Home Depot has sent a list of the products it will sell for Christmas. Amazon has released plans for another “Prime Day” in October. Prime members better get their wallets full now. Christmas shopping crept from November to October years ago. Astonishingly, the current jump puts promotions five months ahead of America’s biggest holiday. (These companies control over half their industries.)
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Holiday shopping brings retailers about $900 billion each year. For many retailers, the fourth quarter is the only profitable one, which means they count on October to December to survive. As major retailers push their Christmas sales dates into late summer and early fall, it affects the entire industry.
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The retail industry’s problems with an earlier Christmas shopping season are partially due to inventory. The cost to finance earlier stocks of inventory can be significant. And this year, some inventory may not be available in September. That leaves many retailers with nothing to sell so early in the season.
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Earlier Christmas shopping also puts a bite on consumers, as many budget to spend their money in November. Christmas in August throws these budget plans out the window. Underfunded consumers may not be consumers at all in August, a risk retailers with early promotions will have to take.
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Does a head start help retailers pick up some sales? Maybe. However, it may also exhaust the consumer’s spending power, which means people will not have much left when October, November and December come around. All the retailers will have done is move revenue from one month to a few months earlier. That is not a very good deal for them.
Christmas in August
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
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