target-gives-thanksgiving-day-back-to-workers:-will-other-retailers-follow?

While retail workers have been on the literal and figurative front lines since the beginning of the pandemic, the unofficial kickoff of the holiday shopping season this week delivers an all-too-rare silver lining for the in-store workforce: The prospect that the reclamation of Thanksgiving as a retail-free holiday could become permanent. 

Most major retailers have announced plans to remain closed this Thanksgiving Day, as they had last year, when a combination of capacity restrictions, social distancing regulations and a customer base reluctant to be in enclosed areas with large numbers of people made in-store shopping unfeasible. Target, however, took it a step further: On Monday, the company announced that it will make shuttering its stores on Thanksgiving Day permanent. 

The excesses of Black Friday, and the toll it takes on the people behind registers and stocking shelves, has drawn plenty of criticism.

Target CEO Brian Cornell explained the rationale behind the decision in a note written to employees, the Associated Press said. “What started as a temporary measure driven by the pandemic is now our new standard — one that recognizes our ability to deliver on our guests’ holiday wishes both within and well beyond store hours,” he said. The retailer said that, while stores would be closed, some distribution and call center workers would remain on the job on Thanksgiving. 

Black Friday creep reached its zenith in 2019, with many big chains open for “Black Friday Eve” — in other words, on Thanksgiving Day, when most Americans traditionally expect to be at home with their families. The excesses of Black Friday, and the toll it took on the people behind registers and stocking shelves, drew plenty of criticism from pundits and on social media platforms, but continued apace.

Ultimately, it took no less than a global pandemic, followed by a historical labor market distortion and worker shortage, to stop this trend in its tracks. 

Arun Sundaram, senior equity research analyst at CFRA Research, said the Thanksgiving closure was a good idea for Target and predicted that other big-box chains would eventually do the same. “I think it’s the right move, especially in this tight labor market where employees have more leverage than the employer does,” he said. 

To the extent that there ever was, there is less of a need today for general-merchandise stores to be open at all hours: Under pressure from Amazon, brick-and-mortar retail brands had been investing in their e-commerce capabilities, the pace of which was supercharged by Covid-19. During months of lockdowns, these companies poured money into web and app shopping tools, distribution networks and fulfillment strategies. 

There is even less reason today for general-merchandise stores to be open at all hours.

The result, Sundaram said, is that it’s easier than ever for people to shop from their sofas. Even before the pandemic, there were hints that earlier and earlier opening times on Thanksgiving were having diminishing returns for retailers, with some market observers suggesting that most of the Thursday night shopping activity was just cannibalizing Black Friday sales. 

“It doesn’t make sense to be open on Thanksgiving anymore,” Sundaram said, pointing to the expansion of digital shopping options as well as the extended timeline for Black Friday sales and discounts. “Deals are spread out throughout the holiday season now,” he said. 

Labor advocates expressed relief, along with some skepticism about companies’ long-term commitment to staying shut on Thanksgiving Day. 

“I’d take any announcements about the longer term with a grain of skepticism,” said Ruth Milkman, a professor of sociology at City University of New York and chair of the CUNY School of Labor and Urban Studies, although she added that this year’s closures make sense from a business as well as a humanitarian perspective. 

“This year, with the labor shortage and a desire to retain workers already on the books, this is a rational move by retailers,” she said.

Milkman suggested that the decision would be a welcome one for workers and their families, especially since many gatherings last year, even between relatives, were truncated or conducted via video chat. “It may also reflect some recognition that so many families didn’t have Thanksgiving gatherings last year. And so now that they can do so again, shopping may not be a popular priority on the holiday itself,” she said.

Along with being cognizant in the changed balance of power between employer and employees, retailers also are loath to trigger any kind of consumer backlash that could hurt sales: The National Retail Federation has predicted a record-shattering year for holiday spending. 

“Consumers are in a very favorable position going into the last few months of the year,” NRF president and CEO Matthew Shay said in a statement. At the high end, the trade group said American shoppers could spend as much as $859 billion. 

But, along with the prospect of robust sales, retailers are facing higher costs on goods, shipping and labor. While many have been able to mitigate the hit to their bottom line by raising prices, this doesn’t eliminate the expectation that labor and staffing will remain a challenge for the foreseeable future. A public relations crisis that could derail this momentum could lead to disappointing sales, not to mention worker defections.  

Despite wage growth of nearly 5 percent on an annualized basis, a record-high 4.4 million Americans quit their jobs in September, according to the Department of Labor. “Over the past three months, the increase in people quitting their jobs has taken a toll on recruitment and retention across all sectors, but has shaken retail and hospitality,” Scott Blumsack, senior vice president of data and research at Monster.com corporate parent Monster Worldwide, said via email. 

“Target’s move to permanently offer the holiday off will demonstrate to employees and prospects that they care about work life balance, which is critical in today’s market,” Blumsack said. “Time will tell if others follow suit.”

Sundaram said the stakes are high for Target — as well as its rivals — to get the balance between people and profit right this holiday season.

“This is something workers have been asking for for a while now,” Sundaram said of the Thanksgiving closure announcement. “I think it’s a good move both in terms of ensuring that employees are happy and in keeping shareholders happy.”

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