Black Friday is Back!
Well, another Black Friday has come and gone. And, much to the surprise of many (myself included), it did so with a bang. General consensus is that the Black Friday sales bonanza was a rousing success, and the numbers certainly support that: ShopperTrak reported that Black Friday sales increased 6.6% over the 2010 numbers, with a record-breaking $11.4 billion in purchases. More people were out and about — foot traffic reports show an increase of about 5% over last year, which is good news for the brick and mortar guys. While I agree that there are lots of reasons to be optimistic about these results, I don’t think it will necessarily translate into a blockbuster holiday season overall.
Behind the raw numbers, what was interesting to me was how the extended hours really did seem to drive up sales. As you know, I didn’t think retailers opening on Thanksgiving night would mean more sales. I simply thought it would mean the sales would be spread out over more hours. But, I think the commitment retailers showed in marketing and advertising their extended hours really worked! Given its success, I think we’ll see this become the new normal going forward.
I did venture out myself — as I often do — to observe the crowds and see what was happening. I was not out and about at midnight, but, from what I gathered by talking to store personnel, the heaviest traffic seemed to hit in three distinct waves: The first being at midnight on Thanksgiving night, the next at 9:00 a.m. on Black Friday morning, and another big burst Black Friday evening. That was interesting to me. It would seem that retailers were successful in their efforts to expand the shopping windows of opportunity.
One thing I saw this year that I believe helped drive the numbers, was more people shopping for themselves. This used to be common when consumers had more discretionary funds. Thanks to the downturn, we haven’t seen this in recent years. I think the fact that we’re starting to see it again now, is a good sign. Another good sign was the raw retail magnetism of electronics. This phenomenon continues to blow me away. On my Black Friday adventure, I stopped in at the local Target and found that their electronics department was packed with people even when the rest of the store was experiencing quiet lulls. And it wasn’t just packed with teenagers scouring for the latest tech toys. From TVs to gaming systems, electronics have really become popular gifts for the whole family. I think it’s also worth noting that Cyber Monday sales continue to grow: overall, online sales were up by about 12% and continue to grow.
What I think has gone a bit unnoticed in all of the hoopla is the fact that retailers have done a great job consolidating store locations, modifying store sizes and controlling their inventories. They’ve done what they needed to do, and as a result, enjoyed a record-setting performance on one of the most important shopping days of the year.
Factoring all of this in, I’m comfortable tweaking my holiday shopping prediction: Originally, I said we’d see a flat to 2% gain this year (and, honestly, I was leaning more toward flat). I wasn’t quite as optimistic as some of the other retail analysts, but I’m thinking we may be closer to that 2% mark. That said, I think it’s still too early to get that excited. We have to remember, because of the early start to the season, we likely will not see the kind of sustained performance we would need to make this a truly great holiday shopping season. And, too, we all know that a great Black Friday does not automatically mean a record-breaking holiday season overall. With October and November sales coming in fairly high, it is likely we’ll see December sales that are not. As always, it will be interesting to see just how this holiday season plays out.
What do you think? Please make a public comment below or feel free to e-mail me privately at [email protected].
Jeff Green is president and CEO of Phoenix-based Jeff Green Partners (jeffgreenpartners.com), a leading consulting firm specializing in retail real estate feasibility, retail expansion planning, medical retail planning, location analysis and commercial land use.
Click here for past columns by Jeff Green.
Food Lion offers loyalty members holiday guide
SALISBURY, N.C. — Food Lion announced that it will now offer its MVP customers copies of Southern Living magazine guide for the holidays.
Customers may take advantage of the colorful guide by presenting their MVP card to the cashier at checkout. Shoppers also must spend at least $35 and purchase one Kraft Foods or ConAgra Foods product. These products are easily identifiable with specially-marked tags throughout the store. Customers can get their guide at the Southern Livingholiday chimney display located near the front of each Food Lion store.
The holiday guide, which will be available through Dec. 27 , is entitled, "Our Best Holiday Desserts." This 48-page publication includes recipes and tips for the holidays. The guide also includes special Food Lion coupons.
The holiday recipe and tips guide is available at all Food Lion locations while supplies last. Customers are limited to one guide per shopping visit. For more information about the holiday promotion, go to www.foodlion.com.
PacSun loss widens in Q3 loss; to close up to 200 stores
Anaheim, Calif. — Pacific Sunwear of California Inc. reported Wednesday that losses widened in the third quarter to $17.6 million, from $7.1 million a year earlier. The decline was due in large part to charges associated with store closures.
In a move to improve its position, the teen retailer also announced plans to close up to 200 underperforming stores over the next 14 months and said that it secured two multimillion-dollar loans. PacSun received a $60 million loan from Golden Gate Capital for two board seats and the right to buy a 20% stake in the company. It has also secured a five-year, $100 million revolver from Wells Fargo to replace an existing line.
"The combination of these transactions greatly enhances our financial and operating position, and is another critical step forward as we work to re-establish PacSun as a leading specialty retailer across the U.S.," president and CEO Gary H. Schoenfeld said in a statement.
The closures will allow PacSun to turn its full focus to the remaining 550 to 600 store locations. PacSun has agreed with landlords to buy out about 75 leases for a combined $13 million, and has negotiated short-term extensions for about 50. Leases for 115 stores are set to expire at the end of 2012.
Revenue declined in the period to $242 million from $257.9 million last year, beating Wall Street’s expected $233.2 million in sales. Same-store sales fell 3%.