Retailers aren’t waiting for Friday to offer Black Friday price cuts.
Macy’s Inc., the second-biggest U.S. department-store company, planned its deepest discounts last week, before the traditional start of the holiday shopping season on the Friday after Thanksgiving.
Kohl’s Corp. held a three-day Christmas sale that ends today, with cuts of about 40 percent, in another preemptive strike before Wal-Mart Stores Inc., the world’s biggest retailer, opens at 5 a.m. on Nov. 28 with $5 Hannah Montana dolls and $8 Wrangler jeans.
The increasingly aggressive measures signal retailers’ pessimism about the economic outlook and a holiday season that analysts say may be the weakest in six years. Individuals may spend an average of $616 on Christmas gifts this year, about 29 percent less than a year ago, according to a Gallup Inc. poll.
“It’s going to be door busters and accelerated promotions to get consumers out of their funk,” Jeffrey Klinefelter, a Minneapolis-based retail analyst at Piper Jaffray Cos., said in a Bloomberg Radio interview. Retailers are fighting “a difficult battle for a limited number of dollars.”
November and December sales at stores open at least a year may rise 1 percent, the smallest gain since 2002, according to the International Council of Shopping Centers, a New York-based trade group.
To attract customers, Sears Holdings Corp., the largest U.S. department-store chain, is letting consumers buy toys, tools and consumer electronics on layaway for the first time in 19 years. This allows shoppers to buy things on an installment plan, helping Sears attract customers who don’t have enough cash on hand and don’t want to use credit cards.
‘Fight Like Mad’
Simon Property Group Inc., the largest U.S. mall owner, plans to extend hours, with 40 of its shopping centers opening at midnight on Thanksgiving.
Shoppers battered by 10 straight months of U.S. job losses and a deepening housing recession may be lured by the extra promotions even as they curb spending, analysts said.
“Consumers more than ever are willing to stand in line, wake up at absurd hours and fight like mad for the cheapest possible Power Rangers Jungle Fury Mission Helmet,” David Strasser, a Banc of America Securities analyst in New York, wrote in a Nov. 24 note to clients.
Strasser expects early-bird merchandise offerings and discounts to lift Black Friday sales, followed by “lackluster” holiday results.
The day after Thanksgiving earned the name Black Friday because it’s typically the day that retailers turn a profit for the year. That may not be the case this time, said Deborah Weinswig, a Citigroup Inc. analyst in New York.
Red Friday?
“This could be the first ‘Red Friday,’” Weinswig wrote in a Nov. 24 note to clients. Consumers may delay purchases until closer to Christmas in a holdout “for the best possible deals,” she said.
Retail stocks have tumbled along with the U.S. economy; the Standard & Poor’s 500 Retailing Index is down 38 percent this year before today. Wal-Mart is an exception, leading the Dow Jones Industrial Average with an advance of 15 percent. It is the only stock that has gained in the 30-company index, which has tumbled 36 percent in 2008.
Wal-Mart is “best positioned” for the holidays, according to Weinswig, who recommends investors buy the shares. Its discount prices and emphasis on popular categories such as electronics give “consumers a reason to shop,” she said.
‘New Frugality’
“The Black Friday deals are already out there,” said shopper Sandi O’Reilly, who spotted discounts of 30 percent and 40 percent at Kohl’s in Greensboro, North Carolina, on Nov. 24. Even steeper discounts probably won’t spur her to shop on Black Friday, she said.
“I don’t feel a desire to shop,” said O’Reilly, a former gift shop owner and account executive for Chanel SA, a private maker of designer clothing and jewelry.
“The new fashion is frugality,” Richard Jaffe, a Stifel, Nicolaus & Co. analyst in New York, wrote in a Nov. 20 note to clients.
Macy’s told its credit-card customers it plans “lots of morning specials” when it opens its stores at 5 a.m. on Black Friday. It called its one-day sale on Nov. 19 “our lowest prices of the season.”
Cranberries to Flat Panels
Wal-Mart’s grocery discounts and $4 prescriptions have helped the retailer grab market share from Target Corp., the second-largest U.S. discount chain, and other rivals this year. Bentonville, Arkansas-based Wal-Mart is turning up the pressure with early-morning Black Friday discounts including a 16-ounce can of Ocean Spray cranberry sauce for 88 cents, 34 cents less than the normal price, and a 42-inch Polaroid flat-panel television for $598, $200 less.
Electronics are the focus at Wal-Mart’s Sam’s Club membership warehouse chain. It negotiated with Nintendo Co. to provide additional accessories with its Wii game player in a package that’s exclusive to Sam’s and will sell for $425 the day after Thanksgiving.
Black Friday is “the biggest day in electronics for Sam’s and Wal-Mart,” Seong Ohm, Sam’s senior vice president of merchandising in charge of technology and office items, said in an interview.
Consumer frugality was the topic last week in personal trainer Ron Bradford’s 6 a.m. fitness class in Greensboro, North Carolina. Students talked about cutting holiday spending as they exercised, he said.
“With the economy the way it is, people are scaling back this year,” Bradford, 26, said in an interview. He, his brother and their parents decided to exchange small gifts and buy clothing and other basics for four needy school children.
