Tuesday, November 22, 2011

Black And Blue Friday

This holiday week means Black Friday is coming, and retail chains are bringing out the big guns trying to get Americans into stores.  But since we've been trained to expect deep doorbuster discounts, what will they use this year to get shoppers back into stores as a second recession looms?

Black Thursday, of course.

Wal-Mart Stores Inc, Toys R Us and outlet malls are among those hoping that big discounts on Thursday night will attract shoppers hungry for deals after Thanksgiving meals.

Others such as Target Corp, Macy's Inc and Kohl's Corp will join the fray during the wee hours of Friday, opening their doors hours earlier than in past years.

The early sales, along with more advertising spending, show that retailers are taking no chances as they fight for their share of the limited amount shoppers plan to spend. The moves, which include adding staff, securing bargains on video games and offering free shipping, also can eat into profit margins.

Gross margins at U.S. department stores and broadline chains are expected to fall an average of 0.4 percentage points this year because of higher product, labor and transportation costs, according Barclays Capital analyst Robert Drbul.

Discounts just add to that margin pressure.

"If you're not promotional and you don't have great product, I think you're going to have a very challenging time this holiday season," said Jeff Van Sinderen, senior analyst at B. Riley & Co.


Capitalism doesn't take the day off...not even for Thanksgiving, apparently.  Will it help or hurt the retail chains?  We'll know pretty soon, but my guess is it's going to be a wash compared to last year at best.  Get used to working on Thanksgiving, would be my guess.  It's not just for hospitals and police stations anymore.

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