Shop Talk

Black Friday: The Ecstasy and the Agony

The annual ritual began with all the proper signs. Shoppers lined up before midnight on Friday. Some wore pajamas, others imbibed hot coffee or alcohol. Store managers straightened rows of sweaters and blew dust mites off flat-screen TVs while their doors remained closed.       Then the rush started. There were fights over toy hamsters, a clamor for laptops under $500 and even a leather jacket or two was purchased. Retailers prayed and tried to banish the ghosts of a terrible 2008.

Traffic was strong. Americans left malls with more shopping bags in their hands than a year ago. And yet.

ShopperTrak told us today that sales were only up 0.5 percent on Black Friday. In 2008, when the banking system seemed on the verge of collapse and global recession loomed, sales rose 3 percent on Black Friday.      We know it is still early in the season. We remember from last year that it is very hard to call the holiday season. But we can’t help but wonder, what happened?

Reuters photo

Check Out Line: Holiday tips to take hit

Check out the probable lower level of tips for service providers during the holidays.Chalk up tips for cleaning people, school teachers, barbers, mail carriers and others as another probable victim of the weak U.S. economy, according to a new poll conducted by Consumer Reports magazine.  The magazine polled Americans about their tipping habits during the 2008 holidays and again in October and found 26 percent of Americans who usually tip or give a gift to a service provider said they would spend less this holiday season. Just 6 percent planed to spend more.”Families are looking for ways to balance their financial concerns with the need to thank people who have helped them during the year,” Tobie Stanger, senior editor at Consumer Reports, said in a statement. “This year, tipping is more of a challenge than ever, but CR’s survey shows that people are still trying to do it, for the most part.”The average value of tips (i.e. some were gifts instead of cash or gift cards) varied by occupation, with a cleaning person at $50, a child’s teacher and a hairdresser at $20, and a manicurist at $10, according to Consumer Reports.Some readers told the magazine they plan to still say thanks with a card or homemade gift.Also in the basket:Food the focus as Wal-Mart starts holiday givingKraft quarterly results could make a case to CadburyADM profit soars past Wall Street estimatesPolo 2nd-qtr profit tops Street viewWalgreen October sales up a bit more than expectedEnergizer quarterly profit falls(Reuters photo)

At Banana, never having to pay full price — until May 1

The retail industry  is debating what the drastic discounts that were offered during the holiday season now means for “full priced” selling in 2009.

After becoming accustomed to discounts of 50, 60 or 70 percent, will consumers tolerate paying the full amount listed on a price tag? And if so, when will that happen? And does “full price” now mean selling items for 10 percent to 20 percent below what they were sold for a year ago?

Well, at Banana Republic there will be no full-priced purchasing for select credit card holders until May 1.

The apparel retailer sent a mailer this week to holders of its “Luxe” credit card. In it, the retailer offers an additional 10 percent off any full-priced or sale item when it is charged on a Luxe credit card between Feb. 1 and April 30.

“Just a small gesture to show you how much we appreciate having you as a customer — and a reminder that we’re here for you through thick and thin,” writes Jack Calhoun, president of Banana Republic.

Looks like full price won’t be in full effect until later this spring at Banana Republic.

(Photo: Reuters)

Winds blow in retailers’ favor

This Thanksgiving shopping weekend,  the weather may be one element not giving retailers a headache.

Retailers are geared up for the crucial three-day Thanksgiving shopping weekend, and many have already slashed prices to kick-start sales and rouse wary shoppers into spending mode.

While this holiday sales season could be the worst in years as declining home values, higher food prices, a credit crunch, and rising unemployment curtail consumer spending, weather tracking firm Planalytics has some good news for retailers — it predicts that most major population centers in North America should experience favorable weather conditions during the Thanksgiving weekend. 

In addition, the current cold weather in the Midwest and East Coast have put consumers into a holiday mindset earlier than last year, Planalytics said, boosting demand for seasonal items. 

“While, for some areas, snow flurries and precipitation events are likely over the weekend, they will reinforce to consumers that the holiday season has arrived,” Planalytics stated.

There could be some ”traffic limiting” events in the Midwest and Great Lakes as weather systems resulting in a wintry mix could keep people close to home, the firm said. But it said the Southeast should experience seasonal conditions, and the eastern half of North America should anticipate strong demand for seasonal items like scarves, hats, gloves, sweaters, skiwear, soups, hot beverages, and lip care. 

