Penney: Later Opening Cost Black Friday Sales

Discussion
Dec 02, 2011
George Anderson

J.C. Penney is blaming its decision to open later than some competitors on Black Friday as a factor in the chain’s same-store sales decline in November.

According to a statement by the company, its same-store numbers were tracking ahead of the prior year leading up to the holiday weekend. But "its decision to respect Thanksgiving Day for families and open at 4 a.m. on Friday, as it had in prior years, adversely impacted Black Friday sales. Sales remained soft in-store throughout the holiday weekend."

The retailer’s online sales fared better with site traffic up 12 percent for the holiday weekend. Items ordered over the Black Friday weekend are included in the chain’s December numbers as a result of product shipping dates.

Ken Perkins, president of Retail Metrics, told Bloomberg News that a late opening did put them behind competitors that got an earlier start.

"They missed out," Mr. Perkins said.

Earlier openings, according to various reports, were not necessarily an indicator of success for the traditional start of the holiday selling season. Others, including Gap, which opened stores on Thanksgiving, and Target, which opened at midnight on Black Friday, came in below expectations.

Discussion Questions: Do you think stores that opened later on the Black Friday weekend were at a competitive disadvantage? Will we see chains such as J.C. Penney opening earlier in coming holidays as a result of this year’s performance?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

14 Comments on "Penney: Later Opening Cost Black Friday Sales"


Sort by:   newest | oldest | most voted
Dick Seesel
Guest
9 years 5 months ago

It would be hard for the new management team at JCPenney to ignore what the rest of its competitors will be likely to do in 2012…namely, repeat their early openings. Even the stores with disappointing results for the full month of November said that their Black Friday business was strong, in part due to the change in opening hours. However, JCP has underlying problems with branding and content that wouldn’t have been fixed in an extra four hours.

(Not to be cynical, but it’s also a way for the new JCP team to drive comp sales — and take credit for it — by correcting a mistake that they made in 2011.)

The bigger concern in yesterday’s numbers is the number of chains “in the middle” whose results disappointed. The biggest share gainers seem to be higher-end stores (Macy’s and Nordstrom)…or warehouse clubs and off-pricers at the other end. The market-share losers may need to sharpen their value or trend message instead of trying to do both.

Gene Hoffman
Guest
Gene Hoffman
9 years 5 months ago

Black Friday customers were in other stores purchasing items when J.C. Penney still hadn’t opened. Many of those who purchased items might have bought at Penney. When Penney did open, much of the bloom was almost off the rose.

Tardy has no wings or cash rings in today’s retailing. Next holiday expect J.C. Penney to open earlier.

George Whalin
Guest
George Whalin
9 years 5 months ago

While one weekend doesn’t represent the whole month, I do believe it was a mistake for J.C. Penney and some other retailers to open later on Black Friday. I started visiting stores beginning at 9:00 p.m on Thanksgiving Day and the stores were packed with shoppers. As more stores opened at Midnight there were large lines and a significant number of shoppers throughout the night. One of the most important characteristics of the shoppers was the large number of younger people in groups of 3 to 5. This shopping time will become an important part of the holiday season.

Ryan Mathews
Guest
9 years 5 months ago

I don’t think that was JCP’s problem.

If they had had the right offers they would have had shoppers. Sure they missed those loonies who were stumbling through the malls at 3:00 a.m. like a legion of zombie consumers waiting to tear the flesh off hyper-discounts, and apparently each other, but if they had built a better mousetrap they would have had improved sales.

There’s also an element of irony here. Since they had past years’ experience to inform them, the 4:00 a.m. opening — still Zombie Time in my book — either didn’t hurt them in years past or they didn’t care about those lost sales. If the former is true, something besides this year’s hours negatively impacted them. If the latter is true, why complain?

I hate to apply logic to a press statement but there it is.

David Slavick
Guest
David Slavick
9 years 5 months ago

Follow the trend. No surprise that an attributable factor was when the store opened, but I seriously doubt it was THE key reason why weekend sales were not up to expectations. All the spend leading up to the opening in TV, radio, newspaper, direct mail, credit card communications and because they opened a few hours later than Walmart or Target and results were less than stellar? I’m skeptical. Nevertheless, the proverbial genie is out of the bottle and everyone will be drinking the “early” opening tactic which basically is stay open 24/7, regardless of the day of week or holiday.

Paula Rosenblum
Guest
9 years 5 months ago

“They missed out”??? Seriously?

November is not a huge sales month…but obviously Black Friday gooses the number. However, the important question is not “How did November go?” – it’s “How did the holiday season go?”

