Every year, an increased number of stores open for “Black
Friday” shopping earlier and earlier.
It is no surprise that Wal-mart, for example, will open at 6:00pm
Thanksgiving Day. The executives of these companies believe that it is
necessary to open this early in order to match their competition and maximize
sales. Indeed, Thanksgiving Day
sales grew by $1.8 billion. Except, Black Friday sales decreased by $1.5
billion. Sales that would have
occurred on Black Friday are simply occurring a day earlier. Sales for the overall 4-day period grew
by only 1%. Since stores must pay
workers to work on Thanksgiving and incur the costs of keeping their facilities
open for longer periods, researches are finding this 1% increase in sales is
not exactly resulting in net profits.
In my opinion,
if stores are not experiencing legitimate increases in profitability, they
should return to opening on Friday morning. This way, they are not luring workers and eager shoppers
away from quality time with their families.
http://money.cnn.com/2014/11/26/news/economy/stores-open-thanksgiving-no-sales-boost/index.html?iid=HP_River
I think this a very interesting article. It seems that it is just competition between each store because they want to capture the eager consumers. It seems that there is a large number of Americans that want all the stores to open on Friday rather than Thursday but the companies are going to do what is most profitable. The numbers will be the deciding factor.
ReplyDeleteI agree with your final statement that if there is not a huge marginal increase in sales that stores should close earlier on Thanksgiving and the day before so everyone can have their much needed family time, which seems so minimal these days. The only reason stores would stay open on undesired work hours is to steal those fews consumers that happen to walk in on those days prior to Black Friday, which I personally do not think is worth the extra open hours. A 1% growth should not encourage stores to remain open and pay their workers for the extra hours because it probably costs more than the revenue they earn, leading to a negative profit.
ReplyDeleteI thought this was a very interesting article and it made quite a bit of sense. The fact that stores open one day earlier on Thanksgiving with identical or very similar sales doesn't change much in the mind of the consumers. In the end, most have a set number of dollars that they are willing to spend around this time for the sales and it doesn't matter which day they spend it on. The fact that stores open one day earlier simply means their revenue switches from one day to the other, with only a very slight increase. This is evidenced by the change in sales from 2012 to 2013. Overall, Thanksgiving sales increased by $1.8 billion and Black Friday sales decreased by $1.5 billion. With a net increase of only $300 million without accounting for higher costs for retailers (more workers, higher wages), it seems that opening stores one day earlier doesn't make that significant of a difference.
ReplyDeleteI think that as long as the growth is as low as 1%, these companies will realize that it isn't a good business idea to open so early. They are probably just getting carried away and trying to one-up the competition. It even seems that is becoming the popular thing to be closed all day Thanksgiving and not open Friday until the regular time like every other weekday, claiming this time should be spent with family and raking in goodwill toward the company. I do agree with you that it is becoming very silly that the stores are doing this but as long as people keep coming and spending money, they will keep opening early. I read somewhere that the best way to get stores to stop opening so early is to buy a bunch of stuff before Thanksgiving and then go to the store and return everything on Thursday or Friday so the store has to report it as negative revenue. I don't know the realistic application of this but it would be pretty funny if it really happened.
ReplyDeleteI recently posted a similar article about black friday starting a day or two earlier. However, this article is interesting because i thought the stores would see a great profit by offering sales a day earlier and online. But now that I'm considering employment wages, it does make sense that they may not make a great profit. I agree, if stores are not making a profit than they should stick to their original "Black Friday."
ReplyDeleteCompanies main concern is doing what is most profitable. The stores are in constant competition with each other in order to gain the most consumers. Black Friday sales are a major way to get people to shop at your store so seeing more and more stores offer Black Friday sales doesn’t surprise me.
ReplyDelete