Big-box retailers are coming out of the gate with an onslaught of holiday deals that may set the stage for a hyper-competitive shopping season.
While some experts worry that will erode retailer profits, they say customers are likely to benefit from bargain prices.
“Wal-Mart has very publicly announced, both to consumers and to the competition, that they’re going to be very aggressive,” said Stephen Hoch, a marketing professor and director of the Baker Retailing Initiative at the University of Pennsylvania’s Wharton School.
Wal-Mart set the tone early in the season, announcing that it would slash prices on toys, small appliances and other items. Earlier this week, the Bentonville, Ark.-based retailer followed up by cutting prices on some food items as much as 20 percent, putting the squeeze on other grocers.
While the day after Thanksgiving often isn’t the biggest shopping day of the year – that honor frequently goes to the Saturday before Christmas – it is seen as a strong gauge of how the holiday season will unfold.
The National Retail Federation predicts that 137 million people will shop this weekend. The group forecasts a 5 percent increase in holiday spending, to an estimated $457.4 billion.
“This is going to be one of the premier years,” said Robert Passikoff, president of Brand Keys, a New York company that measures customer loyalty. “That jingle jingle you hear is going to be retailers taking their money to the bank.”
Friday, Wal-Mart will attempt to draw early morning shoppers by offering a variety of doorbuster deals between 5 and 11 a.m. Among them: a portable DVD player for $49.87, a 42-inch plasma HDTV for $988, and small appliances such as a coffee maker, slow cooker and toaster for $3.98 each.
Best Buy’s website revealed some early-bird specials available between 5 a.m. and noon, including a Westinghouse 42-inch LCD HDTV monitor for $999.99, a portable DVD player for $69.99, DVD titles for $2.99 and CDs for $5.99.
Target’s online advertisements include a $35 microwave, a DVD player for $24.97 and a Magnavox 32-inch LCD HDTV for $1,097.
“Retailers are trying to encourage customers to purchase earlier in the season as opposed to holding out and waiting for discounts at the end of the season,” said Edward Fox, a marketing professor at Southern Methodist University in Dallas.
It appears to be working.
Twenty-one percent of consumers surveyed by the National Retail Federation planned to start their holiday shopping between Nov. 1 and today. Another 13 percent said they would begin the day after Thanksgiving.
On a recent Friday, the toy aisle at SuperTarget in Glendale was already hopping. Mark Ulmer of Highlands Ranch was using his lunch break to scope out high-tech educational toys for his kids, but said his wife will likely brave the crowds to shop the day after Thanksgiving.
Even the deals wouldn’t convince other shoppers to venture out in the early hours.
“Oh, no. Hell, no,” said Denver teacher Charlotte DeLay when asked if she would be among the bargain hunters Friday morning.
Analysts predict the frenzied pace of big-box deals will continue through the season.
“Retailers can’t afford not to (discount) once they’ve started the momentum for discounting,” said Marshal Cohen, chief analyst with the NPD Group Inc., a market-research firm.
Staff writer Kristi Arellano can be reached at 303-954-1902 or karellano@denverpost.com.
BY THE NUMBERS
$457.4 BILLION
Amount shoppers are expected to spend this holiday season, up 5 percent from 2005
$435.6 BILLION
What shoppers spent in 2005, a 6.1 percent increase from the previous season
$791.10
What a typical shopper is expected to spend this season
$738.11
Amount spent in 2005
$99.22
Amount shoppers will spend on themselves
47%
Consumers who plan to shop online this year, up from 36 percent in ’05
Source: National Retail Federation
