NEW YORK – The hard-core shoppers who flock to stores and malls at 5 a.m. Friday for those post-Thanksgiving bargains may find that they're stragglers — a growing number of retailers will be open at midnight with early bird specials to begin the holiday season.
And retailers including CompUSA Inc. and BJ's Wholesale Club Inc. (BJ) aren't waiting for the day known as Black Friday — they'll be open on Thanksgiving for the first time to give shoppers and themselves an even bigger head start.
More stores are opening earlier because they want to grab customer dollars before the competition does. It's great for shoppers, who have more options if they're willing to sacrifice a night's sleep. But it also creates challenges for retailers; many industry analysts question how profitable expanded hours are because stores must increase their investment in labor.
And many merchants who had a surge in bargain hunters in the wee hours later suffered a dropoff in business after the early bird specials ended and the crowds dissipated.
"It makes for a flashy start. But in recent years, the overall weekend has been just ho-hum," said Michael P. Niemira, chief economist at the International Council of Shopping Centers. "I just don't know whether this is the kind of strategy that makes for a good holiday season."
Many retailers like Wal-Mart Stores Inc. (WMT) and Best Buy Co. (BBY) are resisting the urge to pull an all-nighter, at least for now. Bart Reed, Best Buy Co.'s consumer marketing director, said the store will stick to the 5 a.m. opening on Black Friday to give store associates a "work-life balance."
Other retailers say they have no choice but to throw themselves into the midnight game on Black Friday, so named because it was traditionally when the surge of shopping made stores profitable.
"It would make terrible business sense if we didn't do it," said Ernie Speranza, chief marketing officer at KB Toys, which will have more than 50 stores opening at midnight Friday, up from nine a year ago.
Many shoppers just love the early start.
Sharise Monroe, of Miami, said she planned to begin her holiday shopping before dawn on Friday to get the special limited offers at Wal-Mart, Target Corp. (TGT) and other stores.
"I try to get the one of five items they have out for that price," said Monroe, who will be looking for computer upgrades and a printer for a Kodak digital camera.
Two years ago, mall developer General Growth Properties experimented with having its Birmingham, Ala., mall open at midnight. Last year three other malls joined the early openers, and this year a total of seven malls will be greeting very early shoppers this year.
The big crowds and the discounts of 50 percent and 60 percent have created a buzz that has even caught the attention of foreign tourists, who in the last two years are making trips specifically to partake in Black Friday shopping. In fact, Chelsea Property Group, a division of mall developer Simon Property Group, dispatched a team overseas for the first time this year to market Black Friday shopping to tour operators.
"They all want to be part of the American shopping experience," said Michele Rothstein, senior vice president of marketing for Chelsea Property, which will have 25 of its 36 U.S. based outlet centers open at midnight on Friday, up from last year's seven. "This is power shopping at its best."
This year, Toys "R" Us will be opening all its stores at 5 a.m., according to spokeswoman Kathleen Waugh. Last year, when the company planned to open at 6 a.m., some of its stores decided to let customers in an hour earlier; the strategy worked, and so the company has adopted the earlier start for all its stores.
Shopper Lark Baughman of Niskayuna, N .Y. said she usually starts around 5 or 6 a.m. "We get the newspaper on Thursday to plan the day, then we meet up with friends to shop all day," she said.
But Connie Million, of New Castle, Pa., is among those will pass up the opportunity to trek to the stores in the dark.
"A lot of times they get you into the store and they have one or two items and they don't have enough of it," she said.
While Black Friday officially starts holiday shopping, it's generally no longer the busiest day of the season — that honor now falls to the last Saturday before Christmas. But stores see Black Friday as setting an important tone to the overall season: what consumers see that day influences where they will shop for the rest of the season.
Still, as ICSC's Niemira said, "Black Friday isn't a bellwether of the season."
Last year, total sales dipped 0.9 percent to $8 billion on the Friday after Thanksgiving, dampened by deep discounting, from the year-ago period, according to Shopper Trak RCT Corp., which tracks total sales at more than 45,000 mall-based retail outlets. For the weekend, total sales rose just 0.4 percent to $16.8 billion.
Still, merchants ended up meeting their sales figures, helped by last-minute buying surge and post-Christmas shopping.
Bill Martin, co-founder of ShopperTrak said that "12 midnight openings are just a gimmick. They haven't even proven the results of opening at 5 a.m." Martin said that massive discounting only trains shoppers to expect low prices throughout the season and has increased procrastination.
Merchants that have tested the midnight openings say they have been pleased with the sales results and believe they can control crowds in the stores better with a bigger shopping window.
Not to mention, stores said they like the folks that travel through the stores in the early morning hours on Black Friday.
"Customers are in a great mood. They are laughing, kidding around," KB's Speranza said.