Forget that Turkey trot. Thanksgiving is now the start of the annual holiday shopping endurance race, as more stores open on Thursday’s national holiday to seek a bigger share of spending that is expected to grow slowly this season.
Target Corp has joined Wal-Mart and Gap Inc in being open at least part of the day, and some retailers will be open throughout the day, a trend that began to take hold in 2011.
Traditionally, retailers enticed shoppers with “doorbuster” deals early Friday morning. Then they shifted to midnight following Thanksgiving.
Now Walmart’s U.S. discount stores, which will already be open during the day, will offer some “Black Friday” deals at 8 p.m. and special deals on some electronics at 10 p.m. Target has moved its opening from midnight to 9 p.m. on Thursday and Toys R Us is opening at 8 p.m.
Other retailers, like J.C. Penney Co Inc are holding out and will not open until Friday morning, so shoppers trying to get all the deals will need a lot of stamina.
“The retailers are taking what was a very plannable sport that was four or five hours where you can get things done and turned it into a marathon,” Trutina Financial Chief Investment Officer Patty Edwards said. “I think the retailers have diluted the sport.”
The stakes are high for U.S. retailers, which can earn more than a third of their annual sales in the holiday season. Investors hope holiday sales will help retail stocks cap a strong year. The Standard & Poor’s retail index is up almost 27 percent this year, compared with a 10.6 percent increase for the broader S&P 500.
The National Retail Federation, an industry trade group, forecast a 4.1 percent increase in retail sales during the November-December holiday period this year, down from the 5.6 percent increase seen in 2011.
Consumers heading into the holiday shopping season remain worried about high unemployment and possible tax increases and government spending cuts in 2013.
According to a Reuters/Ipsos poll, two-thirds of shoppers said they were planning to spend the same amount as last year or were unsure about spending plans, while 21 percent plan to spend less and 11 percent plan to spend more.
On Wednesday, The Thomson Reuters/University of Michigan’s final reading on consumer sentiment fell from its initial reading earlier in the month.
One element in favor of retailers this year is the calendar, as there are two more days between Thanksgiving and Christmas than last year and Christmas falls on a Tuesday instead of a Sunday, giving shoppers an extra full weekend before Christmas.
Lazard Capital Markets analyst Jennifer Davis estimated the additional two days will benefit December comparable sales by 3 percent to 4 percent.
But “the extra weekend before Christmas this year will likely amplify the post Black Friday lull and result in even more back-end loaded sales,” she said in a note to clients.
Cooler weather could boost apparel sales from last year, when unseasonably warm weather left many stores stuck with winter clothes they had to sell at drastic discounts.
But analysts and economists also said superstorm Sandy, which lashed the densely populated East Coast in late October, could cut into how much shoppers can spend on the holidays.
While the holiday season is important for all retailers, two will be under especially close watch this year – J.C. Penney and Best Buy Co Inc.
J.C. Penney is in the middle of a radical transformation under CEO Ron Johnson, who is trying to turn 700 of the retailer’s stores into collections of boutiques by 2015.
But while some of the new shops in its stores have been performing well, overall the retailer has turned customers off with its plan to eliminate coupons and most sales. Friday will be the company’s only sales event of the year.
“I think eventually it will work. It is going to be a lot of pain until it works,” Edwards said.
At Best Buy, new chief executive Hubert Joly is trying to devise a plan to stem falling sales and stave off cutthroat competition from the likes of Walmart and Amazon.com. At the same time, the company’s largest shareholder and founder, Richard Schulze, is trying to put together a bid to take Best Buy private.
“They haven’t been very price savvy, haven’t really known how out of whack they’ve been or if they’ve known, they haven’t really responded to it,” Liz Ebert Director, Advisory at KPMG, LLP, said.