Stores Open Early on Thanksgiving But Shoppers in No Rush

Thursday, 28 Nov 2013 05:02 PM

 

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Some early U.S. shoppers headed to stores on Thanksgiving Day in search of discounted holiday gifts on a day long reserved for American families to bond over turkey and football.

Kmart, Old Navy and Lord & Taylor were some of the stores that opened their doors on Thursday morning, as each company did last year. Macy's Inc and a slew of other stores are opening later on Thanksgiving for the first time ever in a bare-knuckle brawl for a bigger slice of holiday sales.

With six fewer shopping days this year than in 2012, retailers who reap nearly half of annual profits during the winter holiday season are nibbling away at the Thanksgiving holiday. But early visits to the stores by Reuters showed sparse crowds - a sign that not all U.S. shoppers are keen to open their wallets so quickly.

A Walmart store in Woodbridge, New Jersey, was virtually empty at 2:30 p.m., with store associates outnumbering shoppers.

The National Retail Federation expects up to 140 million shoppers to hit U.S. stores over the Thanksgiving weekend, slightly more than the 139 million who turned out last year.

But many forecasters expect overall sales growth to be tepid in a season plagued by shaky consumer confidence and given that there are few fashion must-haves.

Many consumers were also shopping online on Thursday. A report by IBM Digital Analytics Benchmark at 3 p.m. Eastern Time showed overall Thanksgiving online sales up 9.4 percent in 2013 over the same period last year.

"Thanksgiving is the fastest growing day for e-commerce during the holiday season," said Andrew Lipsman, comScore's vice president of marketing and insights. "There is a broader cultural norm where people feel it's OK to shop on Thanksgiving."

Nilka Gomez, 38, a stay-at-home mom who lives in the Washington Heights neighborhood of New York, decided to cut back on spending this season to about $500 from $2,000 last year after losing her job.

"There will be no electronics this year," said Gomez, adding that she also plans to visit a Wal-Mart store on Thanksgiving.

Some say retailers' fortunes depend a lot more on wealthier shoppers who have benefited from rising share and home prices this year.

"There are two sides to the story. If you look at households with over $100,000 of income, those folks are going to spend twice as much as people of incomes under $100,000," said FTI Consulting's Steve Coulombe.

Harshad Shah, a 70-year-old real estate investor based in New York, is one of them.

"We are more upbeat this year," said Shah, while shopping at Lord & Taylor in Manhattan with his granddaughter Eva Luskey on Thursday. "There is a general sense that the economy is better. You see the stock market is doing better. Hopefully your stock portfolio is making a few more bucks."

EARLIER OPENINGS, HOLIDAY PAY

With "Black Friday" deals being offered before Thanksgiving tables were even set on Thursday, some were criticizing the retail industry's approach. Critics circulated online petitions, and a handful of franchise owners said they had defied corporate orders by keeping their stores closed.

Target Corp, Best Buy Co Inc and Toys R Us are opening earlier on Thursday than they did last year. Many Wal-Mart Stores Inc U.S. locations will be open all day, with Thanksgiving specials offered beginning at 6 p.m.

Department store chains Kohl's Corp, J.C. Penney Co Inc, Macy's all announced earlier this year they would open on Thanksgiving Day for the first time ever.

"The ones that are opening earlier are going to get more sales, but in the end, I don't think the overall pie gets any bigger. It's just a share gain," said Brian Yarbrough, a retail analyst with Edward Jones.

He also estimates that overall sales for November and December will be up 2.8 percent. That is more conservative than the 3.9 percent jump forecast by the National Retail Federation. The profit on those extra sales will depend on whether the eye-catching doorbuster sale prices are margin-squeezing loss leaders, analysts said.

At Macy's flagship store in New York City, five hundred employees will be working on Thanksgiving Day. The store, one of the Big Apple's most visited tourist sites, will be open for 26 straight hours, starting on Thursday at 8 p.m. EST.

A worker at Kmart in Manhattan said she had volunteered to work in order to earn extra money. Kmart workers are getting time and a half for the hours they week on Thanksgiving, Sears spokesman Howard Riefs said.

Black Friday is still is predicted by ShopperTrak to be this year's biggest day of the season for sales and traffic.

© 2014 Thomson/Reuters. All rights reserved.

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