Retailer will open at 6 p.m. on Thanksgiving, and offer discounts through the season
Wal-Mart Stores Inc. is pulling back on the Black Friday frenzy this year.
Instead of stretching the event over about five
days as the retailer did last year, Wal-Mart will offer deep discounts
on gift items like TVs, DVDs and pajamas starting at 6 p.m. on
Thanksgiving at its stores until they are gone. The retailer plans to
offer longer term, though less drastic, discounts through the holiday
season.
But Black Friday sales have continued to shrink as a
percentage of total holiday sales, according to research from
AlixPartners LLP, a consulting firm. About 40% of shoppers say they
start buying gifts before Halloween, according to a survey from the
National Retail Federation.
When deeply
discounted so called “door-buster” products are promoted for multiple
days, consumers are confused about the best time to shop, said Steve
Bratspies, the company’s new chief merchandising officer, at a press
event inside a Wal-Mart in New Jersey on Wednesday. “They want simple,”
he said.
Wal-Mart will offer most Black Friday deals online first, starting early on Nov. 26, Thanksgiving.
Last
year too Wal-Mart opened its stores at 6 p.m. on Thanksgiving, but
stretched its door-buster deals over five days. Executives, at the time,
said shoppers no longer wanted to deal with the stress of a single day
of deals.
The shift reflects
an increasingly delicate balance many retailers are navigating around
the holidays—how to give shoppers the feeling that they should buy
quickly to grab deals, while also offering enticing promotions anytime a
customer happens to shop in a store or online for gifts. Adding
pressure on retailers to get it right, shoppers tend to spend most in
the first store they shop for gifts, likely drawn by a big deal on a
high-ticket item, retail consultants said. Black Friday deals,
typically, can lure such shoppers.
Black Friday “still packs a powerful punch. However, with so many stores open on Thanksgiving, promotions starting earlier and running longer, and other factors, retailers are seeing an overall erosion in Black Friday sales,” said the consultancy in a research report.
Wal-Mart,
Target Corp. and Amazon.com Inc. started offering discounts on products
that are popular gifts in early November this year.
To
offer these longer term deals, Wal-Mart bought more inventory than
usual of popular gifts like TVs, videogames and toys, executives said.
“We bought deeper than we have in the past,” said Mr. Bratspies during
the press event.
It is a risky approach to take at a time when
many retailers are complaining that slower than expected fall sales have
left them with unsold merchandise heading into the holiday season.
Macy’s Inc. said on Wednesday that unseasonably warm weather kept
shoppers from buying cold weather goods like sweaters and coats, leading
to a sharp drop in quarterly sales, sending its stock down 14% for the
day.
“I think we are OK at this
point in time,” in terms of inventory levels heading into the holidays,
Greg Foran, Wal-Mart’s CEO in the U.S., said on Wednesday. “We’d like
the temperature to cool down a bit in parts of the country, but we
aren’t at a point where we are going we have to do anything.”
On
Tuesday, Wal-Mart’s U.K. arm Asda said it would end its two year push
to offer deep discounts on Black Friday, and instead offer lower prices
over the course of the holiday season.
Target also slowed its
expansion of Black Friday, saying earlier this week it would open at 6
p.m. on Thanksgiving, the same time as last year.
Culled from The Wall Street Journal
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