Another trend this year: putting the same so-called doorbuster deals — the limited-supply discounts used to draw shoppers to stores — on the Web first. Target, which opened on Thanksgiving for the first time, also offered the same deals it normally would reserve for stores on its Website two days ago. Staples Inc. posted what it called pre-Black Friday deals online on Nov. 18.
Strategy backfire
That strategy could backfire because doorbusters are meant to lure people into a store with deals that in many cases are money losers, and get them to make other purchases, according to Paul Swinand, a retail analyst for Morningstar Inc. in Chicago. That dynamic isn’t as prevalent on the Web, he said.
“The only reasons loss leaders work is if there is some kind of momentum in the buying patterns,” Swinand said. “To me, there is less momentum in online loss leaders.”
Still, the Web is becoming increasingly important during the holidays with online sales expected to gain 12 percent to $96 billion, three times as fast as total sales, according to the NRF.
While shoppers flocked to stores after their Thanksgiving meals, not everyone is a fan of the extended hours. Workers and their supporters have signed online petitions saying they are unfair because lose time with their families. That includes one on Change.org from a Target worker calling for the discounter to revert to a 5 a.m. Black Friday opening that has garnered more than 350,000 signatures this year, according to the organization.
Labor strife didn’t deter Hall from checking everything off her list at Wal-Mart.
“I was telling my momma that it’s a shame stores are opening earlier and earlier on Thanksgiving,” she said at the checkout line where 10 carts were backed up behind her. “But the stores got to do what they got to do.”
