Retailers Desperately Seeking Sales
Is this a sign of desperation? Toys R Us will be running a shopping marathon, keeping its doors open for 87 hours straight leading up to Christmas Day.
It marks the fourth consecutive year the toy store will be offering 'round-the-clock shopping, and, like last year, when Macy's pulled a similar stunt (but limited it to just 48 consecutive hours), Toys R Us won't be alone. It will also be joined this time by Kohl's , which announced earlier this month it was going to stay open for 100 consecutive hours. It opened its doors at 6 a.m. today and, for the first time ever, will not close them until 6 p.m. on Christmas Eve -- actually more than 100 hours.
It seems clearer than ever that, this Christmas season, retailers aren't just worried about their results, they're flat-out terrified that the bottom will be dropping out of sales. Now they're doing everything they can to reverse the trend.
Just as a few retailers had previously dipped their toes in the waters of opening on Thanksgiving Day, only to see a pell-mell rush this year by rivals to join them -- and both Sears Holdings' Kmart division and Big Lots opened early on Thanksgiving, not shutting their doors until 41 hours later -- with less than a week left till Christmas, we might see more stores doing the 'round-the-clock routine, too.
Some retailers like Wal-Mart already operate on a 24-hour basis at some of their supercenters, so this wouldn't mean a change for them, but Macy's just said that it will reprise its role from last year and keep select stores open again for 107 straight hours.
In the context of a calendar-shortened shopping season -- there are six fewer days this year than last between Black Friday and Christmas -- it smacks of real fear, and this year, there is no novelty to anything the retailers are doing. If one says it's doing something, everyone else joins in.
Worse for them (and investors) is that they'll also continue to be just as promotional as they have been all season long. Wal-Mart, for example, tried to juice sales by offering its Black Friday sales a week before Black Friday, and running sales all week long, and then some. While there was a bit of a hubbub made about the Christmas discounts not being so significant because retailers raised prices ahead of the sales to make the discounts appear more dramatic, it's still going to impact margins.
After bitter-cold temperatures and snow hit the Midwest and Northeast this month, ShopperTrak says retail in-store shopper traffic fell 20% last week compared to the same time period in 2012. That alone may force the hands of retailers to join the fray, but also cause them to panic and offer even deeper discounts as the never-ending, everlasting Christmas shopping season draws to a close.
With all this selling, promotion, and discounting going on, I'm not sure I'd want to find a retailer in my portfolio when it comes time to report these seasonal results.
A not-so-merry jingle
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