All the Black Friday hoopla does is move sales around. I stand with my statements earlier…it is WAY too soon to tell.

Ted Hurlbut
Guest
Ted Hurlbut
9 years 5 months ago

Could Penney’s decision on Black Friday opening have impacted same-store sales? Sure. But how did it impact four-wall profitability? It may be that profitability was impacted, but that’s the key metric, not same-store sales.

Did Penney’s miss out, as Mr. Perkins claimed? He doesn’t know, because he doesn’t have the correct metric for determining that.

Camille P. Schuster, PhD.
Guest
9 years 5 months ago

Sales of JCP’s stores were down over the holiday weekend, online sales were up, the online sales do not count as part of Black Friday weekend sales. If the online sales were up and not included then why is JCP claiming that the is weekend sales were down?

In-store sales were down. It seems to me that the the blame can not be placed on the opening time. If consumers really wanted to take advantage of great doorbuster sales they would have been happy with the 4 am time and would have flocked to the store. By 4 am the shoppers would have finished their purchases at the stores opening at 10 pm and the ones opening at midnight and would be ready to move on to the good deals at 4 am. Maybe shoppers were tired and went home to order online.

Unless management does a better job of analyzing their data, their strategies going forward will not put them in a good competitive position.

James Tenser
Guest
9 years 5 months ago

JCP may well be overstating the impact of opening time on its weekend performance. If the shopping public is unenthusiastic about your deals, offering them a few hours earlier is not going to move the needle very much.

Opening at midnight, however, eliminates one variable that may be used after the fact to explain soft performance. With so much scrutiny, it is becoming almost impossible for retailers to dismiss this tactic, effective or not.

Like some others here, I suspect that Black Friday midnight madness attracts more publicity than profits. For every frenzied deal-hunter camping out in a store parking lot, there are ten others at home who wonder why anyone would bother?

Brian Kelly
Guest
9 years 5 months ago

Yes, those stores with an aggressive and seasonally distorted sales target for Black Friday weekend were disadvantaged if they opened later on Black Friday.

Maybe, I think it is sales displacement over the balance of the Holiday selling season. Sales and productivity analyses need to be completed for wise retailers. But such a lame excuse from the new JCP leadership? Meet the new boss; same as the old boss?

Or as we like to say, “Retail ain’t for sissies.”

Craig Sundstrom
Guest
9 years 5 months ago

Let me get this straight: we’re criticizing someone for opening up “late” because they opened at 4 o’clock IN THE MORNING?!?! It’s what Paula said (and Ted, and Camille, and…): we frequently criticize retailers for listening too much to Wall Street, and not showing enough long-range thinking, and then we offer up our own micro-managing based on an inanity like this.

jeff Edelman
Guest
jeff Edelman
9 years 5 months ago

Penney was at a competitive disadvantage, losing a lot of the early traffic. We are likely to see more early openings next year, which will force many other stores to follow suit. It is questionable whether these will drive higher spending for the season, however, the additional sales for each retailer open the additional hours will hopefully more than offset the incremental costs and margin loss. The jury is still out.

Jinida Doba
Guest
Jinida Doba
9 years 5 months ago

JCP shouldn’t have been at a “competitive disadvantage” — had the chain capitalized on the competitive ADVANTAGE of good old-fashioned PR. Why not promote in its marketing messages the goodwill it’s fosterng during the holiday season by showing the world it values its employees’ AND customers’ need to spend time with their families on Thanksgiving instead of dashing away from the table to stand in line at some big-box store?

If you think it wouldn’t have worked, I have two words for you (or is it one?): “SWIFT BOAT.” A convincing campaign from basically nothing that caved an entire presidential campaign.

Tim Callan
Guest
Tim Callan
9 years 3 months ago

My firm conducted a detailed analysis of traffic and conversion over the course of the Black Friday weekend based on the extensive data our systems collect in more than forty retail chains throughout the US. We found that while extended hours did have some positive effect in destination anchor stores, for the most part retailers simply had to stay open longer and absorb more costs while stretching the same amount of actual business across more hours. Many specialty retailers in particular felt they had no choice but to stay open if the anchors in their mall or shopping area were open. Their traffic was higher, but lower conversion rates meant that the actual sales at the register did not reward this additional expense.

Some of the main takeaways are quoted in our early December press release.

wpDiscuz

Take Our Instant Poll

How much of a competitive advantage did companies gain as a result of earlier store openings to start the Thanksgiving Day weekend?

View Results

Loading ... Loading ...