For retailers, Thanksgiving sales here to stay

Lauren Abdel-Razzaq
The Detroit News

For the first time, most major retailers are preparing to offer holiday sales on Thanksgiving, extending the deals typically expected on Black Friday in hopes of whipping up excitement for the shopping period.

"We moan and groan and crab about it, but we still ... do it," said Bonnie Knutson, a professor at the School of Hospitality Business at Michigan State University's Eli Broad College of Business. "If that deal is out there and (you're) full of turkey and don't want to watch another football game, that's where you'll be."

Prior to last year, it was rare for a store to be open on Thanksgiving Day, particularly before dinner. Last year, Kmart led the pack, opening stores at 6 a.m. on Thanksgiving. The struggling retailer, owned by Sears Holdings Corp., will offer a repeat this year. Radio Shack, another struggling retailer, joins in from 8 a.m. to noon, closes from noon to 5 p.m., then reopens from 5 p.m. to midnight.

Many of the department stores, like Macy's (6 p.m.), JCPenney (5 p.m.) and Kohl's (6 p.m.), also are extending Black Friday hours into Thanksgiving. Best Buy and others are offering doorbuster deals in waves, so Thanksgiving Day shoppers can get the items, but those who want to wait until the early morning hours on Black Friday can get specials, too.

It's all part of the changing identity of the Thanksgiving holiday and the shift to earlier and earlier sales, said Knutson.

For many, getting up early and braving the cold to catch the Black Friday deals has become just as much of a tradition as gathering with family on Thanksgiving and watching the Detroit Lions. It's even become a bit like a sport, said Knutson.

"To a certain degree, it's a little bit of that competitive nature that all humans get, overlaid with time stress, overlaid with the need for convenience, overlaid with the issue of cost," she said.

It's a shift that is going to stay, whether it's profitable for the stores or not, says Phoenix-based retail analyst Jeff Green.

"What they found last year on Thanksgiving is people came in for those doorbuster sales and went right back out," said Green. "I don't know whether the retailer thinks it's necessarily advantageous or profitable, but they must do it from a competitive standpoint. There are only so many dollars to be made, and they want you in their store first."

As the economy continues to rebound, most holiday sales forecasters anticipate a better year than last year.

Slight increase in sales

Standard & Poor's expects 2014's holiday retail sales will be up between 2.5 percent and 3 percent in November and December. S&P economists say the holiday will be more promotional than ever, with stores offering deals that ultimately could mean lower overall revenues.

"Sales may rise, but margins will depend on retailers' inventory positions, the cadence of their promotional activity, and how they handle consumers' burning desire for discounts," said credit analyst Robert Schulz.

"(We) think the lid of Pandora's gift box of discounting remains open. Still, there is hope for some margin improvement over last season because we think many retailers have planned inventory purchases for tepid holiday sales — a good sign of realistic expectations."

PricewaterhouseCoopers expects sales to decline 7 percent from last year, based on a survey of 2,200 shoppers nationwide. On average, shoppers said they expected to spend $684 this year, down from $735 last year.

"The spending divide among shoppers is widening, creating two distinct groups that we are tracking — survivalists and selectionists — and retailers must cater to both segments," said Steven Barr, PwC's U.S. retail and consumer practice leader.

"And with shoppers coming to expect a seamless omnichannel experience, deals to woo them into stores and having no tolerance for another season of data privacy invasion, it's a complex retail landscape that retailers need to master — or they risk losing loyal shoppers."

The National Retail Federation and the International Council of Shopping Centers are much more optimistic, putting sales estimates up 4.1 percent and 4 percent respectively.

The average consumer is still cautious about the economy, which could increase the hunt for the best bargains, said NRF President and CEO Matthew Shay.

"Recognizing the need to keep household budgets in line, we expect shoppers will be extremely price sensitive, as they have been for quite some time," Shay said in a statement. "Retailers will respond by differentiating themselves and touting price, value and exclusivity."

According to a survey conducted by online deal site RetailMeNot and The Omnibus Co., one in five Black Friday shoppers claims never to have missed a year. More than one-third of these shoppers use Thanksgiving as a time to research the available deals. And 80 percent of those who shop on Thanksgiving would get up early if it meant getting a good deal.

Black Friday leaks planned

In the past, stores often saw their Black Friday ads leaked. Now they do it deliberately, to get people pumped up to shop and to show off some of their top deals.

Doorbusters this year include everything from electronics to toys to clothing. For example, Target is advertising an Element 40-inch HDTV for $119; Best Buy is countering with a Panasonic 50-inch HDTV for $200. Staples is offering an Asus Intel laptop for $100; Wal-Mart will have Fitbit Flex wristbands for $69. At Sam's Club, which is closed on Thanksgiving but open on Black Friday, customers can find 16GB iPhone 6s for $99. Penney's is trying to draw people in with coupons for $10 off any purchase of $10 or more.

With all the emphasis on shopping, some worry how Thanksgiving has shifted from a holiday celebrating what Americans have, to a time to focus on what else we want.

"This is the one holiday that everyone is able to enjoy no matter what your religion or background is. This is being stripped away from us," said Frieda Birnbaum, a research analyst and TV and radio personality from New Jersey. "When we purchase things, nothing can satisfy you in the same way as being emotionally involved with another human being."

Birnbaum says the time spent with family and friends has been tainted by the desire to buy.

"Here we have a calm, hopefully supportive environment with friends and relatives around us, and we can't even enjoy that moment," she said. "We've really gotten ourselves into a place that's not good for us."

Southfield resident Dorothea Price was out shopping Thursday at Penney's, looking for presents for her grandchildren.

"I don't like the crowds," she said of Black Friday. "It doesn't really matter to me if I can get a good deal if it means I have to fight to get it."

Sharri D'Annunzio of Lake Orion has been shopping with friends on Black Friday "for as long as I can remember."

"I would go with girlfriends, get together with them at weird hours, get coffee," said D'Annunzio. "It wasn't about getting the deals; it was more about meeting with them."

But she draws the line at shopping on Thanksgiving.

"I don't like it," she said. "I don't believe in going out shopping on a day that should be spent with family."

Regardless of whether it's socially good or bad, Thanksgiving shopping is probably here to stay. What retailers have done, Green said, is create a Catch-22 for themselves.

"Retailers are training us to think differently about Thanksgiving. There are a lot of families who think (shopping on the holiday) is an awful thing," said Green.

"But the more they do this Thanksgiving shopping thing, the more people will think it's normal, and then the retailers will have to open even if it's not profitable."

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