Blog

Opening Later Need Not Mean Greater Sales – Lessons From Across the Pond


Spurred on by increasing competition (particularly from the growing online retail sector), many of America’s largest retailers increased their opening hours this Thanksgiving in an effort to try to maximise returns in the lucrative frenzy of the holiday period.

 

Almost all of these major retailers which includes Target, Walmart and Best Buy have, in recent years, extended their shopping hours, increasingly opening earlier and closing later on ‘Black Friday’ (the unofficial opening day of Christmas shopping season following Thanksgiving) and even opening in the evening of Thanksgiving itself now known as ‘Gray Thursday’.

Thanksgiving is an important national holiday for the US and one that has traditionally been about families staying at home and spending time together. Major retailers decision therefore to increase store opening hours and encroach on the holiday has become a matter of some contention.  Petitions calling for the end of extended hours have received hundreds of thousands of signatures.

Sales figures in the United States which have been released in the wake of Black Friday, suggest it is difficult to see how extended shopping hours have helped increase retailers profits.  Whilst profits are up from 2011, this is more likely due to a renewed confidence in the US economy by consumers rather than the extended amount of hours for shoppers to spend their income.

Marshal Cohen, a retail analyst for NPD Group explains, “Just because they extended hours doesn’t mean shoppers have more relatives to buy for and more money to spend.”

Research from retail technology group Shoppertrak would appear to support this point, showing that more consumers shopped on ‘Gray Thursday’ to the detriment of total sales on Black Friday itself.

This sentiment and research seems to support the reaction to extended Sunday trading hours in the UK during the Olympic and Paralympic Games this summer.  There was a decrease of sales during the period and the policy was criticised by many retailers and shoppers alike.

Interestingly, last week Dalton Phillips and Andy Clarke, the Chief Executives of Morrisons and Asda respectively, jointly wrote to the UK’s Business Minister Michael Fallon asking for an extension to Sunday trading on the 23rd December.  Although the Government acknowledges that a letter was received, a spokesperson from the Department of Business Innovation & Skills stated they had no intensions to change the current trading hours.

No matter which side of the pond the shops are on that you choose to visit, it still boils down to consumer confidence and disposable income.

Positively, 2012 looks set to out perform 2011 in Christmas sales, but with online retailers playing such a big part and investment growing in logistics operators (speeding up home delivery time), physical shops will still feel the chill of the recession as accelerated adoption of online shopping takes hold.

Paul Lloyd, Junior Account Executive

Go back to category