Black Friday shoppers stay away from stores, make $7 billion-plus splurge online - Reuters

WASHINGTON (Reuters) - U.S. shoppers made more purchases online on Black Friday than in the mall - hurting traffic and sales at brick-and-mortar stores, according to data that offered a glimpse into what is still one of the busiest shopping days of the year.

People walk through the King of Prussia mall, one of the largest retail malls in the U.S., on Black Friday, a day that kicks off the holiday shopping season, in King of Prussia, Pennsylvania, U.S., November 29, 2019. REUTERS/Sarah Silbiger

For the first time in several years, however, store traffic on Thanksgiving evening grew - indicating a shift in when consumers are leaving their homes to shop. It is also a sign of how Thursday evening store openings have continued to hurt what has traditionally been a day that kicked off the U.S. holiday season.

The importance on the shopping calendar of Black Friday, or the day after the U.S. Thanksgiving Day holiday, has waned in recent years. This is due to the choice by many retailers to open their stores on Thursday evening, as well as to early holiday promotions and year-round discounts. However, it is increasingly turning into a day when shoppers do not necessarily flock to stores but spend heavily online.

Also, for most retail chains, Black Friday store traffic and sales data is not necessarily grim as consumers continue to spend, consultants said. Winning the transaction, whether online or in-store, has now become more important for retailers than where it occurs.

Top brick-and-mortar retailers like Walmart Inc (WMT.N), Target Corp (TGT.N) and Best Buy (BBY.N) have continued to spend billions of dollars trying to expand their e-commerce operations to capture that growing online revenue.

Also, spending patterns over the weekend are not as indicative of the entire holiday shopping season as they were a few years ago, with purchases spread over November and December.

Online sales rose more than 19.6%, reaching $7.4 billion on Black Friday, slightly shy of estimates of $7.6 billion, according to data from Adobe Analytics, which tracks transactions at 80 of the top 100 U.S. retailers. On Thanksgiving, it estimated sales grew 14.5% to $4.2 billion.

Numbers from ShopperTrak, which is part of retail data firm Sensormatic Solutions, showed that visits to stores fell a combined 3% during Thanksgiving and Black Friday compared with the same days in 2018.

Shopper traffic on Thanksgiving evening increased by 2.3%year-over-year but was dragged down by Black Friday, which fell 6.2% from a year ago.

Brian Field, senior director of global retail consulting for ShopperTrak, said the traditional pattern of shoppers visiting stores has been disrupted not only by online shopping but by offerings like “buy online and pick up in store,” a growing category, which is not included in store traffic count on Black Friday.

“What all of this really boils down to is the customer journey has changed, now it can start anywhere online, in-store and end anywhere ... and it is about making sure the customer makes the purchase and stays loyal to the brands more than where it happens,” he said.

Preliminary data from analytics firm RetailNext showed net sales at brick-and-mortar stores on Black Friday fell 1.6%, which the firm said is slower than in previous years. No data was yet available for actual spending in stores.

The National Retail Federation had forecast U.S. holiday retail sales over the two months in 2019 will increase between 3.8% and 4.2% from a year ago, for a total of $727.9 billion to $730.7 billion. That compares with an average annual increase of 3.7% over the past five years.

Reporting by Nandita Bose in Washington; Editing by Matthew Lewis

Our Standards:The Thomson Reuters Trust Principles.

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Black Friday shoppers spend record $7.4 billion in second largest online sales day ever - CNBC

A group of Black Friday online shopping purchases photographed in delivery boxes filled with polystyrene packing pellets, taken on September 13, 2019.

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Black Friday shoppers spent $7.4 billion online, the second largest Internet shopping day ever, according to data compiled by Adobe Analytics.

The $7.4 billion marked the biggest sales day ever for Black Friday and trailed only last year's Cyber Monday's $7.9 billion for the number 1 spot of all-time in online revenue, according to Adobe's data. The average order value per consumer, at $168, was up nearly 6% year-over-year and also set a new Black Friday record. Adobe Analytics measures transactions from 80 of the top 100 U.S. online retailers.

