Black Friday merchants expect Americans to exhale after election
Now that Election Tuesday is over, retailers are counting on the Americans turning their attention to Black Friday.
The National Retail Federation projects that about 137.4 million consumers will make purchases in stores or online over the four-day weekend that starts on Thanksgiving, marking the kickoff to the holiday shopping season. The amount Americans have spent has declined in the last three years, slipping 26 percent from 2013 to an average of $299.60 per person last year, according to the trade group.
By most accounts, this holiday season is expected to be a boon for retailers. Unemployment, gasoline prices and inflation are low, while wages, home values and the stock market continue to rise. Shoppers have the wherewithal to spend, and now retailers are hoping the holiday season will give them a reason to. Companies such as Kohl’s Corp, Gap Inc and Barnes & Noble Inc have said the US presidential election was a major cause of consumers’ recent reluctance to open their wallets. With the outcome settled, they’re expecting the dollars to finally flow.
“We’ve had some, we believe, pent up demand — just based on the economics of our consumer,” J.C. Penney Co. Chief Executive Officer Marvin Ellison said in an interview this month. “We’re anticipating we’ll see pent-up demand released, and it being postelection will only help that.”
US retail spending is expected to rise 3.6 percent to $655.8 billion in November and December, the Washingtonbased NRF estimates. Retailers are poised to take full advantage of the Thanksgiving holiday period, now known by some as Black Week, which accounts for about 15 percent of holiday spending, according to the trade group.
J.C. Penney opens its doors at 3 pm on Thursday to reach shoppers before they tuck into their Thanksgiving feasts. eBay Inc is trying to push the selling even earlier: It rebranded the day before Thanksgiving as Mobile Wednesday, using discounts to target traveling Americans. The sales will stretch through the weekend, with online and bricks-and-mortar companies offering deals for Cyber Monday.
Investors are confident that the retail industry will see strong sales. The Standard & Poor’s 500 Retail Index has risen 4.9 percent so far in November and is on pace for its best monthly return since July. Retail stocks have outpaced the broader market since the US presidential election, with the index up 4.7 per- cent since Nov 8, compared with the broader S&P 500’s 3 percent rally. Historical studies indicate that elections affect the timing of retail sales rather than the overall volume, said Jerry Storch, CEO of Saks Fifth Avenue owner Hudson’s Bay Co.
“Hopefully, when we get to Black Friday, which really tolls the bell of holiday shopping, the consumer will start looking forward to Christmas,” Storch said.
For shoppers who are ready to spend, they have more ways than ever to do so, with retailers including Wal-Mart Stores Inc and Amazon.com Inc offering exclusive deals to customers who download their mobile applications. Nonstore sales may increase 7 percent to 10 percent this year, reaching as much as $117 billion, according to the NRF. Online sales account for the bulk of this measure, the group said.
“If Amazon had everything, like everything you need in the world, I would buy everything from there,” said Oscar Viral, a 58-year-old chef in New York. “I wanted something from Macy’s, and I got on the internet because they didn’t have it available in the store.”
With shoppers able to go online any time for deals, some malls are bucking the trend of opening earlier on the Thanksgiving holiday and staying closed that day. The country’s largest shopping mall, the Mall of America in Minneapolis, will remain closed, reopening at 5 am on Friday. But the 520 stores inside have the option to open on Thursday. CBL & Associates, a developer, said it would keep 72 of its malls closed that day, as well.
Still, the largest mall operators, Simon Property Group Inc. and General Growth Properties Inc haven’t made plans to close on Thanksgiving, nor have major department-anchors that typically drive early traffic.
No matter when they shop, customers will be hunting for bargains. While a survey of about 1,000 US consumers by Alix Partners indicated that 83 percent of shoppers expect to spend about the same or more this holiday season, mobile phones are making price comparisons simpler than ever.
Marvin Ellison, J.C. Penney Co’s chief executive officer