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By Erik Sherman /MoneyWatch
November 19, 2013, 12:18 PM
(MoneyWatch) Companies once made news for opening at all on Thanksgiving; now it's more notable when they close. Among the major stores keeping their doors shut this turkey day are Costco (COST), BJ's Wholesale Club, Nordstrom's (JWN), TJX Companies' (TJX) retailers TJ Maxx and Marshall's, and Burlington Stores (BURL), which owns Burlington Coat Factory.
So what is keeping other big players like Wal-Mart (WMT), Target (TGT), Best Buy (BBY), Sears (SHLD), Macy's (M) and Kohl's (KSS) open on Thanksgiving? Partly, it comes down to money (surprise!), with the holidays an increasingly important period for many stories. It also reflects companies' different business models, according to 24/7 Wall St. For instance, Costco gets as much as 80 percent of its profit from membership fees. BJ's is privately held, but it wouldn't be an outrageous overreach to assume something similar. Nordstrom's big sale is in July.
More broadly, whether to open on Thanksgiving is a matter of balancing perceived opportunity and fear. Retailers recognize that people have only so much money to spend during the holiday season, especially with some polls showing that the average consumer planned to trim spending by more than 10 percent this year. By opening on Thanksgiving, the stores hope to snag shoppers before spend their money somewhere else.
The potential commercial benefits aside, staying open raises a company's labor costs. Wal-Mart will provide an extra day's pay and a meal to employees who work on Thanksgiving. Macy's will pay time-and-a-half, as will J.C. Penney (JCP).
Companies also run the public relations risk of appearing hard-hearted by making workers show up during the holidays, at least not without additional compensation. After all, not all consumers run out to shop after the leftover turkey is in the fridge. And then there are the marketing costs. Retailers entice consumers to enter the door with absurdly low prices on products. Maybe only a handful of actual units will be at any given location, with the hope that customers will buy other products as well, making up margin with the additional volume.
But consumers are sharp, and armed with smartphones they can see how good any and all of the prices are. Many are increasingly choosing to stay home and shop online.
Maybe the store executives that let their employees stay home on Thanksgiving and forgo the possible extra few sales they might have gained have the right idea after all.
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