Black Friday weekend trends were soft and somewhat disappointing despite an increase in the number of shoppers. Given the earlier Thanksgiving Day mall openings this year (generally 8 p.m. versus midnight last year) shoppers felt less urgency, and last year's midnight crowds did not show up at 8 p.m.
The National Retail Federation estimated that consumers spent $57.4 billion over the Thanksgiving weekend, down 2.7 percent from last year. More than 141 million unique shoppers have already or will have shopped by the end of the big Thanksgiving weekend, up from 139 million over the same time frame last year.
Low prices helped keep Americans' budgets in check this weekend: on average, shoppers spent $407.02 from Thursday through Sunday (planned), down from $423.55 last year, NRF added.
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Traffic built from 8 p.m. to midnight and saw a second rush on Black Friday morning. Traffic waned once doorbusters concluded. Some demand may have also been pulled forward by the heightened promotional stance throughout the month, creating a self-inflicted lack of excitement.
BMO Capital Markets analyst John Morris believes November trends were decent, driven by the onset of seasonal weather. However, the true underlying demand will likely be offset by the later Thanksgiving, which moves the key post-Thanksgiving shopping week out of November and into December. The analyst estimate that the trend would hurt retailers' November comps by around 3-4 points.
Let's see how the Black Friday fared for various retailers:
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Gap, Inc. (NYSE:GPS):
Like last year, Gap's store-wide Black Friday sale started a couple of days before Thanksgiving, offering discounts of 'up to 60 percent off' as well as daily deals, such as $19 sweaters on the Wednesday before Thanksgiving. On Black Friday, the company stepped up ! the level of discounting to 50 percent off the entire store.
Despite the steeper discounts, traffic and conversion levels appeared in line with last year, which could be a response to a less compelling product assortment.
However, field checks point to a strong Black Friday at Old Navy, with an initial surge fueled by the "Overnight Millionaire" sweepstakes, and ongoing strength throughout the day due to the 50 percent off the entire store discount.
Morris expects a 1 percent comp versus 3 percent last year in November, versus the consensus of flat to up low single digit. This comes on the heels of a better-than-expected 4 percent versus 2 percent last year in October, which benefited from both a sale event shift and incremental promotional activity.
Along these lines, the comp performance should be driven largely by promotions, particularly at the core Gap brand, where the product reception has been mixed.
Limited Brands (NYSE:LTD):
The company is up against strong Black Friday weekends over the past several years, across both brands. While both Victoria's Secret (VS) and Bath and Body Works (BBW) were busy, one did not see the same levels of traffic and long lines like previous years, particularly at VS.
This could be due to some 'promotional fatigue,' as the brand has generally been more promotional throughout the year.
Meanwhile, PINK stores were relatively busier on Black Friday, driven by the BOGO 50 percent off bras offer. BBW's traffic was relatively stronger, driven by strong conversion in the 'Buy 3 Get 3' Signature Collection (launched October) and the gift-with-purchase offer.
Morris believes that BBW is benefiting from the re-launch of its Signature Collection and is also seeing solid performance of the more prestige fragrances, including the new introduction Forever Midnight.
Victoria's Secret offered a limited edition VS tote free with a $70 purchase. Both PINK and VS offered bras BOGO 50% off. PINK offered a $25 hoodie! or yoga ! leggings, tees, tanks, and leggings two for $30. Bath & Body Works featured a free VIP bag for $20 with any $40 purchase (over $100 value). Anti-bac soaps $2.50. Signature Collection was B3G3 Free.
Morris sees Limited Brands reporting a flat comp for November, ahead of guidance of low single digit decline and a consensus view of 1 percent drop.
Children's Place (NASDAQ:PLCE):
Business at Children's Place was solid this year, yet still a touch below plan. Promos looked slightly deeper than last year, with a backdrop of strong competition from Gap Kids, Gymboree, Old Navy, Target, and other players.
Black Friday 2013 promo included 30 percent off savings pass. Black Friday 30-50 percent off everything.
Glacier fleece $4.90 and up after an extra 30 percent off, all basic denim $8.40 and up after an extra 30 percent off, all outerwear now 50 percent off.
American Eagle Outfitters (NYSE:AEO):
AEO offered 50 percent off the entire store, which was only intended to run through 6 a.m., but extended well into the afternoon at most locations, before switching to 40 percent off, in line with last year. Similar to last year, the store also began running 40 percent off several days before Thanksgiving.
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