Kevin Kelley will hit the stores on Friday’s holiday shopping kickoff armed with a plan of attack.
He and his wife will pore over newspaper ads, digging for deals on items on their Christmas list. They’ll begin their hunt at about 5 a.m. and be done by lunchtime.
The couple has tapped into pre-holiday sales for small gifts. But they’re holding out for Friday’s door-buster deals Ā in general Ā and on items on their list like toys and video games.
“We try to get about half of our shopping out of the way that day, maybe a little more,” said Kelley, of Atlanta.
Kelley is one of the millions of shoppers who will hit the stores on Black Friday, the unofficial start to the holiday season.
The day after Thanksgiving is known as Black Friday because, traditionally, that’s when retailers turn profitable, or “in the black.”
Retailers are likely to get a nice lift on Black Friday as they draw bargain-hungry consumers with savory deals.
A recent survey from America’s Research Group showed a hefty 37.2% of families plan to shop on Black Friday, vs. 33.5% last year.
Black Friday is likely to pack a bigger punch than last year, despite efforts by many retailers Ā from Wal-Mart (WMT) to Kohl’s (KSS) Ā to offer steep discounts early.
“Black Friday is likely to be more important than past seasons,” said Michael Niemira, chief economist at the International Council of Shopping Centers.
The share of consumers planning to start their holiday gift shopping on Black Friday this year rose to a record 16%, from 10% in 2008 and 2007 and a prior high of 13% in 2006, said a recent survey for ICSC and Goldman Sachs conducted by Opinion Research.
In the past couple of years, key shopping events have been the big sales drivers, a pattern Niemira says became more pronounced during the recession.
Keeping with the penny-pinching behavior consumers have shown, Black Friday will likely be a bigger driver of November sales than in past years, Niemira says.
“It’s really event-driven thinking on the part of consumers because they’re so focused on bargains,” he said. “There may be plenty of bargains found before and after. But the perception is the best bargains are found on Black Friday.”
Ken Perkins, president of Retail Metrics, concurs.
“Black Friday is such an ingrained day in the American psyche, I don’t think early sales will siphon too many sales out of Black Friday,” Perkins said.
An improving economy and a stock-market rally have helped put consumers in a buying mood, which should likely lead to better Black Friday sales than in 2008, says Perkins.
“Consumers aren’t as hunkered down as they were last year,” he said. “The difference in mentality between this year and last year is stark.”
Still, consumers will remain frugal and buy only when they’re offered good incentives, Perkins says.
Black Is Back
Britt Beemer, chairman and founder of America’s Research, expects this Black Friday to be the biggest in at least last five years.
Consumers interviewed by America’s Research said they believe they can find the best deals across the board with the best selection on Black Friday, Beemer says.
“A lot of families told us they’re going to make a special effort to shop on Black Friday morning because if they do get a TV or something else, it will likely be the only gift for the family this Christmas and ‘I know it’s the best day for the best deals,’ ” he said.
Shoppers will be picky. Cell phone upgrades, video games, flat-panel TVs, digital readers, graphic T-shirts and traditional gift items such as sweaters are among the hot items on consumers’ Black Friday shopping lists this year.
Though high-end purchasing is picking up, items such as expensive jewelry and pricey fashions aren’t likely to take off, says Perkins.
The hot categories for Black Friday through Monday are clothing, electronics, toys, video games and accessories, says a survey by Consumer Reports.
Black Friday’s performance isn’t a good gauge of how the holiday season will play out, Niemira cautions.
Consumers are likely to keep holiday spending at bay. The jobless rate stands at a woeful 10.2%.
Still, the season should be brighter than last year, when retailers saw the worst Christmas since at least 1970.
Christmas same-store sales should rise 1% vs. a year ago, says Niemira. That’s not much, but it’s far better than 2008’s 5.8% drop.
Shoppers will find plenty of good deals on Friday. Wal-Mart vowed to match the price of any local rival’s printed ad on Black Friday. Hit a Wal-Mart from 5 a.m. to 11 a.m., and you’ll find an Emerson 32-inch LCD high-definition TV for $248 and a 42-inch plasma TV for $448 Ā in limited quantities.
Wal-Mart also will feature a Magnavox Blu-ray Disc player for $78 and an HP laptop for $298.
From 4 a.m. to 1 p.m., Kohl’s will offer more than 300 bargains, both in its stores and online, including a 7-inch portable LCD TV from Digital Labs for $69.99 vs. the regular price of $199.99. It’s also offering 50% off Fisher-Price, Playskool, Hot Wheels and Barbie toys, among other deals.
“Consumers will be spending more on the big deals in the morning,” said Beemer. “But almost all the deals will be gone quickly. Once the sales are gone, consumers will be very, very cautious.”
Fewer Big Sales This Year
For their part, retailers are likely to be less aggressive throughout the holiday season than last year, when sales plunged, says Perkins. Retailers are keeping inventories tight, so it’s less likely they’ll have to slash prices to clear unsold goods.
“Margins will be much better than last Black Friday because all the discounts will be planned vs. unplanned last year,” Perkins said.
Last year, stores panicked and turned to deep discounts to pare inventories, says Marshal Cohen, chief industry analyst of NPD Group.
He says there’s no need for deep, broad-based discounting this year. Retailers will offer aggressive discounts on select items vs. store-wide sales last year, Cohen predicts.
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