Yes, all retailers are feeling a bit bruised right now. Amongst the stock market meltdown, the Big 3 automakers in need of a bailout and the trickle down effect of the negative psychological condition of the consumer (job losses, deflation concerns, housing value issues), the mall seemed surreal on what is purportedly the busiest shopping day of the year in the United States.
It’s not that it wasn’t busy – it was. It’s not that people weren’t walking around with shopping bags – they were. It’s not that Santa didn’t show up – he did. And it’s not that the markdowns didn’t work – they seemed to. It was that it seemed strangely like nothing had happened outside the perimeter of the mall parking lots to disturb the activity inside the mall corridors and shops. It did seem less festive a mood, but not by much.
The real problem is it’s a bit of a snowball effect on the negative atmosphere. Once one retailer announces that they are paring back inventory and slashing prices, the dominoes start to fall. That is the nature of this business unfortunately. So, while the Thanksgiving Friday’s sales may be pretty healthy considering the doom and gloom that has been purported, the margins may have suffered big time. That is the primary concern – how much bruising did everyone’s bottom lines take? How much more can they take in case this pall lasts a little longer?
Sales were aggressive this year, but the smart retailers make them pretty aggressive every year to capture the hype and the predisposition to buying that this weekend evokes. The Thanksgiving weekend phenomenon has been receiving an increasing amount of hype over the past few years. Stores have started opening earlier and earlier (with some opening on Thanksgiving Day itself) and more and more people have been seduced into lining up throughout the night to ensure they get the best deals available.
I am all for promotions and excitement, but the caution would be how much is too much? I understand that this year may be an exception, but this issue has been a trend for years. At some point it spoils the consumer – I gather that point has been reached by now.
For now, the holiday windows are bright and cheerful (and occasionally obstructed by sale signs) and the Gap has more colour in the assortment this season, so all is right with the world.
At least they won’t be calling it “Red” Friday this year.