Electronics retailer hhgregg is hardly the only retailer reporting that this year it would stay closed on Thanksgiving Day. Some 42 and counting retailers have also opted to stay closed, according to the BestBlackFriday blog, to say nothing of the 100 or so malls that will be shuttered.
But the electronics retailer has been the most honest about its motives and the value of remaining open on Thanksgiving Day. CEO Bob Riesbeck told The AP that while Black Friday remains its biggest sales day, hhgregg's Thanksgiving business has actually declined over the last two years, he said.
It is not just individual retailers -- a list that includes Costco, Home Depot, Office Depot, OfficeMax, and REI -- that are staying closed on the holiday. Entire malls are as well. CBL & Assoc., which owns 89 regional shopping centers, announced last week that 73 of its regional shopping centers will stay dark on Thanksgiving Day. So will the Mall of America, owned by Canada’s Triple Five Group.
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Thanksgiving Day's Lackluster Performance
As a retail trend, opening on Thanksgiving Day is fairly new, although it became quickly and widely entrenched. It started around 2011 when several large stores began opening for Black Friday on midnight. Then in 2012, Wal-Mart opened its stores at 8 p.m. on Thanksgiving Day.
But the actual track record for retail sales on this day has been unimpressive and last year Thanksgiving Day's performance was downright dismal. ShopperTrak reported that in-store Thanksgiving Day sales dropped by an estimated 12.5%, while Black Friday sales fell by an estimated 11.9%.
Online Sales And Sofa Surfing
Of course you know which data set is coming next: the growth of online sales during this same time period.
And indeed, RetailNext reported that brick-and-mortar traffic was down by 5.1% from Thanksgiving Day through Sunday while IBM reported that online retail sales for Black Friday 2015 were up by 21.5% year-over-year. Various stats further break down this trend: mobile phone users are more inclined to browse from their devices, usually sacked out on the sofa, while more of the purchases, especially the big ticket items, are done from tablets and desktops. But taken as a whole, e-commerce is undoubtedly having an impact on brick-and-mortar holiday sales.
NRF, to throw some more numbers at you, reported that 42% of adults said they were as likely to shop online on Thanksgiving weekend as they were to shop in stores (41.6%).
Labor Gets Competitive
But back to Riesbeck and the CEOs of all the other retailers and shopping center landlords. They all cite their employees and their employees’ families as the reason for ending this particular practice. For some it was hard to hid guffaws about these suddenly sentimental employers, but as it happens retailers are more inclined to treat their employees a bit better this year: demand for workers has become very strong. In general, employment has been rising steadily and in just about every industry the labor market is on the verge of getting uncomfortably tight. In some sectors, like construction, it is already past that point.
In September, US retailers added 10,000 new jobs compared to the previous month bringing the industry to an additional 194,000 positions compared to a year ago, according to National Retail Federation data.
This is not to say it is a worker’s market for retail now. This is also not to say, incidentally, that retail is done with the Thanksgiving Day experiment. Most Big Box and department stores will be opening for the day and in the case of Macy’s, it will not only be open but will be opening earlier than usual, according to the blog BestBlackFriday.
What I am saying is that with holiday sales trends in flux and with the workforce becoming more competitive, for some retailers opening on Thanksgiving does not make sense. This year.
