It was only a few years ago that big retailers raised eyebrows by keeping their doors open during Thanksgiving. Now some are planning not to close at all this holiday season.
Toys R Us has kept its flagship store in New York's Time Square continuously open since December 1. The chain's other locations will join the store marathon run at 6 a.m. on December 21 and will test shoppers' endurance through 9 p.m. on Christmas eve. Kohl’s (KSS) won't shut its doors
from 6 a.m. on Friday, Dec. 20, through 6 p.m. on Dec. 24.
The benefits for chains of not closing during the holiday season, where they can earn as much as 70 percent of their profits for the year, are many though it doesn't necessarily mean that sales will rise, said Marshall Cohen, NPD Group's chief industry analyst.
"They want to beat the competition," he said. "Online is open 24/7. Why should [retailers] allow them to have uninterrupted access to their customers."
Keeping stores open for multiple days in a row isn't especially costly. Pay in the retail industry is low, while workers, many of whom struggle to get 40 hours a week during the rest of the year, appreciate the opportunity to earn extra cash. Moreover, stores adopt the practice out of fear of disappointing their customers or investors.
"No one wants to be criticized for not taking advantage of an opportunity that was presented to them," Cohen said.
Industry leaders such as as Walmart (WMT) and Target (TGT), the two largest U.S. retailers, reported disappointing during the latest quarter, fanning fears on Wall Street that consumers would reduce their spending during the holidays. Kohl's earnings failed to meet the company's own internal projections, and closely held Toys R US lost $605 million in the third quarter. The holiday season is especially important for Best Buy (BBY) and J.C. Penney (JCP), which are trying to improve their struggling financial performances.
Moreover, most retailers have extended hours during the holiday season, so they figure it can't hurt to see if they can get additional sales at a time when they are preparing for the morning shopper rush, according to Bill Martin, the founder of Shopper Trak, which tracks activity in bricks-and-mortar stores.
"The whole idea is if you open they will come," he said.
Holiday sales are expected to rise 2.4 percent this year. That is below the rate of spending growth for the same period in recent years, but Martin notes that total holiday sales are likely to hit a record high.
With the exception of hyped products such as Sony's (SNE) PlayStation 4 and Microsoft's (MSFT) Xbox One, even consumers with cash haven't found much to inspire them. NPD has seen evidence of that when it polls consumers about the hottest toys to buy, according to Cohen.
"Never before have they looked at me and said `I don't know. What do you recommend?'," Cohen said. "I am shocked that the consumer has no clue what to get people."
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