Tags: early | birds | black | friday

Early Birds Grab Bigger Slice of US Retail Pie

Friday, 23 Nov 2012 12:58 PM

 

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An early start to the U.S. holiday shopping season boosted U.S. retailers as customers came with their families and loaded up carts Thursday night, while later shoppers seemed more focused on sale items.

In a departure from the norm, stores like Target Corp opened hours before midnight on Thursday to try to capture a bigger piece of the retail pie. The move seemed to bring out a different type of shopper than the usual one who grabs the "Black Friday" deals, analysts said.

By Friday morning, some shoppers, like Christian Alcantara, 18, at a J.C. Penney Co Inc store in Queens, New York, had already spent all their money. J.C. Penney stuck to a more traditional 6 a.m. EST Friday opening.

"They should open earlier. I've been everywhere else and I've already shopped," he said.

The National Retail Federation expects sales during the holiday season to rise 4.1 percent this year, below last year's 5.6 percent increase. That made a retailer's strategy important as they battled each other, rather than seeing a growing pie.

"Retailers want them to buy now, they want to get that share of wallet early," said Michael Appel, a director at consulting firm AlixPartners. He noticed that the Galleria Mall in White Plains, New York, was busy from midnight to 3 a.m., but that traffic, while still brisk, was less heavy by midmorning.

"Stores that are promoting heavily still have customers in them at this time and those that are not, don't look like they are getting any traffic," he said.

The National Retail Federation said 147 million people would shop Friday through Sunday, when deals are at their most eye-catching — down from 152 million the same weekend last year.

The stakes are high for U.S. retailers, who can earn more than one-third of their annual sales and 40 percent to 50 percent of their profits during the holiday season, which generally starts with "Black Friday," the time when some retailer traditionally turned a profit for the year.

According to a Reuters/Ipsos poll, two-thirds of shoppers were planning to spend the same amount of money as last year or were unsure about plans, while 21 percent intended to spend less, and 11 percent planned to spend more.

"I definitely have more money this year," said Amy Balser, 26, at the head of the line outside the Best Buy store in the Mall of America in Bloomington, Minnesota. "I definitely don't think (the economy) has bounced back anywhere near as much as it needs to, but I see some improvement," she said.

While younger people like Balser generally said they felt comfortable spending money, those who are retired or close to it seemed to be more cautious.

Retired stockbroker Jack Connoly, 65, stood idly while his wife Mary tried on clothes at a Macy's in New York.

"Oh, we're spending less this year, whatever Mary says. Look at the stock market. If they don't do a deal on the debt by the end of December it's bye bye stock portfolio. We're being cautious," he said.

He was referring to the combination of tax hikes and spending cuts that take effect in January. Some economists fear that could lead to another recession unless Washington reaches a deal.

Retail stocks were higher in holiday-shortened trading on Friday, in line with gains across the market. Among the leaders, Wal-Mart was up 1.5 percent and Macy's Inc rose 1.3 percent.

 

STARTING EARLY

Across the country, store lines were long - in the hundreds or more in many places — with the move toward earlier opening hours appearing to help. By sunrise on Friday, it was commonplace, even at large stores in the major cities, to find many more staffers than shoppers.

While the shift was criticized by store employees and traditionalists because it pulled people away from families on the U.S. Thanksgiving holiday, many shoppers welcomed the chance to shop before midnight or in the early morning hours.

"I think it's better earlier. People are crazier later at midnight," said Renee Ruhl, 52, a hotel worker, at a Target store in Orlando, Florida. She headed to her car with an air hockey game in her shopping cart 2-1/2 hours before the chain opened last year.

Others were not as happy with an earlier Black Friday. A petition asking Target to "save Thanksgiving" had 371,606 supporters as of Thursday afternoon..

Some workers used the day to send a message.

OUR Walmart — a coalition of current and former Wal-Mart staff seeking better wages, benefits and working conditions — targeted "Black Friday" for action across the country after staging protests outside stores for months.

Wal-Mart Stores Inc's U.S. discount stores, which have been open on Thanksgiving since 1988, offered some "Black Friday" deals at 8 p.m. on Thursday and special deals on certain electronics, like Apple Inc iPads, at 10 p.m.

The earlier hours lured people who had not braved the crowds before on Black Friday, said Jason Buechel, a senior executive in the retail practice of consultancy Accenture, in observing mall activity.

At the Macy's store in Herald Square in Manhattan, the line at the Estee Lauder counter was four deep shortly after its midnight opening. The cosmetics department's "morning specials" included free high-definition headphones with any fragrance purchase of $75 or more, and a set of six eye shadows for $10.

But for some people, cheap wasn't cheap enough — like the Macy's shopper who bought Calvin Klein shoes at 50 percent off but was still not satisfied.

"I was hoping for deeper discounts," said Melissa Glascow, 35, a Brooklyn, New York, waitress who added she was saving her money for online discounts.

At the Target on Elston Avenue on Chicago's Northwest side - known as one of the highest-volume stores in the chain — the $25 Dirt Devil vacuum that normally goes for $39.99 was sold out, though there were still several large televisions available.

While people shopped, there some signs of a still-shaky economy.

"Before the recession, it used to be a couple of Big Brown Bags, today it's a couple of medium brown bags. I'm really hoping it never gets to a little-bag stage, because I don't know what I'd do then," said Tara, 36, at a Bloomingdale's in Manhattan. She declined to give her last name because she did not want her husband to know she was shopping again.

© 2014 Thomson/Reuters. All rights reserved.

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