Cape Cod Mall in Hyannis in the early-morning hours of Black Friday
HYANNIS – The official start to the holiday shopping season has arrived on Cape Cod.
Shoppers lined up outside a number of local retailers late Thursday and early Friday morning looking for bargains on a wide range of items. At Best Buy in Hyannis, about 300 people were in line when the doors opened.
“Everything was neat and orderly and there were no problems,” said Barnstable Police Officer Jack Corbett, who works the Black Friday retail shift every year.
But shortly after the initial doorbusters were done, some of the brick-and-mortar stores did not appear as busy as they had been in years past.
Gabe Roderick, who has worked at Best Buy for the last four years and has worked at the mall for the last eight holiday seasons, described this Black Friday as the “quietest” he’s experienced in retail.
“All of our deals started yesterday with free shipping to your house, so I bet a lot of people just did that,” Roderick said.
Many who did head out to the stores overnight were looking for deals on big-ticket electronic items. The first 25 people who walked into the Hyannis Best Buy bought the same 50-inch TV that was on sale for $179, according to Roderick.
Despite the increase in online shopping, the state’s retail stores are optimistic about the holiday shopping season.
The Retailers Association of Massachusetts notes that consumer confidence remains high and this year’s calendar offers five full weekends between Thanksgiving and Christmas. There were only four last year, when brick and mortar stores reported a 1 percent drop in holiday sales from the previous year.
The group is forecasting a 3.1 percent increase in sales this holiday season, while cautioning that margins and profits could be tighter.
The overall U.S. forecast from the National Retail Federation projects increased sales of 3.6 to 4 percent.
IMAGE DISTRIBUTED FOR WALMART – Customers save big and check out at Walmart’s Black Friday event on Thursday, Nov. 23, 2017 in Bentonville, Ark. (Gunnar Rathbun/AP Images for Walmart)
Despite an uptick in the overall forecast, this could be a make-or-break holiday shopping season for some of America’s retailers.
Economic conditions are good — unemployment is the lowest it’s been in 17 years, and credit is cheap and easily available. And shoppers are expected to spend more than ever before.
The question is where they’ll do that.
A survey by the National Retail Federation found that 59% of shoppers plan to shop online this year, marking the first time that online is the most popular choice for shoppers. For the first time ever, more people say they plan to shop online than in big box stores such as Walmart and Target.
“The holiday season is always important, but this year is more important than ever,” said Robert Schulz, the chief credit analyst for the retail sector for Standard & Poors.
He expects strong spending this holiday season but cautions that won’t necessarily translate into good news for brick-and-mortar retailers.
“Department stores are struggling to prove they are still relevant,” he said.
A record number of store closures — 6,735 — have already been announced this year. That’s more than triple the tally for 2016, according to Fung Global Retail and Technology, a retail think tank.
And there have been 620 bankruptcies in the sector so far this year, according to BankruptcyData.com, up 31% from the same period last year. Prominent names such as Toys R Us, Gymboree, Payless Shoes and RadioShack have all filed this year, and Sears Holdings, which owns both the iconic Sears and Kmart chains, has warned there is “substantial doubt” it can remain in business.
Even if all the troubled retail brands make it to the 2018 holiday season, there’s a good chance many of their stores won’t. Store closings will rise next year to about 9,000 as retailers shift their investment to online, says Michael Dart, a retail expert at A.T. Kearney,
A man waits to check out as he shops a Black Friday sale at a Best Buy store on Thanksgiving Day, Thursday, Nov. 23, 2017, in Overland Park, Kan. Shoppers are hitting the stores on Thanksgiving as retailers under pressure look for ways to poach shoppers from their rivals. (AP Photo/Charlie Riedel)
“Even those retailers who have survived reasonably well are rationalizing their cost structure and closing stores,” he said.
The fact is that this retail apocalypse is happening with a strong economy. Some experts say that if the economy encounters even a minor bump in the road, things could quickly go from bad to worse for those struggling retailers.
“We’re in a period where there is some breathing room for certain players that a more difficult economy will expose,” said Leon Nicholas, analyst for Kantar Retail. “Any kind of economic downturn or even a tick up in interest rates, and their debt becomes unsustainable.”
Groups representing retailers say most of their members are making the changes they need to survive long term.
“There’s no question the retail industry is going through an amazing transformation,” said Ellen Davis, senior vice president of research for the National Retail Federation. “But nine out of the top 10 web retailers have their own brick and mortar stores. You need both to satisfy today’s customers.”
And even with all the store closures, there are new retailers waiting to move into much of the space that opens up, according to Tom McGee, CEO of the International Center of Shopping Centers.
“Occupancy rates are over 90%. What that says is that it’s being filled by new types of retailers,” said McGee. “I think the malls will be very crowded this weekend.”
But online shopping is speeding up the pace of change in the industry, according to the experts, meaning that a bad holiday season might be enough to kill a retailer that could have survived a bad year in the past.
“With the speed of change now compressed, that makes this holiday shopping season absolutely the most important one we’ve seen,” said Mike Kim, head of retail analytics at consultant AArete.
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