Great ResignationInflationSupply ChainsLeadership

Retailers Like Macy’s And Target Have Lots to Prove This Black Friday

November 22, 2018, 2:16 PM UTC

The so-called Super Bowl of retail is upon us again, with Black Friday and Cyber Monday likely to attract tens of millions of shoppers over the long weekend to kick off their holiday season spending.

A strong U.S. consumer spending environment that Target CEO Brian Cornell has called the best in memory—no shopping-impeding weather forecast anywhere in the country and young shoppers set to hit stores in greater numbers—means that any retailer that stumbles this long Thanksgiving weekend will have no one to blame but themselves. Indeed, the consensus among analysts is that this will be a blockbuster holiday season: Moody’s, for one, expects 5% to 6% growth in retail sales.

According to a National Retail Federation survey, some 164 million Americans will go shop, either in-store or online, at some point over the holiday weekend. And in the last week, chains like Target, Walmart (WMT), Macy’s (M), Kohl’s (KSS) and Best Buy (BBY) have all reported good sales growth for the previous quarter.

But shoppers are more fickle than ever, looking out for No. 1 above all, as data from a Deloitte survey heading into the holidays found. “Nearly half of people in the survey told us they remain undecided which retailer they’ll shop over the weekend,” said Rod Sides, vice chairman of Deloitte.

That means that companies that have invested heavily in loyalty programs to get deep data on their customers and improve their ability to communicated more directly with them, stand to be the biggest winners. Kohl’s (KSS) and Ulta Beauty (ULTA) are among the leaders on that front, but Macy’s has made big strides in the last year as it’s overhauled its rewards system.

And those that got an early start on marketing and promotions online also stand to be winners: Adobe Analytics said online sales from Nov 1-Nov 20 were up 16.7% compared to last year to almost $32 billion.

The stock dives this week of many large retailers despite strong sales results at many big chains show there is also growing concern on Wall Street about the costs of competing with (AMZN) Bloomberg reported, citing data from DynamicAction that orders with free shipping have risen 13% so far this year through Nov. 16. And the investments by big chains in integrating stores and e-commerce (Kohl’s, for instance, will ship about 50% of its e-commerce orders from stores, Target’s digital sales rose 49% last quarter) will put this to the test, as will the volume of orders.

Yet for all the good numbers lately, some chains remain in deep peril and the holiday season getting underway in earnest could cull more chains from the thinning herd.

Here is a look at the some of store chains in the hot seat this holiday season:

Macy’s and Kohl’s

Both chains have enjoyed several quarters of growth, but they have to prove that they are not just riding a strong economy and that their strategies to beef up e-commerce, their loyalty programs and make better use of shopper data are working.

J.C. Penney

It’s an achievement of sorts to have plunging sales in this environment, as Penney reported last week, so the department store chain has to prove that for all of its problems, and how far behind rivals it is in terms of e-commerce firepower, there is still room for it in the world of retail. It’s opening at 2 p.m. on Thanksgiving, three hours before its most direct competitors, in what feels like a Hail Mary pass.


The chain, looking to keep up with Amazon and outdo Walmart on at least on front, is offering free shipping this season and will need to show the uptick in sales is worth it, with investors worried about its profitability now. It will also have to show it can contend with Amazon and Walmart as all three vie for toy sales in the wake of Toys ‘R’ Us’ disappearance.


The largest retailer has been on a tear online and its ability to drum up more store traffic. So Black Friday and the rest of the holidays will show how much its stores are an edge over Amazon.

Best Buy

The chain has defied the odds for several years by sharpening its offer in in-store services and the holiday season will show off its latest efforts to de-commoditize electronics.

Barnes & Noble

The bookseller, which this week bragged about a comparable sales decline that admittedly was far less dramatic than its dismal performance of the last few years, is entertaining offers to be bought out. So the holiday season will be a big test for prospective buyers that Barnes & Noble can still win over shoppers.

The Gap

Gap Inc (GPS)just reported yet another quarter of dismal results, despite years by the company to improve its production process and attempts to make the product more appealing.

Nordstrom, Saks Fifth Avenue, Bloomingdale’s, and Neiman Marcus

The four upscale department store chains are on the upswing but they are competing with the fast growing Farfetch, contending with more high-end brands selling directly to shoppers via their web sites and own stores, and changes in how younger shoppers buy luxury.