Planalytics also said the overall trend in the West supports favorable demand for seasonal apparel and consumables, such as food and household cleaning products.

Friends, family and a note from the President (of Macys.com)

With retailers worried over the prospects for the holiday season (The Commerce Department said on Friday that retail sales slumped 2.8 percent in October — the largest decline since the department’s current methodology was adopted in 1992), they are expanding their definition of friends and family.

While “Friend & Family” sales used to be special events actually reserved for the friends and family members of a retailer’s employees, today it takes little more than an e-mail address to be considered a retailer’s friend.

Right now, Gap (seen in picture above) is touting its “Friend and Family” sale. The event began yesterday and offers shoppers 30 percent off in its Gap, Gap Outlet, Banana Republic, Banana Republic Factory Stores, and Old Navy stores. The sale ends Nov 16.

Meanwhile, Restoration Hardware is also holding a “Friends and Family Event” offering 20 percent off everything from Nov 13-16. Soma Intimates by Chico’s is touting 25 percent off “absolutely everything” for its friends and family this weekend.

Not to be left out, Macy’s is also trying to grab shoppers’ dollars with another special sale. In an e-mail message on Friday sent by Kent Anderson, the president of Macys.com, the retailer is offering e-mail subscribers an extra 20 percent off their next macys.com order.

“I know that choosing where to shop for what you need can be difficult, and I want you to know how much we appreciate your business,” the e-mail states.

But will these sales draw you into the stores this weekend? Or are you waiting until Black Friday to start your holiday shopping?

Expect more promos, less help this holiday

The financial crisis of the past two months has rocked retailers, and many are now planning to hire fewer seasonal workers and roll out promotions earlier than planned to try to salvage holiday sales, according to a recent survey by the Hay Group.   The human resources consulting firm conducted an informal survey in September with 20 of the top American retailers, including Best Buy, JC Penney, Costco, and Macy’s to get a glimpse into their plans for the holiday season.

The group then ran the survey again this month to find out how those plans may have changed given the recent financial crisis. Here is what the they found:    Holiday Sales  

• In September, 60% of participants were planning on an increase in sales  
• In November, 38% are expecting a decrease of 5-15% and 29% are expecting the same level of sales

Store Promotions   

• In September, 45% indicated they would run the most store promotions on Black Friday, 45% indicated they would run consistent promotions from mid-December to January, and 13% indicated they would run the most after Christmas.  
• In November, 33% indicated they’d run the most store promotions on Black Friday, and 57% indicated they’d run consistent promotions from now until New Year’s   

Staffing 

• In September, 75% were planning to hire the same number of seasonal workers 
• In November, 53% are planning to hire the same number of seasonal workers, and 26% are planning to hire 5-15% fewer workers.    

Check Out Line: Bad jobs data follows bad sales data

Check out more bad news for retailers headed into the holiday season.

On Friday, fresh data showed the U.S. economy shed 240,000 jobs in October, worse than the 200,000 decline that was forecast. The Labor Department said the national unemployment rate shot up to 6.5 percent from 6.1 percent in September — the highest since March 1994.

That disappointing report came a day after U.S. retail chains reported their worst October sales results in 35 years.

“October was a disaster of epic proportions for most of the retailing community, as continued economic negatives resulted in a ‘shopping strike’ by consumers and led to material misses by a number of key players and a decidedly more cautious outlook from virtually every player in the apparel sector,” wrote Eric Beder, a retail analyst for Brean Murray, Carret & Co.

Meanwhile, a new Consumer Reports holiday shopping poll found that 76 percent of Americans plan to cut back on spending on holiday expenses like gifts, travel, entertaining and decorations. Among the holiday spending cutbacks, 59 percent said they will be giving fewer gifts, and nearly half said they will be cutting their travel plans.

The weak reports are all darkening the outlook for holiday sales, which were never expected to be great. Now consumers can expect retailers to roll out a plethora of deals and discounts to grab whatever portion of a shopper’s wallet they can get this holiday.

On Friday, Wal-Mart’s Sams’ Club said that starting Nov. 14, non-members who sign up in any location nationwide before Nov. 26 will receive a $10 Sam’s Club gift card. The gift card is good for purchases in its clubs starting Nov. 28, the day after Thanksgiving, when Sam’s Club will open at 5 a.m. and provide a free breakfast through 8 a.m.