Wal-Mart Redeems Itself in This Year’s Post-Thanksgiving Derby
By Rick Moss
“Lukewarm” was an oft-used adjective in news pieces early this weekend describing the official start of the holiday season. Mostly, those reviews were based on a report from ShopperTrak RCT Corp. which, having tracked sales at over 45,000 retail outlets, said that Black Friday numbers were largely unchanged from a year ago. The implication was one of disappointment for retailers that had engaged in especially early mark-downs and extended hours in efforts to distract consumers from thoughts of higher energy costs. (In the shoving match to be the first to open on Friday morning, Kmart even decided to begin the holiday push on Thanksgiving day.)
However, as reports filtered in from individual retailers, it seemed that the specialty mall-based stores and other non-discounters were the ones dragging the numbers down. Gap was quoted as saying store traffic “deteriorated beyond anticipated levels,” and is now predicting a weak holiday season.
Not the case outside the mall. Wal-Mart, having taken heat last year for a poor post-Thanksgiving performance, said it experienced better-than-expected sales on Friday. Obviously determined to reverse last year’s mistakes, Wal-Mart’s aggressive early season discounting, launched with a holiday ad campaign begun on November 1, may garner a 4.3 percent gain in this month’s same-store sales, according to the company.
Wal-Mart said demand overshot expectations at its namesake stores and Sam’s Club outlets, with computers and dolls among the fastest selling items.
Also reporting bigger crowds this season was Sears, and Target said performance looked about on par with last year’s strong holiday results. J.C. Penney released an optimistic assessment of the days following Thanksgiving and for the remaining holiday period, saying shoppers were snapping up apparel, accessories and home gift items at an encouraging rate.
These upbeat views from discounters were supported yesterday by a National Retail Federation’s news release (“Blockbuster Black Friday Weekend”). In celebratory tones, NRF announced “an incredible 21.9 percent increase over last year’s $22.8 billion” for Friday sales. In the survey conducted by BIGresearch, 145 million shoppers hit stores and web sites, spending $302.81 each, on average.
Another contradictory indicator to the ShopperTrak data was Visa’s report that Black Friday spending on credit and debit cards jumped 14 percent over last year, reaching $3.9 billion. In a released statement, Wayne Best, economist with Visa USA, said, “The strong spending volume Visa is experiencing, and the trends we’ve seen leading up to Thanksgiving, bode well for merchants this holiday season.”
Most reports, however, asked analysts and industry groups to comment on the ShopperTrak data, which showed that Black Friday sales had slipped 0.9 percent from a year ago to $8 billion, and most experts were quick to downplay report’s significance.
“While Black Friday is important to retailers, it’s not always the best indicator for consumer shopping patterns during the remainder of the holiday season, which should allow the retail industry to continue feeling optimistic,” said Michael Niemira, chief economist and director of research for the International Council of Shopping Centers.
Meanwhile, NRF President and CEO Tracy Mullin, warned against over-confidence. “Even though many retailers saw strong sales this past weekend, companies will not be basking in their success. Stores are already warming up for the next four weeks because the holiday season is far from over,” she said.
Moderator’s Comment: From reports you’ve seen and your own observations, what is your Monday morning quarterback assessment of this year’s post-Thanksgiving
There’s now no doubt that Wal-Mart was seriously embarrassed by last year’s poor reviews from the media and analysts, and went back on the “discounting
steroids,” disregarding any potential long-term detrimental affects. At least symbolically, they’ve regained King of the Hill status as the most aggressive holiday discounter
around (at least the press, in its tendency to paint everything in distinct black and white tones, has made that out to be the case).
Although data from ShopperTrak and others bring indications to the contrary, the TV footage and newspaper coverage of deal-crazed barbarians lined up at
the retail gates on Thursday morning, it seems, could only be good for retailers. As with the “there’s no such thing as bad publicity” rule, any excitement to get shoppers’ attention
has got to be a good thing. There’s nothing worse than a boring Black Friday. –
Rick Moss – Moderator
- Wal-Mart signals a strong holiday start – CNN/Money
- Shopping more so-so than ho-ho – Chicago Sun-Times
- Black Friday card spending jumped 14% – CNN/Money
- Blockbuster Black Friday Weekend Sees
Sales Near $28 Billion – NRF News Release