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Nov 17

Gave thanks? Now go shopping

Posted by Stephen Taub in Riskretailholiday salesCash

Stephen Taub

'Tis the season to see holiday ads.

However, this year it seems like the battle for the gift dollars started earlier than usual..

On November 5, Sears kicked off its first weekly Black Friday sale.

Many chains expanded their hours several weeks before Thanksgiving, traditionally the beginning of the late-hours season.

And this week a few major chains disclosed their Black Friday plans. Walmart said it will open at midnight of Thanksgiving day, but won't unveil its electronics deals until 5 a.m. Kohl's is opening at 3 a.m. while Toys R Us, which added hundreds of seasonal stores this year, is actually going to open up at 10 p.m. on Thanksgiving.

The goal, of course, is to get a bigger slice of the holiday shopping pie. The holiday season--defined as November and December--usually accounts for 50 percent of a retailer's full-year sales and 70 percent of its profits.

And with the economy limping toward recovery, retailers want to gain every edge they can on their competitors to squeeze out a little extra market share.

But, what will the macro implications be? Probably not much.

The National Retail Federation predicts 2010 holiday retail sales--excluding online sales--will rise 2.3 percent this year to $447.1 billion, much better than last year's 0.4 percent increase and 2008's decline.

Deloitte is forecasting a 2 percent increase in 2010 holiday sales compared with 2009.

Meanwhile, comScore said online spending should grow by at least 9 percent, twice last year's pace, according to Reuters.

All of this aggressive marketing and maneuvering, however, is an intense battle for market share. Indeed, Target predicted it will ring up its best same-store sales in three years during the holiday season, thanks in large part to its new credit card program that offers 5 percent off all purchases.

However, don't count on more aggressive marketing and additional shopping hours to boost the season's overall sales and profits beyond what Americans had been planning to spend in the first place.

So, the longer store hours may provide extra hours to existing workers and may even lead to additional seasonal hiring. But, it probably won't make much more of a difference to fourth quarter GDP than it otherwise would have.



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