Has Black Friday lost its mojo? Retail experts say it has.
Traditionally the day after Thanksgiving has kicked off the
holiday shopping period and ranked as the season's biggest sales
day. But this year worries over jobs, the economy and
fiscal-policy uncertainty threaten to take cheer out of
gift-buying for many Americans, particularly low-to-middle-income
The result: Competition for a slice of the holiday spending
pie has heated up among retailers, who've been inching
ever-earlier with promotions in recent years. For 2013, store
chains aim to jumpstart holiday shopping with savory deals well
ahead of Nov. 29, taking the limelight off Black Friday as the
traditional day for the biggest bargains and best sales
"The month of November will be incredibly promotional this
year with key items at great prices during limited hours to try
to drive that holiday frenzy we used to know on Black Friday,"
said Marshal Cohen, NPD Group analyst.
Shopping Clock Resets
Early deals will appear aplenty from retailers such asMacy's (
) andJ.C. Penney Co. (
) that will open stores on Thanksgiving night -- and more
retailers are expected to follow suit.
"As more stores open up on Thanksgiving Day for the holiday
shopping experience, Black Friday will no longer be the single
biggest sales day," said Ken Perkins, president of Retail
Metrics. "Given the lateness of Black Friday on the calendar and
given how promotional retailers are likely to be this year
because of the highly competitive environment, we're likely to
see more aggressive deals taking place prior to Black
While Perkins says Black Friday is "not going to be as
important as it had been," the day remains enough of a tradition
that bargain hunters will likely come out in full force for it,
and retailers will feed their appetite with plenty of deals.
Shoppers will be seeking bargains on electronic devices such
as smartphones, digital tablets, video gaming systems, video
games and toys.
What Black Friday's apt to lack is allure, with Thanksgiving
Day and an online sale day after Thanksgiving Weekend -- Cyber
Monday -- now sharing the limelight.
"I suspect Black Friday itself will be OK, but some of that
demand is being shifted to Thursday and Cyber Monday," said
Michael Niemira, chief economist for the International Council of
Shopping Centers. "As a whole, we're expecting a relatively
decent but modest performance for the holiday season."
Niemira forecasts a "moderate gain" of 3.4% vs. a year ago in
GAFO (general merchandise, apparel and accessories, furniture and
other) sales for November-December. That would be a "tad"
stronger than last year's 3% increase, he says.
As for Black Friday alone, retailers are really going after
the "bargain hunting" consumer -- those tending to be in
lower-income households, says Niemira, and they're "hurting more
than the upscale consumer."
Stores will have to be "more aggressive" to get people into
their stores, otherwise they will lose market share, he adds. And
with the economy growing in the range of just around 2% a year,
"it's a market share game" for retailers.
Perkins concurs that the Black Friday weekend -- Thanksgiving
Thursday through Sunday -- is apt to be "very competitive with
modest sales gains."
"The consumer mindset has taken a bit of a beating as a result
of the government shutdown and looming debt-ceiling debate," he
Consumer confidence slumped sharply in October to the lowest
reading in six months, the Conference Board's index showed
Tuesday. Perkins questions the extent to which Americans'
confidence will rebound "knowing it was only a temporary Band-Aid
that pushed these issues past the holiday into early next
Consumers are concerned about their jobs, and the majority of
mid-and-lower income consumers aren't feeling "particularly
great" about the economy or their earnings, he says.
"Therefore, they're likely to be focused on promotions and
stretching every dollar they have," he said. "That sets up for a
very competitive holiday season."
Brian Sozzi, CEO of Belus Capital Advisors, expects "damage
from the shutdown" to show up through the entire holiday season.
He says discounting at department stores has been rising each
week since the end of August.
Retailers have a shorter holiday selling season this year with
26 days between Thanksgiving and Christmas, vs. 32 last year.
Because of it, he expects more of Black Friday sales "will be
pulled forward," into early December.
"There's nothing out there to suggest the holiday season will
start on a robust note," Sozzi added.
"Retailers disappointed investors with their second-quarter
results and they disappointed with their initial third-quarter
guidance," he said. "When they start to report third-quarter
results in the next two weeks I think they will disappoint with
their fourth-quarter holiday outlooks."
Selfies In The Snapshot
Cohen expects total retail dollar sales for the Black Friday
bargain period -- from Nov. 22 to Dec. 2 -- to rise between 3.5%
and 4% vs. a year earlier. Key to his forecast is the fact that
NPD surveys show that self-gifting will remain "stable" this year
for the holiday season. Self-gifting, he says, represents 19% of
all holiday purchases.
"As long as the self-gifting number stays healthy and high,
it's critical to the success of the holiday and Black Friday," he
adds. It contributes in a huge way to Black Friday because some
Black Friday items are bought as gifts for oneself."
He sees retail sales from Black Friday through the week after
Christmas rising 2% to 2.5% vs. a year ago.
Holiday online retail dollar sales will continue to grow at a
faster pace than total sales, he predicts, rising at a minimum of
5% from last year, including Black Friday.
Beyond electronics, footwear and beauty products should do
well on Black Friday, says Cohen. And new video game consoles,
including theSony (
) PlayStation 4 andMicrosoft (
) XBox One coming out in November before Black Friday, should be
Off-price retail operators such asTJX Cos. (TJX) andRoss
Stores (ROST) are apt to stay "winners" and have "pretty strong"
days on Black Friday weekend, says Perkins.
More discount-oriented stores such as teen-focused deep
discounterFive Below (FIVE) and dollar stores -- such asDollar
General (DG),Dollar Tree (DLTR) andFamily Dollar Stores (FDO) --
are expected to be "strong" on Black Friday weekend, Perkins
High-end chains such as fashion houseMichael Kors Holdings
(KORS) and upscale jewelry retailerTiffany & Co. (TIF) aren't
involved in heavy promotions for Black Friday, says Perkins, but
they should fare well for the holiday season as a whole.
It will be a "free for all" on Black Friday weekend for
mid-tier department stores like Kohl's and J.C. Penney, specialty
apparel retailers and teen apparel retailers, he adds.
Perkins says giant discountersTarget (TGT) andWal-Mart Stores
(WMT) will be "primary destinations" on Black Friday weekend, but
he questions how strong their sales will be.
The core consumers for retailers in the mid-tier and moderate
space are "hurting," and don't have a lot of excess cash to
spend, says Perkins.
Niemira says he doesn't expect retailers to be as promotional
this holiday season overall as they were last year, when there
were a lot of unplanned promotions as retailers moved into
"I'm a little more upbeat on that to the extent that retailers
are controlling their inventories," he added. "That will help
keep the discounting closer to plan."