Holiday sale

Fearing tightening shipments, retailers lay out early holiday sales plans

NEW YORK/LOS ANGELES (Reuters) – The coronavirus pandemic is upending the way U.S. consumers shop and the holidays will be no exception as major retailers and shippers roll out their first-ever shopping season.

Target TGT.N, Best buy BBY.N and Kohl’s KSS.N have moved the winter holiday promotions to October. They also joined their rival Walmart WMT.N announcing store closings on Thanksgiving and plans to bypass midnight Black Friday door-to-door sales that traditionally mark the start of the holiday season but are inconsistent with pandemic social distancing recommendations.

Kohl’s general manager, Michelle Gass, said Tuesday that “a holiday season like no other” means a focus on comfortable clothing, homewares and children’s toys, all categories that have done well. performed as buyers largely choose to stay home.

Target CEO Brian Cornell said Wednesday that the retailer will emphasize same-day delivery and add thousands of items available through those services, including more gifts and essentials during the “summer season.” very different parties. Same-day delivery relieves delivery companies like United Parcel Service UPS.N and Fedex FDX.N because it’s done by “gig” drivers for companies like Shipt, DoorDash and Postmates.

A supplier to a major retailer has told Reuters the chain is bracing for a 30% drop in holiday spending this year, although the National Retail Federation (NRF) trade group has yet to release its holiday forecast. .

“It will be interesting to see if stores even have Black Friday sales or are open on Black Friday,” said Randy Hare, portfolio manager at Huntington Private Bank, who says he’s “starting to think about how we want to be positioned in the holiday season.

Some logistics companies are urging retail customers to pace promotions — for example, pushing big-screen TVs one week and holiday sweaters the next — to ease the crush.

FILE PHOTO: Shoppers practice social distancing while waiting with their shopping carts to enter a Target store in Manhattan during the outbreak of the coronavirus disease (COVID-19) in New York City, New York, United States, April 1, 2020. REUTERS/Brendan Mcdermid

“It can’t be a blitz of every product you have online. Let’s make our choice,” said Scott Sureddin, CEO of DHL Supply Chain for North America.

E-commerce is expected to hit a record 15% of all U.S. sales this year, according to research firm eMarketer, and retailers are scouring their operations for opportunities to cut costs. They get no break from delivery companies, which impose hefty surcharges on vacation packages and select business by limiting shipments to certain customers.

Traffic jams at the U.S. Postal Service — which Rakuten Intelligence says now handles nearly 40% of last-mile home deliveries — are taxing the U.S. shipping network, which is bracing for a spike in holiday volume on top of demand fueled by the pandemic that shippers called a “second Christmas.”

Average daily package volume at UPS reached 24.4 million during the second quarter, nearly 92% of what it was during the holiday peak in the fourth quarter.

Demand is so strong that the USPS has announced its first ever holiday surcharge – joining UPS and FedEx.

“We know that online shopping picks up over the holidays and the system is already in a rush to respond to this type of demand,” said Mark Mathews, vice president of research at NRF. “If you have a situation where you add another 10 or 20% to that, which is well within the realm of possibility, that creates some real challenges.”

Retailers are struggling to keep their shelves stocked for all holiday shopping while avoiding ending up with too much unsold merchandise if anxious shoppers refuse to open their wallets. The NRF recently forecast a 9.4% decline in total container imports this year.

By starting promotions early — in some cases before Halloween — retailers risk tiring shoppers over the holidays. But analysts and investors say the idea could help bring buyers back. Footfall in malls remained just a quarter of last year’s levels, according to data collected by analytics firm Springboard, rising just 5% since early June.

The July 31 expiration of a $600 weekly unemployment benefit, which injected $18 billion a week into the economy, is expected to shake consumer sentiment and spending in the months ahead.

This week, Walmart, Kohl’s and Target all reported that the back-to-school season – the second most important for retailers – has been “hectic”, “slow” and “uncertain”, as rampant COVID-19 infections in the United States have caused the reopening of schools. in doubt and buyers had little or no need for backpacks and uniforms.

On Wednesday, Target, which posted its best quarterly growth in same-store sales and online revenue that nearly tripled, announced it would extend back-to-school deals and offers.

Reporting by Melissa Fares in New York and Lisa Baertlein in Los Angeles; Additional reporting by Victoria Waldersee in Lisbon; Editing by Vanessa O’Connell and Nick Zieminski

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