Retailers Desperately Seeking Sales

Is this a sign of desperation? Toys R Us will be running a shopping marathon, keeping its doors open for 87 hours straight leading up to Christmas Day.

It marks the fourth consecutive year the toy store will be offering 'round-the-clock shopping, and, like last year, when Macy's (NYSE: M  ) pulled a similar stunt (but limited it to just 48 consecutive hours), Toys R Us won't be alone.  It will also be joined this time by Kohl's (NYSE: KSS  ) , which announced earlier this month it was going to stay open for 100 consecutive hours. It opened its doors at 6 a.m. today and, for the first time ever, will not close them until 6 p.m. on Christmas Eve -- actually more than 100 hours. 

It seems clearer than ever that, this Christmas season, retailers aren't just worried about their results, they're flat-out terrified that the bottom will be dropping out of sales. Now they're doing everything they can to reverse the trend.

Just as a few retailers had previously dipped their toes in the waters of opening on Thanksgiving Day, only to see a pell-mell rush this year by rivals to join them -- and both Sears HoldingsKmart division and Big Lots opened early on Thanksgiving, not shutting their doors until 41 hours later -- with less than a week left till Christmas, we might see more stores doing the 'round-the-clock routine, too.

Some retailers like Wal-Mart (NYSE: WMT  ) already operate on a 24-hour basis at some of their supercenters, so this wouldn't mean a change for them, but Macy's just said that it will reprise its role from last year and keep select stores open again for 107 straight hours.

In the context of a calendar-shortened shopping season -- there are six fewer days this year than last between Black Friday and Christmas -- it smacks of real fear, and this year, there is no novelty to anything the retailers are doing. If one says it's doing something, everyone else joins in.

Worse for them (and investors) is that they'll also continue to be just as promotional as they have been all season long. Wal-Mart, for example, tried to juice sales by offering its Black Friday sales a week before Black Friday, and running sales all week long, and then some. While there was a bit of a hubbub made about the Christmas discounts not being so significant because retailers raised prices ahead of the sales to make the discounts appear more dramatic, it's still going to impact margins.

After bitter-cold temperatures and snow hit the Midwest and Northeast this month, ShopperTrak says retail in-store shopper traffic fell 20% last week compared to the same time period in 2012. That alone may force the hands of retailers to join the fray, but also cause them to panic and offer even deeper discounts as the never-ending, everlasting Christmas shopping season draws to a close.

With all this selling, promotion, and discounting going on, I'm not sure I'd want to find a retailer in my portfolio when it comes time to report these seasonal results.

A not-so-merry jingle
To learn about two retailers with especially good prospects, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.

Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2772960, ~/Articles/ArticleHandler.aspx, 9/26/2016 6:46:45 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 days ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:03 PM
KSS $43.36 Down -0.15 -0.34%
Kohl's CAPS Rating: **
M $36.62 Up +0.36 +0.99%
Macy's CAPS Rating: **
WMT $72.35 Up +0.08 +0.11%
Wal-Mart Stores CAPS Rating: ***