Thanksgiving shopping holds allure as deal seekers flood stores and online – CNBC

Bargain-hungry shoppers didn’t let the rain, chill or tryptophan keep them away from doorbuster deals Thursday night.

Despite outcry that several major retail chains would once again open on Thanksgiving, some 16,000 people piled into Macy’s Herald Square flagship when it opened at 5 p.m. That’s roughly 1,000 more people than last year, when the store opened an hour later.

At a New Jersey Target, a line of 600 people started building at noon — and outlasted pockets of rain — ahead of its 6 p.m. opening. Deal seekers also lined up outside wet J.C. Penney and Best Buy stores across the Northeast, waiting for their 3 p.m. and 5 p.m. openings.

Once they got inside, they were ready to spend.

“The most encouraging trend I’m seeing is while guests were in our stores shopping for those big doorbuster items, they continued to shop multiple categories,” Target CEO Brian Cornell said Thursday night.

Popular deals included a 50-inch 4K TV set for less than $ 250, and a $ 10 oversize teddy bear. Shoppers were also scooping up Apple watches, Nerf and Lego toys, gaming systems, hoverboards and sleepwear.

“Our guests still enjoy shopping on Thanksgiving evening,” Cornell said.

Black Friday deals have been seeping into turkey time for the past several years. The trend took off en masse back in 2013, when Macy’s, Best Buy and J.C. Penney joined the likes of Target and Toys R Us in opening their stores after Thanksgiving dinner.

That movement has since accelerated, with retailers inching their start times earlier each year. This season, however, many retailers stuck with their prior-year plans, signaling what Jefferies analyst Daniel Binder said could be a “ceasefire” in the “arms race” to open earlier.

Other retailers and property owners changed their tack this season, partly in hopes of bringing some excitement back to Black Friday. That includes CBL & Associates, which closed nearly allof its 89 shopping centers until 6 a.m. Black Friday. At the Mall of America, all but three of its more than 520 stores — Macy’s, Sears and the Crayola Experience — stayed dark.

“Black Friday historically has been such a great shopping day,” CBL CEO Stephen Lebovitz told CNBC last month. “It’s lost its luster because we’ve diluted it. … We want to bring back Black Friday and make it fun.”

The industry is torn on whether Thanksgiving store hours are worth the trouble for retailers, who incur additional payroll expenses when they opt in. In CBL’s case, its tenants’ sales were simply being spread out, Lebovitz said.

However, analysts generally agree that for retailers who have customers that are more price-sensitive, it makes sense to stay open. That’s because many shoppers choose to spend on either Thanksgiving or Black Friday — meaning if a store is closed on Thursday, they’re likely to head to a competitor instead.

Further depressing store traffic on Black Friday is shoppers’ growing tendency to search for deals on the web. According to a prediction by Adobe Digital Insights, which measures 80 percent of all transactions from the top 100 U.S. retailers, online sales on Thanksgiving and Black Friday are expected to grow 15.6 percent and 11.3 percent, respectively.

As of 5 p.m. Thursday, Adobe said retailers had rung up $ 1.15 billion in online sales, a 13.6 percent increase over last year. At Target, Cornell said the company was in position to potentially have its largest sales day ever. Both revenue and traffic were up double-digits as of 8:30 p.m., he said.

Sales typically get off to a strong start when a retailer first opens its doors, then taper off as the night goes on. Traffic tends to pick up again early in the morning on Black Friday. Yet with consumers doing more shopping online, and with deals starting earlier in the season, it can be tough to gauge the success of a season during the spread-out sales event.

“It is becoming increasingly difficult to use stores as a barometer for success as more business shifts online, particularly during the high traffic periods,” Citi analyst Paul Lejuez said in a research note Wednesday.

Despite the shifting nature of Black Friday, it is still seen being the busiest day of the season, according to ShopperTrak. Some 137.4 million people are expected to shop over the holiday weekend, with roughly three-fourths of them planning to do so on Black Friday, according to the National Retail Federation’s consumer survey. That compares with 21 percent who said they would shop on Thanksgiving Day.