“I’m focusing on enjoying time with family rather than spending money on things you don’t really need,” Bradford said.
Kohl’s Corp. held a three-day Christmas sale that ends today, with cuts of about 40 percent, in another preemptive strike before Wal-Mart Stores Inc., the world’s biggest retailer, opens at 5 a.m. on Nov. 28 with $5 Hannah Montana dolls and $8 Wrangler jeans.
The increasingly aggressive measures signal retailers’ pessimism about the economic outlook and a holiday season that analysts say may be the weakest in six years. Individuals may spend an average of $616 on Christmas gifts this year, about 29 percent less than a year ago, according to a Gallup Inc. poll.
“It’s going to be door busters and accelerated promotions to get consumers out of their funk,” Jeffrey Klinefelter, a Minneapolis-based retail analyst at Piper Jaffray Cos., said in a Bloomberg Radio interview. Retailers are fighting “a difficult battle for a limited number of dollars.”
November and December sales at stores open at least a year may rise 1 percent, the smallest gain since 2002, according to the International Council of Shopping Centers, a New York-based trade group.
To attract customers, Sears Holdings Corp., the largest U.S. department-store chain, is letting consumers buy toys, tools and consumer electronics on layaway for the first time in 19 years. This allows shoppers to buy things on an installment plan, helping Sears attract customers who don’t have enough cash on hand and don’t want to use credit cards.
‘Fight Like Mad’
Simon Property Group Inc., the largest U.S. mall owner, plans to extend hours, with 40 of its shopping centers opening at midnight on Thanksgiving.
Shoppers battered by 10 straight months of U.S. job losses and a deepening housing recession may be lured by the extra promotions even as they curb spending, analysts said.
“Consumers more than ever are willing to stand in line, wake up at absurd hours and fight like mad for the cheapest possible Power Rangers Jungle Fury Mission Helmet,” David Strasser, a Banc of America Securities analyst in New York, wrote in a Nov. 24 note to clients.
Strasser expects early-bird merchandise offerings and discounts to lift Black Friday sales, followed by “lackluster” holiday results.
The day after Thanksgiving earned the name Black Friday because it’s typically the day that retailers turn a profit for the year. That may not be the case this time, said Deborah Weinswig, a Citigroup Inc. analyst in New York.
Red Friday?
“This could be the first ‘Red Friday,’” Weinswig wrote in a Nov. 24 note to clients. Consumers may delay purchases until closer to Christmas in a holdout “for the best possible deals,” she said.
Retail stocks have tumbled along with the U.S. economy; the Standard & Poor’s 500 Retailing Index is down 38 percent this year before today. Wal-Mart is an exception, leading the Dow Jones Industrial Average with an advance of 15 percent. It is the only stock that has gained in the 30-company index, which has tumbled 36 percent in 2008.
Wal-Mart is “best positioned” for the holidays, according to Weinswig, who recommends investors buy the shares. Its discount prices and emphasis on popular categories such as electronics give “consumers a reason to shop,” she said.
‘New Frugality’
“The Black Friday deals are already out there,” said shopper Sandi O’Reilly, who spotted discounts of 30 percent and 40 percent at Kohl’s in Greensboro, North Carolina, on Nov. 24. Even steeper discounts probably won’t spur her to shop on Black Friday, she said.
“I don’t feel a desire to shop,” said O’Reilly, a former gift shop owner and account executive for Chanel SA, a private maker of designer clothing and jewelry.
“The new fashion is frugality,” Richard Jaffe, a Stifel, Nicolaus & Co. analyst in New York, wrote in a Nov. 20 note to clients.
Macy’s told its credit-card customers it plans “lots of morning specials” when it opens its stores at 5 a.m. on Black Friday. It called its one-day sale on Nov. 19 “our lowest prices of the season.”
Cranberries to Flat Panels
Wal-Mart’s grocery discounts and $4 prescriptions have helped the retailer grab market share from Target Corp., the second-largest U.S. discount chain, and other rivals this year. Bentonville, Arkansas-based Wal-Mart is turning up the pressure with early-morning Black Friday discounts including a 16-ounce can of Ocean Spray cranberry sauce for 88 cents, 34 cents less than the normal price, and a 42-inch Polaroid flat-panel television for $598, $200 less.
Electronics are the focus at Wal-Mart’s Sam’s Club membership warehouse chain. It negotiated with Nintendo Co. to provide additional accessories with its Wii game player in a package that’s exclusive to Sam’s and will sell for $425 the day after Thanksgiving.
Black Friday is “the biggest day in electronics for Sam’s and Wal-Mart,” Seong Ohm, Sam’s senior vice president of merchandising in charge of technology and office items, said in an interview.
Consumer frugality was the topic last week in personal trainer Ron Bradford’s 6 a.m. fitness class in Greensboro, North Carolina. Students talked about cutting holiday spending as they exercised, he said.
“With the economy the way it is, people are scaling back this year,” Bradford, 26, said in an interview. He, his brother and their parents decided to exchange small gifts and buy clothing and other basics for four needy school children.
“I’m focusing on enjoying time with family rather than spending money on things you don’t really need,” Bradford said.
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