Big bargains tempted cautious consumers to spend during the Thanksgiving holiday weekend, as shopping on Turkey Day displaced Black Friday, according to a Reuters/Ipsos poll.
Retailers invested a tremendous amount of marketing effort and energy in opening their doors earlier than ever before on Black Friday (and increasingly on Thanksgiving Day itself), and in making sure that the array of discounts available was more extensive and more alluring than ever. The hope was that this combination would attract value-conscious shoppers into stores and convince them to open their wallets. And according to the results of a recent Reuters/Ipsos poll, the tactics seem to have paid off: 30% of the 3,815 Americans surveyed say they shopped either online or in stores on Thanksgiving Day itself, 20% of them visiting a store in person.
That compares to 29% of survey respondents who said they shopped on Black Friday itself, historically the biggest shopping day of the year but that seems to have lost its pre-eminence in 2012.
One possible reason for consumers’ willingness to shop on Thanksgiving Day itself is the increasing availability of online offers from traditional bricks and mortar retailers as well as from online players such as Amazon (AMZN). Half of those who shopped on Thanksgiving say they made an online purchase, and e-commerce transactions continue to grow as a percentage of total sales.
Still, with online sales still accounting for only 4.7% of total retail sales, shoppers clearly still prefer the “in person” shopping experience, and the poll reveals that their top destination on the Thanksgiving holiday weekend were department stores, followed by discounters. Of the survey’s respondents, 46% of those who say they shopped on Black Friday visited a department store, while 39% spent money at a discounter. Third on the list were electronics retailers, visited by 30.2% of the respondents.
That survey data tends to correspond with the same-store sales data, which suggests that department stores are likely to witness the biggest increase in same-store sales for the fourth quarter of 2012, with analysts forecasting a 3.1% jump in same-store sales for the period (vs. 0.5% SSS in Q4 2011).
One of the beneficiaries may be Macy’s Inc. (M.T). The company’s chairman and CEO, Terry Lundgren, described the holiday weekend as the largest ever such period, by sales volume, in the venerable retailer’s history. As a result, Macy’s is line to post a 4% jump in SSS for the fourth quarter of 2012, although rival Nordstrom (JWN.N) may post the strongest gain amongst all the department stores. Analysts are calling for it to report a 4.7% gain in SSS, although that wouldn’t measure up to the 7.1% jump the department store reported for the fourth quarter of 2011.
But a good Black Friday may not be enough for other sectors of the retailing universe to post stronger gains in same-store sales for the fourth quarter of 2012. For instance, while analysts project that the discount retailers will see a 2.6% gain in SSS for the fourth quarter, that will be below the 3.3% advance recorded in the fourth quarter of 2011. Even removing Wal-Mart Stores (WMT.N) from the group, while it boost the absolute gain to 4%, doesn’t change that pattern.
One possible reason for this is that investors remain cautious when it comes to spending. They are unwilling to open their wallets and spend freely, and spend a lot of time researching to find the best bargains – that is one reason retailers like Target (TGT.N) emphasized their willingness to match prices advertised by online retailing rivals in their holiday sales promotions. The recession seems to have taught consumers to be on the lookout for deals, and not to spend unless they find them. Indeed, the Reuters/Ipsos poll reveals that 38% of Black Friday shoppers spent less than they had budgeted, while 47% say they stayed right on budget. A mere 15% went over budget, and nearly a third of those surveyed said they spent less than they did on Black Friday of 2011.
While the survey shows that shoppers remained cautious on the Thanksgiving holiday weekend, it also revealed that they have a lot more spending still to do before the end of the year. Most respondents completed less than a quarter of their holiday shopping, which augurs well for retailers’ December same-store sales results. Although it’s still too early to gauge how retail trends are taking shape for December, so far, at least, analysts are publishing higher SSS forecasts for this month than the December 2011 SSS results. Even after Hurricane Sandy took a big bite out of SSS for November, retailers may still find a reason to celebrate this holiday season after all.
For more insight into analysts’ changing views of retail Sales, and the Ipsos Poll results, please click here.
