Thanksgiving Kicks Off Anxious Holiday Season For Retailers
(Phil Wahba) - The holiday shopping season starts in earnest on Thursday, with retailers anxious to see if U.S. consumers are willing to spend despite an endless stream of scary headlines about the fragile economy and their own precarious finances.
However, in the eyes of retailers, the shopping period has been churning along for some time as retailers like Wal-Mart Stores Inc and Toys R Us started early by offering layaway programs, and others offering major deals to lure shoppers.
These incentives have increased the stakes for retailers, and when Americans are done with their turkey dinners on Thursday, many will be getting a jump-start on 'Black Friday', the biggest shopping day of the year, and one that sets the tone for the entire season.
"If Thursday and Friday are not very good, chances are it will not pick up going up to Christmas," said Keith Jelinek, a director at consulting firm AlixPartners's retail practice.
WalMart, Gap Inc's Old Navy and Sears Holdings' K-Mart are again open on Thanksgiving Day to get a headstart, while Toys R Us opens Thursday evening.
But to narrow the gap in store hours, discounter Target Corp, electronics chain Best Buy and department store chains Macy's Inc and Kohl's Corp will open doors at midnight on Thursday.
Retailers themselves concede the pressure is on.
"At the end of the day, we are trying to respond to what our customers want to do, and they are telling us that's when they want to shop," Mike Vitelli, president, Americas and enterprise executive vice president, Best Buy, told Reuters.
Others, like J.C. Penney Co Inc are taking their chances and opting to open early Friday morning as they did last year.
The National Retail Federation expects sales in November and December to be up 2.8 percent over last year. So retailers see little margin for error in their fight for sales.
The battle will also be waged online, where comScore expects sales to be up 15 percent this year.
Wal-Mart starts its Black Friday 'doorbuster' deals on Thursday at 10 p.m. at its stores. Amazon.com Inc, not to be outdone, will offer its deals online at 9 p.m. But Wal-Mart is also offering 30 percent more deals on Thanksgiving.
The knock-down-drag-out fight comes as the rebound in sales cooled in October, when many top chains like Macy's and Saks reported disappointing sales and shoppers were hit with a steady stream of bad news about the economy.
It will be a tougher fight for chains that have struggled of late, like Gap, Penney and electronics giant Best Buy.
PriceGrabber.com, a price comparison website, found that searches for electronics in recent days were flat with last year, helped only by a surge in interest in new tablets like Amazon's Kindle Fire and Barnes & Noble Inc'sNook.
The NRF expects 152 million people to hit stores this weekend, up 10.1 percent from last year.
But that will be fueled by bargain hunting, with the real test coming after the weekend, as retailers see if shoppers are only willing to hit stores when there are juicer deals on the table. Last year, after a strong Black Friday weekend, shoppers sat on their hands until closer to Christmas - waiting for stores to hand out bigger bargains.
"I think as time goes on, you're going to see a leveling and a softness in the numbers," said Al Ferrara, director of BDO USA's national retail practice.
(Reporting by Phil Wahba in New York, additional reporting by Dhanya Skariachan; Editing by Bernard Orr)
Copyright 2011 Thomson Reuters. Click for Restrictions.
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First Posted: 11/24/11 07:58 AM ET Updated: 11/24/11 07:58 AM ET