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It’s time to holiday shop.
Black Friday officially kicks off on Thanksgiving Day, with retailers from J.C. Penney to Best Buy swinging open their doors early to capture deal-seeking consumers. And this year has the setup to be especially merry for many retailers. Unemployment is at 50-year lows, wages are on the rise and major stock market indices are up over 20% on the year.
The only wildcard: how turbulent winter weather in parts of the West Coast and Northeast impact the travel decisions of shoppers.
10:30 a.m. Mixed action in retail stocks
Is anyone going to the stores on Black Friday? The online sales data continues to impress.
As of 9:00 a.m. ET, online sales on Black Friday are up 19.2% from the prior year to $600 million, according to Adobe Analytics. The day is on track to reach $7.4 billion in sales. Abobe also confirmed Thanksgiving Day broke the $4 billion sales mark online for the first time. Sales on turkey day gained 14.5% year-over-year.
Adobe says the full holiday shopping season could see online sales growth of 14.9% from a year ago.
Meanwhile, the market is having a tough time if the strength online to kick off Black Friday is good or not so good. Online sales tend to be less profitable for retailers than those made in the store. Shares of Best Buy, Walmart, Target and Amazon swung between minor gains and losses in early trading activity.
One loser in the session has been Abercrombie & Fitch (-4%).
8:30 a.m. ET More sales data to digest
It has been a digital holiday shopping season thus far.
Thanksgiving Day sales online in the U.S. rose 17% to $4.1 billion, according to Salesforce.
5:50 a.m. ET on Black Friday
Statements from Walmart and Target post Thanksgiving Day are out. They aren’t totally helpful to investors, but this is a blog so we’ll post the most interesting takeaways.
Target says “one million” more people shopped on the Target app versus last year. Hot-selling items included Apple iPads, Apple Watch and Beats headphones (also owned by Apple).
“Millions of customers joined us online and in stores across the country for our Black Friday event,” said Walmart U.S. chief merchant Steve Bratspies in a blog post.
Thanksgiving Day: Nov. 28
6:00 p.m. ET Big day for online shopping continues
Online sales strengthened throughout Thanksgiving Day, echoing my observations made below on less than stellar store traffic.
Shoppers spent $2.1 billion online as of 5 p.m. ET, up 20.2% year over year, according to Adobe Analytics. Spending is expected to surpass $4 billion on Thanksgiving Day for the first time.
All in all, what we are witnessing thus far is indicative of the healthy financial position many consumers find themselves in this year.
Time for a shout out
There is a side story to walking around the malls and stores on Black Friday. It’s a great time to see who in retail is trying new things and if they make sense. This is supposed to be the busiest time of the year for retail, and experimenting a bit amidst high levels of traffic is welcomed.
Shout out to American Eagle Outfitters. A newly remodeled location I visited not only had revamped floors, tables and lighting — making it feel like a hipper place — but they installed a denim customization shop at the front of the store. Nice win here, none of the company’s teen apparel rivals have one of these in their stores.
The company has been one of the better performing mall retailers these past two years. Staying on the pulse of the shopper is why, so I am not surprised by this new denim service.
Customization is in when it comes to apparel, or so this aging millennial has been told.
5:00 p.m. ET Let the games begin
Please do tweet @BrianSozzi with photos if you are in the malls this evening. I have to say that at the two malls I have hit at around the time of their openings, the traffic feels lower versus last year. And to me, traffic a year ago on Thanksgiving Day wasn’t anything to write home about.
It’s clear that same-day delivery services have sucked the thrill out of Black Friday shopping. Ditto to the traffic.
FYI, Macy’s is super promotional from the get go.
This #BlackFriday begins with empty malls because you have spent your entire budget online using same day delivery from Target, Walmart or Amazon instead of only blowing 50% of your budget online last year and the other 50% in stores. $AMZN$TGT$WMT pic.twitter.com/49PMq0qF8n— Brian Sozzi (@BrianSozzi) November 28, 2019
2:00 p.m. ET J.C. Penney greets shoppers
I have been to each one of J.C. Penney’s early Thanksgiving Day openings — that was a tradition started with former CEO Marvin Ellison (now Lowe’s CEO) back in 2014 via a 5:00 p.m. ET opening. Every time the crowds have snaked around the store, and today’s opening was no different.
