US retailers’ controversial choice to kick off the US holiday shopping season early, on Thanksgiving, may not pay off as much as they had hoped.
Eager to entice cautious consumers, especially with six fewer shopping days this year than in 2012, many retailers launched sales on Thursday’s US holiday, traditionally a day for family, friends and football games. Even Macy’s Inc’s flagship store in New York City opened then for the first time in its 155-year history, at 8 pm.
Some US shoppers played along, hitting the Internet and stores on Thanksgiving. But by late Friday morning, foot traffic looked a lot more like on a regular Saturday than the typical Black Friday frenzy that kicks off the holiday season.
While mall traffic appeared slower than last year, overall Black Friday online sales as of noon EST were up more than 7 per cent from a year ago, according to IBM Digital Analytics Benchmark. That came on top of the 19.7 per cent increase on Thanksgiving Day, the firm said.
Walmart Stores Inc US chief executive Bill Simon said Thanksgiving visits to stores of the largest US retailer surpassed last year’s 22 million mark, and a swarm of online shoppers temporarily crashed its online site.
Retailers often record the majority of their annual sales during the end-of-year holiday shopping season, and rely on discounts and marketing blitzes to try and grab a slice of spending estimated at some $600 billion annually. The battle for the consumer dollar has been particularly intense in a year when taxes have increased, unemployment has remained stubbornly high, and confidence has taken a hit from a recent government shutdown and uncertainty over the introduction of US President Barack Obama’s healthcare reforms.
Offsetting those negatives has been the wealth impact of a rise in home prices and a rallying stock market, though those are more likely to help the luxury end of retailing.
The National Retail Federation is predicting that sales for the November and December holiday season will grow 3.9 per cent to $602.1 billion leaving retailers to battle for a bigger slice of that somewhat larger pie.
This year’s holiday shopping results likely will mimic the slow-growing US economy, said Can Erbil, an adjunct associate professor of economics at Boston College. “Last year’s shopping season was actually pretty bad. The fiscal cliff fears really hit the shopping season hard. So the benchmark is low,” Erbil said.