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Early birds grab bigger slice of U.S. retail pie
NEW YORK/BLOOMINGTON, Minnesota |
NEW YORK/BLOOMINGTON, Minnesota (Reuters) - An early start to the U.S. holiday shopping season boosted retailers as customers came with their families and loaded up carts on Thursday night, while later shoppers seemed more focused on sale items.
Stores such as Target Corp (TGT.N) 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 (JCP.N) store in Queens, New York, had already made a lot of their purchases. J.C. Penney stuck to a more traditional 6 a.m. EST (1100 GMT) Friday opening.
"They should open earlier. I've been everywhere else and I've already shopped," he said.
Shoppers like Alcantara are likely to force holdouts like J.C. Penney to move their post-Thanksgiving sales into Thursday night next year, said Liz Ebert, retail lead at consulting firm
"There will be pressure on them. There'll be an expansion of it next year," Ebert said.
The National Retail Federation expects sales during November and December to rise 4.1 percent this year, below last year's 5.6 percent increase. That made store operators' strategy important as they battled each other, rather than seeing a growing pie in a season when U.S. retailers can make a third of their annual sales and 40 to 50 percent of their profits.
"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 NRF estimate did not account for Thursday shoppers and anecdotal evidence suggested retailers opening earlier may have cut into traffic on "Black Friday", the traditional start of the holiday season that denotes the point when retailers in the past would turn a profit for the year.
"People seemed to be shopping quite a bit, although in talking to mall management, it seemed that traffic was not as busy as last year," Deloitte retail analyst Ranesh Swamy said.
In an acceleration of a trend that took off last year, shoppers were using their smartphones and other mobile devices for everything from checking for lower prices to mapping out shopping strategies.
Retailers were also using technology better, allowing sales staff to match prices customers found online and having them use tablets as mobile "checkout stands" so buyers did not have to wait in line, a service consumers were quickly coming to expect.
"I even heard customers complaining about a retailer that didn't have mobile checkout," he said.
SAVING UP FOR CHRISTMAS SPREE
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 (BBY.N) 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.
For others, Christmas is the focal point of their annual shopping.
"We cut back spending on birthdays and anniversaries so we'd have more for Christmas. We've adapted," said Cheri Albus, 58, of Papillion, Nebraska, after shopping at J.C. Penney at Westroads Mall in Omaha.
Others were just cutting back.
Retired stockbroker Jack Connoly, 65, stood idly while his wife Mary tried on clothes at a Macy's (M.N) 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 increases and spending cuts that take effect in January. Some economists fear that could lead to another recession unless Washington reaches a deal.
Retail stocks rose in holiday-shortened trading on Friday, in line with gains across the market. Among the leaders, Wal-Mart ended up 1.9 percent and Macy's Inc rose 1.8 percent.
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.
The Thursday night hours made the shopping more of a family event too, retailers said.
"I've never seen parents bring so many kids on Black Friday," Toys R Us chief executive Jerry Storch said.
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.
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 (WMT.N) 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, such as Apple Inc (AAPL.O) iPads, at 10 p.m.
At the Macy's store in Herald Square in Manhattan, the line at the Estee Lauder (EL.N) 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, of Brooklyn, New York.
That could actually be an intentional strategy to help retailers' profits.
"It appears that manufacturers and retailers are making concerted efforts to drive margins, which may take some of the sales sizzle out of a traditionally big selling day/period, but should be positive to gross margins," Credit Suisse analyst Gary Balter said in a note to clients.
Retailers also seemed to benefit from efforts to align better their online business with their stores. As of noon EST, online sales were up 13.1 percent from the same period last year, according to IBM.
Lines at Best Buy stores were similar to last year but the traffic to its website was "significantly" higher, Shawn Score, head of the company's U.S. retail business, told Reuters.
(Additional reporting by Martinne Geller and Jochelle Mendonca in New York, Jessica Wohl and Nivedita Bhattacharjee in Chicago, Brad Dorfman in Milwaukee, Paul Ingram in Tucson, Arizona, Jason McLure in Littleton, New Hampshire, and Barbara Liston in Orlando, Florida; Writing by Brad Dorfman and Ben Berkowitz; Editing by Nick Macfie, David Holmes, Jeffrey Benkoe and Dale Hudson)
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