"Small Business Saturday" has already seen $470 million in online spend, up 18% over last year, as of 9 a.m. ET. Sales are on pace to surpass $3 billion for the day, said Adobe.

"With Christmas now rapidly approaching, consumers increasingly jumped on their phones rather than standing in line," said Taylor Schreiner, principal analyst and head of Adobe Digital Insights, in a statement. "Small Business Saturday will accelerate sales for those retailers who can offer unique products or services that the retail giants can't provide."

Online sales are up about 20% from last year, according to Adobe. The jump in cyber activity is a sign consumers are becoming more comfortable buying larger items at discount prices without going to the store. Adobe is still expecting spending on Cyber Monday this year to hit an even bigger record $9.4 billion, an 18.9% jump from a year ago.

Shoppers have already spent $4.2 billion online on Thanksgiving Day, a 14.5% increase from last year and a record high, Adobe said Friday. Some of the most popular purchased items include Disney's "Frozen 2" toys, video games such as FIFA 20 and Madden 20, and electronics such as Apple Airpods and Samsung TVs.

While some traditional brick-and-mortar stores have successfully transitioned to online shopping, such as Target and Walmart, others including Kohl's, Gap and Macy's have struggled. Target's stock has risen about 95% this year and Walmart has surged nearly 30% while Kohl's, Gap and Macy's shares are down 25% or more year to date.

WATCH: These six retailers facing make-or-break holiday shopping season.

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Black Friday shopping at brick-and-mortar stores dropped by 6% as consumers spent record online - CNBC

Black Friday shoppers wait to purchase goods at a Best Buy store on November 29, 2019 in Emeryville, United States. Black Friday is traditionally the biggest shopping event of the year, and marks the beginning of the holiday shopping season.

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Black Friday brick-and-mortar retail sales fell by 6.2% compared to last year as consumers eschewed in-person shopping for online purchasing, according to preliminary data from ShopperTrak.

The pullback corresponds with a jump in Black Friday spending online, which hit $7.4 billion, the largest online Black Friday total ever, according to Adobe Analytics.

"There is no longer one way to shop on Thanksgiving Day and Black Friday," said Brian Field, senior director of global retail consulting for ShopperTrak. "Black Friday continues to remain the busiest shopping day of the year by a long shot."

The drop in Black Friday physical shopping mirrors a year-long share pullback in departments stores including Macy's, Kohl's and Foot Locker, all of which are down more than 25% this year. Meanwhile, Amazon, the dominant U.S. e-commerce retailer, has gained about 20% this year.

Brick-and-mortar sales on Thanksgiving Day rose 2.3% from a year ago, resulting in a combined 3% decline for the two-day period, according to the ShopperTrak data.

Eight of the 10 predicted busiest shopping days of the year are still to come as the December holidays arrive, according to ShopperTrak. Dec. 2, also known as Cyber Monday, is on track to break records as the biggest online sales day ever, at $9.4 billion, based on Adobe estimates.

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It's a make-or-break holiday season for these six retailers - CNBC

For many, the holidays spark joy, and are a time to relax in the comfort of family and friends.

If you're in retail, however, it's a bit of a different story — especially if your business is struggling.

Some retail executives really feel the pressure this time of year, as the holiday season can make or break a business. For some companies, the holiday season can account for as much as 30% of annual sales. A company's performance during this time, good or bad, can set the tone for the new year. And the beginning of the year is often when announcements of store closures and layoffs in the industry will trickle out.

"There is something to be said about creating momentum and having a strong fourth quarter," said Rob Garf, vice president of strategy and insights for Salesforce with a focus on retail. "There are going to be some winners and losers this holiday season. The winners have made a ... focus on digital transformation, pervasive in their culture."

The losers, however, haven't invested enough to make their stores and websites worth visiting.

Here's a list of companies that have a lot to prove before the year is over.

J.C. Penney

Market cap: $374 million
Stock performance over the past 12 months: down 19.4%

Shoppers sit outside of a J.C. Penney store at the Westfield Mall in Culver City, California.

