Thanksgiving Day shopping here to stay with some tweaks
Thanksgiving Day shopping — a delight to some, an anathema to others — isn’t going away, but some stores are rethinking their strategies on whether it makes sense to be open on the holiday itself.
Many of the nation’s major mall operators and the big retailers that anchor them, such as Toys R Us, J.C. Penney and Macy’s, are sticking with what they want to be a new tradition, kicking off the holiday shopping season on Thanksgiving Day.
Others, including the Mall of America, the nation’s largest shopping mall, are closing for Thanksgiving this year after being open for the past several years. Some retailers that are closing cite respect for the holiday, but in truth the cost of being open may be more than the return.
“Once you let the genie out of the bottle, it’s hard,” said Stephen D. Lebovitz, president and CEO of CBL & Associates Properties, a mall operator that is closing 72 of its malls for the day. “More retailers are coming to their senses and realizing it is a family holiday and from a business point of view, it’s not making much business sense.”
Stores open on Thanksgiving started in earnest in 2011 and took a punch out of sales on Black Friday, which had usually launched the shopping season. Many places like Macy’s, Target and J.C. Penney have been opening earlier and earlier on Thanksgiving as they try to outdo others to get first dibs on customers who could easily buy online. But the move has been controversial, as many workers have voiced complaints that stores are putting profits over workers’ time to be with their families.
Some 89 of the 145 properties that Chattanooga, Tennessee-based CBL owns or has interest in opened at 6 p.m. on the holiday last year. While dozens of those will be closed this year, the department stores, movie theaters, restaurants and retailers with exterior entrances have the option to open on Thanksgiving. Other retailers including Office Depot and consumer electronics chain hhgregg Inc. plan to be closed after being open for the past several years.
Plenty of retailers, particularly high-end stores like Nordstrom or those like T.J. Maxx that offer discounts every day, never opened on Thanksgiving and have collected goodwill because of that.
In reality, analysts say, it’s all about stealing share in a market that isn’t growing that much.
For department stores, the competition is fierce. Last year, J.C. Penney opened at 3 p.m. for the first time, three hours earlier than its rivals Kohl’s and Macy’s. That may have hurt Macy’s, which had a weak holiday season and aims to reverse a sales slump. This year, Macy’s decided to open an hour earlier at 5 p.m. on Thanksgiving. Penney is sticking to 3 p.m., while Kohl’s will be opening again at 6 p.m. Most Sears stores will be open on Thanksgiving for the fourth year in a row, starting at 6 p.m. — the same as a year ago.
Best Buy, the nation’s largest consumer electronics chain, suffered over Thanksgiving weekend in 2012 because it didn’t open until midnight, while stores like Wal-Mart and Target began their sales earlier in the evening. Wal-Mart, Target and Best Buy have not announced their plans for this Thanksgiving weekend. But all indications are they’ll start the doorbuster sales on the holiday.
For many big retailers, covering expenses like paying employees holiday pay is not that costly, said Joel Bines, a managing director at retail consulting group AlixPartners. But for small stores or those with specialized merchandise, it may make more sense to close.
AlixPartners also found for that some retailers who did open on Thanksgiving were simply pulling Friday sales a day earlier and their profit margins took a hit. Bob Riesbeck, president and CEO of hhgregg, says business on Thanksgiving actually declined over the previous two years when it opened at 4 p.m.
CBL’s Lebovitz says when he surveyed stores in the company’s malls this year before deciding to close, the reaction was “overwhelmingly positive,” particularly with the specialty stores. The big anchors plan to stay open. Last year, the reaction was different. Most of the specialty stores wanted to be open.
“They didn’t have enough data” to make the decision,” he said.
Andy Mantis, executive vice president of NPD Group Checkout Tracking, says stores should open on both Thanksgiving and Black Friday to maximize their sales. The company, which analyzes receipt data to understand consumer behavior, found that the share of buyers who shopped on both days declined, while the number who shopped only on Thanksgiving Day or on Black Friday increased.
Mantis believes specialty retailers, especially those near big stores like Macy’s that are open, should think again about whether to stay closed.
“It is a heavy promotion time,” Mantis said. “People are buying, and they’re not always willing to go to multiple stores.”