Thanksgiving, Bargains, and the Dark Side of Values
Thanksgiving's true meaning is about more than an overflowing cornucopia. It's about groups of people sharing and being thankful for their blessings in life. The first Thanksgiving, lest we forget, involved Pilgrims and Native Americans sharing in a feast, prepared with their joined contributions of a bountiful harvest and successful hunting expeditions.
Today, Thanksgiving has long focused on quiet time sharing meals with families and friends. However, we've increasingly moved toward a state of affairs that has more to do with the accumulation of stuff than simply appreciating what we have.
Sadly, many public companies, investors, and regular American consumers are contributing to the dilution of this holiday.
The good, the bad, and the ugly
Thanksgiving is quickly deteriorating into another excuse for mad shopping gluttony. This trend began with major retailers opening at midnight on Black Friday. It looks like as soon as the tryptophan wears off after Thanksgiving dinner, many shoppers will don their body armor and self-defense tactics to commence fighting for rock-bottom bargains and occasionally even causing human stampedes.
Wal-Mart is the usual bogeyman for this type of holiday mayhem, but the truth is, many retailers have shared the blame over the past several years. When it comes to opening stores -- and staffing them -- on Thanksgiving Day, Sears Holdings' Kmart has been a driving force, given the retailer's ongoing struggle to survive.
Speaking of Sears' woes, Yahoo! Finance's Rick Newman expanded on the floundering retailer idea; he provided a great informational chart that segues perfectly into what we could call "Sears Syndrome." Most of the retailers that are opening on Thanksgiving Day are weak.
Take Best Buy , which recently reported scary quarterly tidings that have dashed many investors' hopes for a potential and fantasized turnaround. J.C. Penney , another sick, struggling retail stock, is also among the Thanksgiving grinches; its recent quarterly loss also didn't exactly suggest a turnaround in effect.
Thankfully, some retailers are resisting the temptation, keeping their stores locked and dark on Thanksgiving Day. Costco is one of them. Its decision is completely in keeping with an important foundation of Costco's business: positive, decent employee treatment. Costco has stood firm against many factors that investors may find perfectly reasonable, like paying fewer benefits to boost profits.
Nordstrom, known for solid practices in areas like customer service -- brand-boosting attributes -- is also closed on Thanksgiving. Investors should think long and hard about the companies that aren't contributing to a nasty race to the bottom, and focus on analyzing and even investing in the ones that are not.
Many investors defend the idea that opening on Thanksgiving has become what the market wants. Many Americans have no compunction about flooding into stores once they get bored with sitting around being thankful for things they already have (like family and friends). As the trend spreads over years' time, Thanksgiving will become just another big shopping holiday, much like, say, Presidents Day.
A National Retail Federation survey recently showed one in four people admitting that they will shop on Thanksgiving. This represents 23% of those surveyed. A hard estimate puts the actual number at 33 million people.
Maybe that's very difficult to resist for bargain-hungry Americans and investors who are hankering for immediate sales and profit growth at the expense of a future with a few meaningful, contemplative moments in the year. In addition, we already know that the holiday season is going to be tough for many retailers; surely that results in even more desperate decisions.
Rethinking value and values
Retailers opening on Thanksgiving are among the most dangerous for investors. Desperate companies represent dangerous stocks, not value plays for investors dreaming of a short-term holiday boost by grabbing dollars. Panic ploys should be negative indicators, not positive ones.
Let's try to look at "value" in a different way from what many of us are accustomed to. Sometimes strategies represented by rock-solid values -- like chilling out on Thanksgiving -- are the most effective. The strongest retailers can later make up the lost couple of bucks. Costco is one of my favorite companies because of its reputation for building long-term goodwill.
Companies that keep their values -- and again, spread goodwill, during the holidays and other times -- are simply safer companies. Principles and profits can certainly go hand in hand. Building better, more positive businesses depends on these elements. More and more investors, including myself, believe that customer goodwill, an intangible asset, is one of the most important competitive advantages a company can nurture.
Hopefully, more investors will come around to the idea that rock-bottom bargains and holiday free-for-alls are not only bad for margins, they're also bad for things like morale. (We haven't even touched upon the impact on retailer workers.)
Hopefully, American consumers will realize that if they're shopping on Thanksgiving, their dollars represent a disregard for exactly what makes holidays like Thanksgiving special. Plus, turning Thanksgiving into a consumer free-for-all doesn't even touch on the things that really make people happy. True happiness comes from the heart.
Super-strong holiday shopping stocks
To learn about two retailers with especially good prospects, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.
Check back at Fool.com for more of Alyce Lomax's columns on environmental, social, and governance issues.
The article Thanksgiving, Bargains, and the Dark Side of Values originally appeared on Fool.com.Alyce Lomax owns shares of Costco Wholesale. The Motley Fool recommends Costco Wholesale and Yahoo! and owns shares of Costco Wholesale. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.