Martina Albertazzi | Bloomberg | Getty Images

Last year, it was disappointing holiday sales that sent J.C. Penney's stock below $1 for the first time. For much of 2019, the department store chain has struggled to boost investor confidence and push shares higher. Its new CEO, Jill Soltau, is rolling out her own strategies, in an attempt to turn around Penney's business. But the company is running out of time to show signs of progress. It is highly leveraged, with debt hanging over its head, as it works to stem sales losses.

Penney's latest quarter was encouraging, with it reporting a narrower-than-expected loss. But sales tumbled 10.1% from a year prior. Sales have fallen for the past seven quarters.

Penney's stores, meantime, have been criticized for being stale and lacking modern fixtures. The company has also struggled to bring in new and relevant merchandise, especially for younger shoppers. Soltau says, among other things, the company is trying to display inventory more prominently in stores, by using mannequins and other visual set-ups. But Target and Walmart are simultaneously investing in their own apparel and home goods brands, while remodeling their stores. If Penney wants to keep its stock above $1, and avoid being delisted from the NYSE, it needs to win sales this holiday season to give investors hope.

Bed Bath & Beyond

Market cap: $1.83 billion
Stock performance over the past 12 months: up 16.6%

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Bed Bath & Beyond has a new chief this holiday season. Target's former executive vice president and chief merchandising officer, Mark Tritton, took over on Nov. 4. Tritton helped develop many of Target's newer in-house brands and has been credited with getting the big-box retailer back to being known as "cheap chic." His arrival at Bed Bath & Beyond is being monitored closely. But for this holiday, he will be executing someone else's plans.

Bed Bath & Beyond has reported same-store sales declines for the past 10 quarters, and for the past two quarters they've been down around 6%. Part of its strategy to get back to growth has included pruning its real estate. The company, which also owns Buybuy Baby and World Market, has said it plans to shutter about 60 stores this fiscal year, which ends in March 2020. About 20 of those are expected to be under the Bed Bath & Beyond banner. It had more than 1,500 locations in its fiscal second quarter ended Aug. 31.

Though Bed Bath & Beyond might not be a top shopping destination during the holiday season, the company needs to find ways to drive shoppers to stores to find the same knickknacks they could get on Amazon. Or more store closures might be needed in 2020.

Kohl's

Market cap: $7.65 billion
Stock performance over the past 12 months: down 29.4%

A shopper browses clothing at a Kohl's Corp. department store in Peru, Illinois

Daniel Acker| Bloomberg | Getty Images

Kohl's isn't in as poor a shape as some of its peers in the industry. It's not on any bankruptcy watch lists. But this holiday season is arguably an important one for the company and CEO Michelle Gass to prove her plans to drive traffic and sales are working.

During the third quarter, Kohl's really disappointed Wall Street. It slashed its profit outlook for the full year, saying it expects the retail industry to be highly promotional during the holidays. Kohl's said its women's apparel business has been struggling more than other categories. It said rival retailers are also getting more competitive in the home furnishings department.

However, Gass said she was confident that Kohl's had a strong plan in place to bounce back during the fourth quarter, thanks to a handful of brand launches, heightened marketing and an expanded partnership with Amazon to accept returns. Kohl's results from this holiday season will say a lot about how those efforts are being received by consumers.

In many ways, though its stores aren't normally found at shopping malls, Kohl's shares the same struggles as Macy's and Nordstrom in the department store space. Nordstrom heads into this holiday season with a massive new flagship shop in Manhattan that is expected to bring in big sales. While Macy's, after a dismal quarter, is trying to prove to Wall Street its turnaround plans have legs.

L Brands

Market cap: $5.3 billion
Stock performance over the past 12 months: down 42.5%

A customer carries a shopping bag while exiting a Victoria's Secret Stores LLC store, a subsidiary of L Brands Inc., in New York, U.S., on Wednesday, Nov. 14, 2018.

