Report: Department stores need a great Black Friday
While retailers across the board are looking forward to a successful Black Friday, one group stands out.
Of all retailers, department stores might be relying the most on having a great Black Friday to match and or exceed their quarterly estimates, according to a report on the holiday retail outlook from Thomson Reuters. The report finds that about 60% of the merchandise at department stores such as Macy's and Lord & Taylor will also be on sale this year compared to last, which could further continue to hurt profits.
In other findings:
• The current average merchandise discount is 37.3% and it's been at this level for months, Thomson Reuters discovered in a collaboration with StyleSage Co.
• With the exception of the value driven retailers, there aren’t any major changes from one year ago when it comes to the average discounts, nor the discount penetration (how much of the assortment is on sale).
• Popular holiday items as sleepwear/intimates, jeans and activewear have the lowest discount levels going into the holiday weekend. This suggests that retailers are luring shoppers in with other promotions, and hoping they will pay full price for those hot holiday gift items. If they are successful, this can help improve margins.
• Fourth quarter same-store sales winners will include Ulta, which has the strongest same-store sales in our retail universe at 9.4%; Costco expected to post a 7.2%; and Home Depot expected to register a 6.3% increase. Lululemon has a healthy 4.4% comp estimate.