Midnight openings grow, but not all retail on board
By Nicole Maestri
Fri Nov 9, 2007
Mall operators are betting the early bird gets the worm during this year's Thanksgiving holiday shopping weekend.
More shopping malls plan to open at midnight on Thanksgiving night, holding events like "Merry Midnight Madness," to kick off the competitive three-day holiday shopping weekend.
In an extreme example, Fashion Outlets of Las Vegas said its 100 designer outlet stores will be open on Thanksgiving Day from 10 a.m. to 6 p.m.
But not everyone is jumping on the open-early bandwagon.
The Friday after Thanksgiving, Wal-Mart Stores Inc will open the doors at its discount stores that are not open 24 hours a day at 5 a.m. -- the same as last year.
Circuit City Stores Inc will also open its stores at 5 a.m., the same time as it did a year ago, while Best Buy will still open at 5 a.m. but close at 10 p.m. -- an hour earlier than last year.
"It's a long day by that time. Were we gaining enough by that last hour to justify keeping everybody there another hour?" a Best Buy spokesman said. "This year, we decided to try closing at 10 and let people go home and get some rest."
TRYING TO KICK-START SALES
The holiday season is crucial for retailers because it can account for between 25 percent and 40 percent of their annual sales. Black Friday, the day after Thanksgiving, is consider the official start of the holiday shopping season.
Retailers have started opening their doors ever earlier on Thanksgiving weekend and touting eye-popping deals to try to garner sales at the start of the holiday shopping season.
"There's this new level of frenzy associated with it, and it's turned into sport," said Candace Corlett, a principal with consulting firm WSL Strategic Retail.
This year Simon Property Group Inc will hold "Midnight Madness" events at 38 of its Chelsea Premium Outlet Centers, up from 26 a year ago. Tanger Factory Outlet Centers will also host midnight events at 22 of its shopping centers, compared with eight a year ago.
General Growth Properties will open 12 of its malls at midnight this year, up from seven a year ago.
Wally Brewster, senior vice president of marketing and communications for General Growth, said more malls and their stores are opening a midnight because it has been shown to boost sales over the three-day holiday weekend.
"It's a bit of a 'me-too"' phenomenon, said Linda Shea, global managing director of customer strategies at Opinion Research Corp.
But she said retailers need to make sure the investment pays off, and they are not filling their stores with tired employees, who would rather be sleeping than helping customers with their holiday purchases.
"In a market where the forecasts are not great for the holiday season, I suppose the hope is, 'Well, if we just start earlier, we just let them know earlier'," we'll win sales, she said. "But all of that costs money."
BETTER SALES? WE'LL SEE
The early openings come as retailers are on pins and needles, worried that the housing market meltdown, credit crunch, and higher food and fuel prices will crimp consumer spending this holiday.
Corlett said the early openings are retailers' attempts to try to grab shoppers' dollars before their wallets slam shut or they spend their limited budgets at a competitor's store.
"There's something very serious going on here and that is this panic among everyone in the business that shoppers are going to run out of money," Corlett said.
But she said the gimmicks will not necessarily convince shoppers, who may be facing higher mortgage payments or declining home values, to accumulate more debt than they were planning this holiday.
Instead, analysts expect Thanksgiving will only mark the start of what will be a highly promotional season, and the battle among retailers to ring up sales after a lackluster autumn and eke out holiday profits will extend until Christmas Eve.
"There is virtually no momentum coming out of September and October as we head into the thick of the holiday shopping season," Retail Metrics President Ken Perkins wrote in a note. "Retailers have their work cut out for them over the next 6-8 weeks."