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L Brands' sales have fallen for the past two quarters. And much of that is due to weakness at its Victoria's Secret brand, which has reported six consecutive quarters of same-store sales declines.

When it reported earnings last week, L Brands confirmed it would be canceling its 2019 Victoria's Secret Fashion Show, as it tries to pivot marketing away from the overly sexy images it has become known for. Female teens used to flock to L Brands' PINK stores around the holidays for branded pajama sets and sweat suits. But the company has struggled as American Eagle's Aerie division and online companies such as Adore Me and Third Love have surged in popularity.

L Brands' Bath & Body Works division, which sells holiday-scented hand soaps and candles, tends to have a stronger holiday season. But the worry has been that Bath & Body Works' sales growth has been stalling, too.

Gap

Market cap: $6.39 billion
Stock performance over the past 12 months: down 36.3%

People carry shopping bags in New York City.

Stephanie Keith | Getty Images

Gap just had a really bad quarter. And it isn't predicting the fourth one will be that much better. It also slashed its full-year profit outlook, when it announced CEO Art Peck was stepping down, effective immediately, in early November. Gap's total sales have fallen for the past four quarters.

Now, with an interim CEO and an ongoing search for a new chief, Gap is hitting reset. But one thing it says it won't change are its plans to spin off its Old Navy brand into its own publicly traded company. Some investors are relieved the company is pushing forward with the split. But others worry about its rationale if growth slows at Old Navy, which was once the star of Gap's multibrand portfolio. More recently, it has been caught in its own sales slump, along with Gap's namesake brand and Banana Republic.

Meantime, Gap is known for being heavily promotional. But too many deals in stores this holiday season could end up weighing further on profitability. Gap needs to find a balance during the holidays, between exciting shoppers with deals and keeping its profit margins in check.

Barnes & Noble

Barnes & Noble

Michael Nagle | Bloomberg | Getty Images

Barnes & Noble has been struggling for years now to pull itself out of a sales slump. Previously, it was doing so under public scrutiny. But in July, activist firm Elliott Management announced it would be acquiring the bookseller for roughly $683 million, including debt.

Still, Barnes & Noble faces a tough battle each holiday season. It has been ceding market share to Amazon. And pressure has mounted as more consumers turn to their smartphones, instead of books, to pass time. Barnes & Noble has been shutting some of its larger locations in favor of opening up smaller-format shops with cafes and, in some instances, eateries. This holiday season will give the company, under new private management, a chance to prove its turnaround plans are working.

Officials at these six retailers weren't immediately available to comment.

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Black Friday 2019: Holiday retail workers see ups and downs - Los Angeles Times

For many shoppers, the Black Friday weekend means finishing a hearty meal at home before venturing out to their favorite stores to try to snag the latest deal.

But for retail employees, the official kickoff of the holiday shopping season means their own holiday plans get cut short as they brace for the rush of sometimes cranky people.

“I’m kind of used to it, in the sense that I already know that I have to leave my family,” said a supervisor at a Best Buy store in Southern California, who like all the workers interviewed, spoke anonymously out of fear of repercussions from employers.

Over half of her family works in retail; to accommodate everyone’s working schedules, her Thanksgiving dinner has become a lunch. “Everyone has to leave to the stores,” she said.

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The stresses of the season compound what is already a difficult way to make a living.

Over 140,000 people in Los Angeles work in retail, and eight in 10 of them must deal with schedules that vary drastically from week to week, according to a UCLA Labor Center Study. Haley Potiker, from Fair Workweek LA, an initiative to secure better working conditions for retail employees, notes that women of color comprise a large part of this workforce.

Some retailers go out of their way to make their employees feel more welcome working away from home on Thanksgiving, such as arranging special lunches for workers or offering extra pay.

One general manager at a Best Buy store, who wasn’t authorized to speak publicly, said he understands the sacrifices that his employees have to make when working the holiday.

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Managers try to provide a festive meal for their workers — bringing turkey, ham and other Thanksgiving staples — as a gesture that recognizes the sacrifices workers have to make to be there. Employees partake in the break room feast during their 45-minute lunch break.

