[December 02, 2013]NEW YORK (AP) — Did stores shoot
themselves in the foot?
Target, Macy's and other retailers offered holiday discounts in
early November and opened stores on Thanksgiving Day. It was an
effort to attract shoppers before Black Friday, the day after
Thanksgiving that traditionally kicks off the holiday shopping
season.
Those tactics drew bigger crowds, but failed to motivate Americans
to spend.
A record 141 million people are expected to shop in stores and
online over the four-day Thanksgiving weekend that ends Sunday, up
from last year's 137 million, according to the results of a survey
of nearly 4,500 shoppers conducted for The National Retail
Federation.
But total spending is expected to fall for the first time ever since
the trade group began tracking it in 2006, according to the survey
that was released on Sunday. Over the four days, spending fell an
estimated 2.9 percent to $57.4 billion.
Shoppers, on average, are expected to spend $407.02 during the four
days, down 3.9 percent from last year. That would be the first
decline since the 2009 holiday shopping season when the economy was
just coming out of the recession.
The survey underscores the challenges stores have faced since the
recession began in late 2007. Retailers had to offer deep discounts
to get people to shop during the downturn, but Americans still
expect those "70 percent off" signs now during the uneven economic
recovery.
Stores may have only exacerbated that expectation this year. By
offering bargains earlier in the season, it seems they've created a
vicious cycle in which they'll need to constantly offer bigger sales
to get people to spend. That's because shoppers who took advantage
of "holiday" deals before Thanksgiving may have deal fatigue and are
cautious about buying anything else unless it's heavily discounted.
"The economy spoke loud and clear over the past few days," said
Brian Sozzi, CEO and chief equities strategist at Belus Capital
Advisors. "We are going to see an increase in markdowns."
Matthew Shay, president and CEO of The National Retail Federation,
said that the survey results only represent one extended weekend in
what is typically the biggest shopping period of the year. The
combined months of November and December can account for up to 40
percent of retailers' revenue.
Overall, Shay said the trade group still expects sales for the
combined two months to increase 3.9 percent to $602.1 billion.
That's higher than the 3.5 percent pace in the previous year.
But to achieve that growth, retailers will likely have to offer big
sales events. In a stronger economy, people who shopped early would
continue to do so throughout the season. But analysts say that's not
likely to be the case in this still tough economic climate.
"It's pretty clear that in the current environment, customers expect
promotions," Shay said. "Absent promotions, they're not really
spending."
Take Tuesday Trasvina, 37, who said she's been bombarded with
holiday discounts since early November. Trasvina, a marketing
coordinator, plans to spend $500 on holiday gifts, about a quarter
of what she spent last year.
"They've been stretching out this Black Friday thing so long," said
Trasvina, who was shopping with her husband on Friday at a Target
store in Portland, Ore. "I just think the over-commercialization of
the holiday has gotten to us."
At least a dozen major retailers — most of them for the first time —
opened on Thanksgiving instead of on Black Friday, which is
typically the biggest shopping day of the year. Wal-Mart, Toys R Us
and other retailers said on Friday that Thanksgiving crowds were
strong.
But the early start appeared to pull sales forward. Black Friday
sales fell 13.2 percent from the previous year to $9.74 billion,
according to Chicago-based technology firm ShopperTrak. But combined
spending over Thanksgiving and Black Friday rose 2.3 percent to
$12.3 billion compared with a year ago.
A Kmart store in New York City that opened at 6 a.m. on Thanksgiving
and stayed open for 41 hours straight was packed on the holiday.
Clothing was marked down 30 percent to 50 percent.
Adriana Tavaraz, 51, headed there at about 4 p.m. and spent $105 on
ornaments, Santa hats and other holiday decor. She saved about 50
percent.
But it's not likely Tavaraz will be back in stores too many more
times this season. Money is tight this year because of rising costs
for food and rent, and Tavaraz already spent much of her $200
holiday budget.
"Nowadays, you have to think about what you spend," she said. "You
have to think about tomorrow."
