First State retailers seek to overcome predictions of sluggish holiday sales
Black Friday could signal a blue Christmas for retailers, as market watchers worry about excess inventory and consumers remain reluctant to part with greenbacks.
In a survey by retail research firm Conlumino, 45 percent of shoppers said they planned to spend less on Black Friday this year than last year. Only 18 percent plan to spend more, while 24 percent will spend about the same.
That said, area shoppers have more choices this year than ever, thanks to a boomlet of fresh-to-the-market merchants.
At Christiana Mall, the addition of 25 new or renovated stores this year is resonating with shoppers at the regional super center, says Steve Chambliss, general manager.
“We are having a great year,” he says. “Sales are up, traffic is up. There are a lot of reasons to come here.”
Indeed, shopping is only one attraction for consumers, according to a poll by the International Council of Shopping Centers, a New York-based trade group.
Of the consumers who head to shopping centers on Thanksgiving Day, 68 percent expect to buy gifts. Four in 10—41 percent—will eat out. And 29 percent will take in a movie. The typical Turkey Day shopper also tends to be younger, in the 18-35 age group, says ICSC spokesman Jesse Tron.
Younger consumers tend to think of holiday shopping as a social event.
“Millennials love shopping in stores and online over Thanksgiving weekend for several reasons, including the opportunities afforded to them that allow them to splurge on ‘non-gifts’ for themselves and even the potential to sleep in on Black Friday after having spent the night before bouncing from store to store,” says Pam Goodfellow, principal analyst at Prosper Insights and Analytics, a provider of business intelligence, in a statement.
“For these adults, it’s less about making room for pumpkin pie and more about going out with friends, checking out the deals through their mobile phones and experiencing retailers’ night owl hours and perhaps making a dent in their shopping lists.”
So what is at the top of shopping lists this year?
“For Black Friday, we are seeing electronics, tablets, smartphones, video games and systems,” Tron says. “If the weather turns in the Northeast we will see outer apparel do well: Gloves, hats and scarves.”
Some retailers, including Staples, Costco and the recently opened REI at Christiana Fashion Center, are keeping their doors closed on Thanksgiving. But shoppers still will have lots of options. Best Buy and Toys R Us will open at 5 p.m. JCPenney will start welcoming shoppers at 3 p.m., giving the retailer a three-hour lead on rivals Kohl’s and Macy’s.
Tanger Outlets in Rehoboth Beach is planning a retail marathon, opening at 6 p.m. on Thanksgiving and operating continuously until 10 p.m. on Black Friday. Concord Mall and Dover Mall both will open at 6 p.m. and stay open until 1 a.m. Christiana Mall will open at 6 p.m. and close at midnight, opting not to stay open around the clock this year.
“We decided we can be just as productive with less hours,” Chambliss says.
He expects jewelry, athletic footwear, women’s handbags and accessories and personal care, as in cosmetic companies, will lead gift giving.
Christiana Mall also boasts a high-volume Apple store and the techie mecca is forecasting record holiday sales based on demand for iPhones.
In addition to such new draws as Kiehl’s, a natural skin care and beauty boutique, and Fabletics, a trendy seller of activewear, Chambliss anticipates the mall will benefit from its freestanding Cabela’s and multiplex theater, in addition to traffic from Christiana Fashion Center, the mall’s recently opened neighbor.
“We’re a destination for shoppers and that benefits everyone,” he says. “There are lots of exciting options that will draw shoppers to the stores.”
Overall, while analysts expect sales to top last year’s encouraging numbers, they are forecasting less cheer for merchants.
The National Retail Federation, a Washington, D.C.-based trade group, predicts sales will increase 3.7 percent, a smaller gain than last year.
Deloitte, a consultancy, forecasts an uptick of 3.5-4 percent, compared to the 5.2-percent boost retailers enjoyed in 2014.
Analysts at Morgan Stanley expect anemic 1.2 percent growth for sellers of soft lines such as clothing and accessories, compared to a 2.8-percent increase last year.
Market watchers also are concerned that weak third-quarter sales left retailers—including such mainstays as Macy’s, Kohl’s, DSW and Dick’s—with too much inventory that might have to be cleared on the sale racks. Across the board, retailers have failed to meet sales expectations in seven of the last eight months, according to Ken Perkins of Retail Metrics.
That may be because shoppers have grown accustomed to deep discounts. Eighty percent of respondents to a recent MasterCard survey said they are more savvy shoppers than they were a few years ago; 70 percent said they get more bang for their buck than they did five years ago.
Black Friday doorbusters are priced to excite even the most seasoned of shoppers. Among the deals:
- A 55-inch TCL Roku smart TV for $348 at Walmart;, a 32-inch TCL Roku smart TV is priced at $125.
- At Best Buy, a Panasonic streaming wi-fi and Blu-Ray player is marked down from $99.99 to $39.99.
- Target is touting its lowest price ever on Beats Solo headphones, slashed from $199.99 to $96.33.
The category with the most discounts is toys with a 23-percent slice of the bargain pie, says Wallethub, an aggregator of financial information. Hot toys include LEGOs and playthings inspired by the latest Star Wars movie. Apparel and accessories are close behind with a 22-percent share.
So, how much will shoppers spend?
The NRF’s Holiday Consumer Spending Survey predicts consumers celebrating Christmas, Hanukkah and/or Kwanzaa will spend an average of $805.65 on food items, decorations, gifts and more over the holiday season. That’s $3.20 more than last year, the biggest total in the survey’s 14-year history.
“We expect consumers will tackle their holiday shopping lists with a healthy dose of optimism, tempered by a hint of caution as they look for ways to find the perfect, practical gift,” NRF CEO Matthew Shay said in a statement.