“It’s like leaving one family to come to another,” he said, describing how closely his employees work together.

A collegial atmosphere among employees doesn’t mean that workers are shielded from the stress of working Black Friday. Gigantic crowds, often filled with shoppers primarily focused on securing a deal, make the holiday the most stressful day of the year for workers behind the counter.

The sheer number of shoppers makes the usual encounters between customers and cashiers relatively brief, but interactions with impatient or angry consumers can leave cashiers feeling shaken.

“Customers really do think that front-line retail workers are sort of a stand-in for the corporation as a whole, sometimes, and so they’ll really let loose on those workers,” Potiker said.

In addition, working hours on these days can be grueling.

One cashier working the counter at a big-box retailer said her Thanksgiving shift began at 4 p.m. and lasted until 12:30 a.m. Workers are sometimes held back to make sure workflow can resume normally after they clock out. Leaving punctually or not, she had to report back to the store before 8 a.m. for her next shift.

Still, she says this isn’t the longest Black Friday shift she’s had to work: At Walmart a couple of years ago, she started work at 5 p.m. on Thanksgiving and didn’t stop until 5 a.m. the next day.

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Though workers get compensated overtime for the hours they work past their set schedule, the extra time can be rough.

“It doesn’t matter in a sense” what the overtime rates are, the Best Buy supervisor commented on working past her shift. “Because my body doesn’t know that it’s overtime. It just knows it’s not gonna get enough sleep from today until tomorrow.”

Many retail workers find themselves with no choice but to accept this schedule. Throughout the year, employees are often uncertain of the number of hours they’ll work a given week, Potiker said. Even after these hours are posted, they’re subject to change.

The UCLA Labor Study reported that most workers have faced last-minute changes or cancellations to their hours even after they had been posted.

This uncertainty leads to an unstable source of income and added anxiety for workers who rely on that pay. According to the study, one in two retail workers are late in paying their bills. Potiker noted that despite the intensity of Black Friday shifts, workers sometimes think that “at least they’re finally working full time and earning enough in overtime wages to start getting ahead.”

“Is it selfish to say the money helps?” one employee at Best Buy joked on Friday morning. He didn’t really have a choice as a new hire about whether to work Black Friday, though neither did more veteran employees.

Many big-box retailers employ an all-hands-on-deck scheduling plan when it comes to Black Friday. At one Best Buy, employees say there are nearly a hundred workers on the floor during the Thanksgiving rush, either retrieving items for customers, working every cash register or making sure that nothing gets stolen.

They say it’s difficult giving an exact number of customers that they serve, but one guessed that at least a thousand people flow in and out of the store. The Best Buy supervisor explained how last year, for example, the rush of people coming into her store started at 5 p.m. on Thanksgiving and didn’t slow down until 1 a.m.

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The supervisor said she wished customers would be more empathetic and patient when interacting with retail workers. “We’re already giving our time and our time with our families just to be here.”

Another Best Buy cashier echoed a similar sentiment. Rude customers “don’t realize that we’re people and what they say is obviously going to affect us.”

She, too, wants customers to recognize the time that employees are spending away from their families; working Thanksgiving this year means that she won’t be able to spend time with her godparents, whom she doesn’t see for months at a time.

“Something that really bothers me is when [customers] say, like, ‘Oh, I’m sorry you have to work on Thanksgiving, that sucks,’ ” she said. “But they’re literally the reason that you’re working on Thanksgiving.

“If you really cared about the fact that we’re working on Thanksgiving and we’re away from our families, why would you come into the store?”

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How Target became a model retailer - Los Angeles Times

American retailers, school is in session. The teacher? Target Corp.

Yes, Target. The cheap-chic retailer — in distress just five years ago — has morphed into a model for how to avoid the retail apocalypse.

Over that time, Chief Executive Officer Brian Cornell has overseen a $7-billion turnaround plan that includes opening and remodeling hundreds of stores, creating dozens of exclusive private-label brands and expanding the ways it gets its merchandise into shoppers’ hands.

