Brian O’Connor/The Detroit News—If you want to know why malls and big-box retailers are opening as early as 6 a.m. on Thanksgiving, the answer is the same you’ll hear from the throng of shoppers surging through the doors for those blockbuster holiday deals: fear of missing out.
Retailers know that opening earlier won’t prompt shoppers to spend more money, but they don’t care — just as long as those shoppers don’t go somewhere else.
And so, with a weak economy and five fewer shopping days between Thanksgiving and Christmas than last year, nervous retailers are moving up what used to be their big Black Friday specials to what some analysts have dubbed “Gray Thursday.” And if that means the quiet traditional family Thanksgiving gets trampled worse than a slow-moving shopper caught between the store entrance and the $98 flat screen TVs, so be it.
“It’s brutal,” says Ken Dalto, a management consultant based in Bingham Farms. “The stores are just going to keep trying to out-compete each other.”
The National Retail Federation estimates that 140 million people will shop in stores or online during the Thanksgiving weekend, down from 147 million last year. Nearly one-quarter plan to shop on Thanksgiving Day — or 33 million shoppers.
For years, retailers and shoppers engaged in an extended game of chicken, with each side waiting for the other to flinch. But two burst economic bubbles and the insidious effects of the Internet, with its free shipping and frequent lack of sales tax, pushed consumers solidly into the winner’s circle and left brick-and-mortar retailers teetering on the edge.
“Consumers won that battle,” says Dalto. “Years ago, stores discounted a week before Christmas, and now they’re doing it 10 days before Thanksgiving. And they’re not being prodded into it — they’re just doing it.”
The trend that started with 5 a.m. sales on Black Friday, stretched to midnight on Black Friday morning, then 10 p.m. on Thanksgiving and now shoppers can hit Big Lots for a $229.99 Dyson Cyclone vacuum at 7 a.m. before heading over the river and through the woods. But only if Grandma hasn’t already lined up to get Grandpa a $49.99 baitcasting reel at Gander Mountain, which opens at 8 a.m.
Sunrise on Thanksgiving, by the way, is at 7:41.
“It sounds very desperate to me,” says Jeff Green, a retail analyst who heads up Jeff Green Partners in Phoenix.
That’s because retailers are worried. All year long, the economy has suffered from headwinds that started with the end of the recession’s temporary payroll tax holiday in January, which shrunk workers’ take-home pay. Then federal budget cuts under sequestration hit, coupled with the government shutdown and a curtailing of jobless benefits. Unemployment has remained high, at 7.3 percent nationally and at 9 percent in Michigan.
Consumer confidence sank after the October government shutdown, but cash-strapped consumers already were cutting back, Green notes. Retailers had weak sales for back-to-school and Halloween, which already suggested a not-so-green Christmas. Increases in health care costs that came with the Affordable Care Act and employers raising costs on workers during the November open enrollment season is also making shoppers nervous, he added.
On top of it all, the calendar hasn’t helped one bit. The late Thanksgiving knocks out an entire shopping weekend this year and, in an event that may not repeat itself for another 70,000 years, the Jewish Hannukah celebration starts Thursday night — meaning that a whole swath of shoppers already has wrapped up holiday buying for the year.
“If your competition is going to open up on Thanksgiving, you have to do it, too,” Green says. “Whether you’re going to make any money on it is really unclear.”
While the National Retail Federation officially estimates that holiday spending will be up 3.9 percent over last year, when spending increased 3.5 percent to $602.1 billion in the United States. That increase would be higher than the 10-year average of 3.3 percent and strikes some analysts as overly optimistic in such an economically uncertain time.
“That’s just too high,” says Dalto of Farmington Hills. “It’s not going to happen.”
While shoppers may hit the Thanksgiving Day or Black Friday sales, a lot depends on whether they just snap up the big bargains, which are still profitable to retailers, and whether they stay to shop for more than just door-busters. Meanwhile, affluent shoppers who are buoyed by the rising stock market steer clear of early-morning and midnight madness. Luxury retailer Nordstrom’s won’t open for Thanksgiving and neither will Troy’s upscale Somerset Collection, home to Brooks Brothers and Tiffany’s.
“Wealthy shoppers are going to shop, because the stock market has been rising, and the middle- and lower-income shoppers are going to be down,” Dalto says.
Gray Thursday could also end up being a dingy day because of all the other holiday specials. Besides Black Friday the day after, there’s also Small Business Saturday, which promotes shopping at independent local retailers. Then there’s Free Shipping Day, an online event where retailers ship for free, which is Dec. 18 this year.
If that’s not enough, retailers have already eroded their own holiday events with early Black Friday specials, which Wal-Mart kicked off at 8 a.m. Nov. 20. As early as Nov. 6 a survey for tablet-based shopping site Catalog Spree found that 63 percent of consumers have already begun their holiday shopping, with 30 percent starting before Halloween.
On top of all that, there is an additional cost to promoting, stocking and opening up a store for Thanksgiving, notes David Cadden, a professor of entrepreneurship and strategy at Quinnipiac University in Connecticut.
“Considering that they’re paying people, are they really going to generate the additional business?” Cadden asks. “The answer would be no. They’re just running scared.”
For now, Cadden says, retailers seem to be trapped in a war of escalation, like the nuclear arms race between the U.S. and the old Soviet Union, with each store having to open earlier than its competitors. But he wonders if the media coverage of Black Friday stampedes encroaching on America’s cherished Thursday holiday might squelch the trend.
Stores such as Costco and Neiman-Marcus are getting positive press for their decision to remain closed on Thanksgiving and allow employees to be with their families, Cadden notes, unlike stores such as Staples, which has called his own daughter to work Thanksgiving night.
“What type of lunatic,” he wonders, “is going to leave dinner at 7:30 and try to get a smashing amount of Post-It notes?”