Businesses profit despite underperformance

Long lines and savage shoppers are replacing family gatherings and turkey dinners this Thanksgiving, as Walmart and other superstores start their Black Friday sales earlier than usual. Large retailers are starting their online promotions up to a week early and offering discounts on Thanksgiving to increase their end-of-year profits. While many consumers may believe that these sales are aimed to help shoppers have more time to purchase products, nothing could be further from the truth. These corporate giants care less about the customer and more about increasing their revenue, even if it means pressuring consumers to spend their Thanksgiving Day shopping for the best deal instead of spending time with their families.

The day after Thanksgiving has traditionally marked the beginning of the holiday season. The Philadelphia Police Department coined the term “Black Friday” in 1966 because of the traffic congestion that arose from shopping. It was not until years later that corporate CEOs decided to use the term in reference to their black, or positive, margins for the holiday season.

But in recent years, Black Friday shopping has spun out of control. Sleeping in tents outside of stores to score the best discounts has become commonplace among die-hard shoppers. Even more disturbing, there have been numerous shopping injuries over the past decade, ranging from a woman pepper spraying fellow shoppers to store workers being trampled to death by massive crowds.

Now, the craziness encroaches on the day reserved for turkey and family. Companies need every possible sale this holiday season since Thanksgiving is as late in November as possible and consumer certainty is lower than past years. Matthew Shay, president of the National Retail Federation, points out consumers are wary of the “stability of our economy, our government and their own finances,” especially due to the recent gridlock in Washington, D.C.

This has caused many companies to underperform this quarter. Best Buy, Kohl’s, Target and Toys “R” Us have all experienced negative earnings-per-share growth over the past year and thus are staying open on Thanksgiving to maximize their holiday sales. On the other hand, retailers like Costco and Nordstrom that have had positive EPS growth are closing their doors during the holiday.

Unfortunately, businesses will likely turn a profit on Thanksgiving. If shoppers are willing to trample people to death for a sale, they are certainly willing to skip a family meal to be the first in line. Now that Thanksgiving has been monetized, who knows how businesses will profit off of American culture next.

A verison of this article appeared in the Tuesday, Nov. 26 print edition. Adam Fazlibegu is a contributing columnist. Email him at [email protected]



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