The results, punctuated by a near-perfect third quarter, have been notable. Target has now reported quarterly same-store sales growth of at least 3% for two straight years, along with wider profit margins in recent quarters. The stock is the best performer by far in the S&P 500 Retailing Index this year.

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The performance has analysts agog, with Barclays saying the company is “firing on all cylinders,” and Moody’s Investors Service proclaiming it’s in “rarefied air.” Sanford C. Bernstein even entitled its latest note, “Best Company Ever?”

Although that may be a bit of a stretch, it does show that Target’s playbook has some fundamental lessons for retailers in the age of Amazon.

And recent results from companies including Macy’s Inc., Gap Inc., J.C. Penney Co. and Kohl’s Corp. show that plenty of retailers need some schooling. The laggards blamed their woes on factors such as unpopular products to unusual weather.

But there’s no room for excuses this holiday season: Since the period between Thanksgiving and Christmas is six days shorter than last year, every day will have to count.

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Of course, some other retailers also are doing well. Walmart Inc., Best Buy Co. and Costco Wholesale Corp. are gobbling up their fair share of the $100 billion in sales that Cornell has said is up for grabs in the wake of Sears Holdings Corp.’s bankruptcy and the demise of Toys R Us and other chains.

But Target is the best example of pulling off what consultant Toopan Bagchi, a former Target executive now with the Navio Group, calls “transforming while they perform.” This means getting the basics right while successfully preparing for an uncertain future.

Here’s how Target is hitting the bull’s-eye:

• It’s turning its stores into destinations. Target has remodeled almost 300 locations this year alone and will renovate more than 1,000 by the end of 2020. The easier-to-shop locations are delivering higher traffic and sales, and it appears the benefits are persisting well into the second and third years following improvements. The company has also opened more than 100 smaller stores in cities like New York and near college campuses to reach younger and more affluent customers.
• Its products are in demand. Target’s design team has developed more than two dozen new in-house brands, with the retailer hitting paydirt on several of them. The women’s clothing line A New Day, for example, surpassed $1 billion in sales in just over a year. Target also has collaborations with celebrities like Chip and Joanna Gaines of the reality TV series “Fixer Upper.” The store brands deliver wider profit margins than national brands do, and the steady stream of launches keeps customers coming back to see what’s new.
• Its web strategy is working. Target’s digital development was stunted by a 2013 data breach, but it has come roaring back over the past two years by spending billions of dollars to improve and expand its e-commerce capabilities. The trick is to nudge shoppers toward store-pickup options like curbside that cost it much less and help to preserve profit margins. More than nine out of 10 shoppers in the U.S. are likely to grab online orders in the store to save money or time, according to a CommerceHub survey
• It’s avoiding distractions. Retailers today are carrying out lots of new initiatives “but they are not really executing them,” according to analyst Neil Saunders of GlobalData Retail. For example, he points to J.C. Penney’s fancy new concept store, which “does nothing to move the dial.” Target, meanwhile, has 25 mini-Disney stores that will capitalize on upcoming movie releases from the “Star Wars” and “Frozen” franchises.

Still, there’s room for improvement.
Target’s grocery business has been a dud for years, and it has failed to transfer its brand-development magic to the food aisle. This is a missed opportunity, since sales of food sold under retailers’ store brands are growing twice as fast as products from national brands, according to Cadent Consulting Group. Target’s new grocery label, Good & Gather, could help in this area.

But the stumble is minor compared with the missteps of other retailers, which have included fashion misses, inventory buildups and a general failure to convince shoppers to leave their couches and head into the store.

“This winner and loser phenomenon will continue as we go into 2020,” Cornell said on Nov. 20, following the company’s earnings release. “It feels good to be planted in the winner’s circle.”

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Winning Black Friday Retail Stocks: Target, Five Below, and 1 More - Barron's

Retail is getting increasingly competitive, making picking winners and losers in the sector extra difficult. And the lateness of 2019 Thanksgiving is shifting retail sales around. That makes it even harder for investors to evaluate retail trends.