But in general, I was letdown by the crowd size this time compared to a year ago. Another potential red flag for investors in J.C. Penney is that the company looked more promotional on apparel staples (coats) and housewares. Apparel inventory seemed high likely due to the continued delay in cold weather.
Also worth mentioning is the unproductive floor space at J.C. Penney now that it no longer sells appliances. To be sure, CEO Jill Soltau has her work cut out for her to improve sales per square foot at stores that remain way too big.
See various posts below.
JC Penney stopped selling appliances earlier this year. In its place, they have filled up 25% of the second floor with luggage and 12 bed floor models. Can’t make this up. 😂 #BlackFriday $JCP pic.twitter.com/cR325S9tk5— Brian Sozzi (@BrianSozzi) November 28, 2019
Right now, we’re outside #JcPenney in the freezing cold. Once we got our coupons, we got back into the car waiting for the store to open at 2:00PM. #DogThanking #Thanksgiving #ThanksgivingShopping #BlackFriday pic.twitter.com/pI64pw0DDp— Ms. Pinky Stanseski (@undergradwoman) November 28, 2019
11:00 a.m. ET Dueling online sales data
Investors are usually hit with a ton of third-party sales data on the week of Black Friday to dissect. This one is no different.
New research out of Salesforce shows that digital sales for the Tuesday and Wednesday ahead of Thanksgiving rose 9% to $4.9 billion. Salesforce projects digital sales on Thanksgiving will gain 17% to $4.1 billion.
The numbers here aren’t as robust as those from Adobe Analytics. But they still paint a picture of a U.S. consumer out there spending nicely on deals across electronics, toys, apparel, etc.
10:00 a.m. ET Online sales start hot
The first batch of online sales data for Thanksgiving is in, and it looks pretty appetizing.
Through 10 a.m. ET, online sales have increased 14.5% from the prior year to $470 million according to Adobe Analytics.
Adobe Analytics estimates today’s online sales will grow 14.5% year-over-year to $4.2 billion. The day before Thanksgiving saw online sales surge 22% from last year.
“The strong online sales performance to-date suggests that holiday shopping starts much earlier than ever before. Steep discounts on popular items like computers on the day before Thanksgiving indicate that many of the season’s best deals are already up for grabs. This has led to significant growth in online sales (16.1% YoY increase) so far. What will be important for retailers to track is whether the early discounts will drive continued retail growth overall, or if they have induced consumers to spend their holiday budgets earlier, said Jason Woosley, vice president of commerce product & platform at Adobe.
9:00 a.m. ET Surrounded by retail apocalypse
Four store visits — three Walmarts and one beat-up Kmart — in the books in the Long Island, N.Y. area. The crowds are always non-existent before noon on Thanksgiving Day. Those who are out (besides my crazy self) are shopping for last-minute food for the holiday dinner table. So, no real clues just yet on how the holiday shopping season will begin for retailers in their stores, way too early.
But what has struck me in driving around is another year of retail death. Stores going out of business. Entire shopping centers dark, empty and haunting. To those who say the retail apocalypse is over, I say get a damn clue. With Amazon, Walmart and Target leading the way on same-day delivery for online orders I think investors in mall real estate investment trusts (REITs) and well-known retailers not named Amazon, Walmart and Target will be shocked by the number of store closures over the next few years. As those stores close, retailers essentially cede ground to the strong — in this case Amazon, Walmart and Target — and feel that lost market share in their same-store sales and profit margin metrics.
Then their stock prices.
Here’s a not so fun holiday fun fact. More than 7,000 retail stores have closed so far this year, according to Coresight Research. When all is said and done, Coresight Research estimates 12,000-plus retail stores will be shuttered in 2019.
In 2018, 5,864 retail stores closed.