Those things, however, haven’t bothered Citigroup. In fact, the broker picked Black Friday winners and losers before the shopping even happened. They have three ideas for investors.

“Let’s be honest. We can easily write [the holiday review] now—actually we wrote most of this a year ago,” wrote analyst Paul Lejuez in a research report published late Wednesday night. “Here’s what we would have written in a Monday review note after Thanksgiving weekend if we didn’t write it today.”

He says stores are becoming “extremely promotional,” pushing Black Friday deals earlier in the week. That makes it difficult to use Black Friday mall traffic as a barometer of success. The growth of online shopping has the same effect.

Instead of fretting, Lejuez is sanguine. He says investors can relax and watch sports this weekend.

He already has the stocks he likes for this holiday season. His top picks are Target (ticker: TGT), Five Below (FIVE), and T.J. Maxx parent TJX (TJX).

There is a theme to the selections. All are discounters. Target is, obviously a big-box retailer. Five Below sells things for, well, below $5. And T.J. Maxx is one of the original off-price retailers. That segment of the retail universe doesn’t face competition as intense as that department stores, for example, have to handle.

(And Five stores are well stocked with Frozen 2 merchandise, which won’t hurt December sales, he says.)

“And don’t forget about the week after Christmas, which is becoming more and more important according to most retailers,” adds Lejuez. Thanksgiving weekend represents approximately 10% of fourth-quarter sales—a large amount but not enough to make or break the quarter, according to the analyst.

And Black Friday sales don’t change the current reality in retail: There are good stocks in the right segments. The numbers back that up.

The three Lejuez recommends, for instance, are up almost 50% on average in 2019, far better than the comparable gains of the S&P 500 and Dow Jones Industrial Average.

Target leads the pack. Its shares are up more than 90% year to date.

Write to Al Root at allen.root@dowjones.com

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Black Friday, holiday sales surge won’t be enough for many retailers - Yahoo Finance

Black Friday and total holiday sales are on track to break records. According to Adobe Analytics online retail sales on Thursday are expected to hit $4.4 billion, up 18.9% year-over-year. 

But that spike in business won’t necessarily help those troubled retailers who are expected to close more brick and mortar stores. 

Greg Maloney, JLL Retail President and CEO, told Yahoo Finance’s The First Trade stores that have been delivering the customer what they want will continue to do well. But for those that are flailing it’s a different story. 

“What we're doing is recycling some of the retailers that aren't really doing that well,” said Maloney. “The ones that are doing well, they're opening more stores and we're getting a lot more product in there. 

BRAINTREE , MA - NOVEMBER 29: Anne Gilman, of Dracut, departs South Shore Plaza in Braintree, MA after shopping on Black Friday, Nov. 29, 2019. (Photo by Craig F. Walker/The Boston Globe via Getty Images)

Store Closures Create Opportunity

More than 7,000 retail stores have closed so far this year, according to Coresight Research. Among them KMart, Sears (SHLDQ), GNC (GNC), Walgreens (WBA) and Gap (GPS) to name a few.

When all is said and done, Coresight Research estimates 12,000-plus retail stores will be shuttered in 2019. In 2018, 5,864 retail stores closed.

The winners in this retail battle, pure play online retailers that are turning to physical stores. 

“Online pure play retailers are expected to open about 850 stores here in the next five years,” explained Maloney. “So we're going to see we're going to see it continue to absorb some of the square footage that these closers have produced for us.”

Many of these anchor stores are department stores like J.C. Penney (JCP) and Macy's (M) which have suggested they're looking to close more stores next year. 

“A lot of these department stores are not paying a lot of rent. There were really traffic drivers,” said Maloney. “That's why we call them anchors. So, as some of these close and we can repurpose that space into more productive, rent paying tenants, it does quite well. But there are going to be closures of additional department stores were anticipating it in 2020. We've been very resilient here in the past five years, and I think we'll do the same in the next two to three years.”

Tracey Marx Bernstein is a senior producer for Yahoo Finance’s The First Trade and YFi AM.

READ MORE:

• Black Friday 2019 Live Updates: Target says 1M more people shopped on its app this year

• Nordstrom may have finally turned the corner

• How Target is dismantling Macy's, Kohl's, J.C. Penney and Sears

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Retailers face a Thanksgiving Day decision: Open or closed? - CNN

Bolstered by low unemployment, rising wages and strong consumer confidence, retailers are preparing for a busy shopping weekend from Thanksgiving Day through Cyber Monday.

An estimated 165 million people are likely to shop over the five-day stretch, according to a survey by the lobbying group National Retail Federation and Prosper Insights & Analytics, a consulting firm.

And about a quarter of them say they will make their purchases on the holiday itself this week, up from both 2017 and 2018. "We expect the biggest increase in potential shoppers for Thanksgiving Day this year," said Phil Rist, executive vice president of strategy at Prosper Insights.

"Customers have shown that they want to shop on Thanksgiving evening," a spokesperson for Best Buy said. "We want to be there to serve those customers and need to be open for that to happen."

Shopping on the holiday has risen in recent years because so many stores are crammed with customers scrambling to take advantage of Black Friday doorbuster sales, experts say.

"There is definitely a big trend here for more people to be shopping on Thanksgiving Day," said Mark Mathews, vice president of research development at the National Retail Federation. In addition, he said, "We have seen a shift in emphasis on Black Friday to other days on that weekend."

Adding to the pressure to start early this year: There are six fewer days between Thanksgiving and Christmas on the calendar than last year. Walmart, Target, Best Buy and others kicked off their promotions before Halloween this year.

"You've got to be first to the consumer's wallet," said Michael Brown, a partner with A.T. Kearney's retail practice.

But for the army of low-wage retail workers who staff stores on Thanksgiving, the holidays can be the most grueling stretch of the year.

"America's retail workers— union and non-union —are the heart of our economy and often the unsung heroes of the holiday season," said Marc Perrone, president of the United Food and Commercial Workers International Union. Retail workers "sacrifice time away from family so that millions of Americans can spend more time with theirs."

In the past, critics have targeted retailers like Macy's and JCPenney for starting Black Friday deals on Thanksgiving Day, arguing that those companies' employees should be at home enjoying time with their families.

Some states, including Massachusetts, Maine and Rhode Island, have prohibited big-box stores from opening on Thanksgiving. A California legislator proposed a law in 2016 that would have required some companies to pay employees double for working on Thanksgiving, but it did not pass.

Over the last several years, however, public pressure on retailers to close on Thanksgiving has faded. Workers' rights groups have instead focused on bigger-picture issues such as the minimum wage, benefits and schedules.

And major retailers like Target (CBDY), Best Buy (BBY) and Macy's (M) have mostly kept the same Thanksgiving hours. They are open in the afternoon or evening and also pay their hourly employees a time-and-a-half rate for working on Thanksgiving.

"Thanksgiving is one of the most exciting days in retail and we know that many team members look forward to working on the kickoff of the holiday season," a Target spokesperson said.

A Walmart spokesperson said the company—the largest grocer in the United States— provides "an important service to customers who need a forgotten ingredient for their family gatherings or a prescription filled" on Thanksgiving.

Walmart, however, pays Thanksgiving day workers like a regular day.

Some stores do close on Thanksgiving, such as Costco, Nordstrom (JWN), Home Depot (HD) and Neiman Marcus, according to BlackFriday.com, which tracks store hours.

"As an appreciation of all the hard work our employees do over the course of the year, we have always closed on Thanksgiving to give our employees a chance to relax and enjoy time with their families," a spokesperson for Costco said.

In 2016, mall-owner CBL Properties decided to close its malls on Thanksgiving to give employees the holiday.

"The decision was met with an overwhelming positive response, which is why we have elected to continue this tradition," a spokesperson for CBL said.

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Here’s What Stores Are Open—and Closed—on Thanksgiving Day 2019 - Fortune

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