Retailers, Thanksgiving, and Black Friday

Many retailers have decided to open at midnight this year on Thanksgiving, rather than waiting for the early morning hours of Black Friday.   Some controversy has erupted over this decision.  News reports indicate that Anthony Hardwick, a part-time Target employee in Omaha, became very upset when he learned that some employees would have to come to work at 11pm on Thanksgiving night to prepare for a midnight opening.  He launched an online petition, gathering over 37,000 signatures in protest of the midnight opening. Here in Massachusetts, firms have had to delay their opening to 1am or later because of the "blue laws" prohibiting certain businesses from requiring employees to work on the Thanksgiving holiday. 

For me, the controversy around whether employees should work on the holiday obscures a more strategic issue facing these firms.  The critical question is:  Will opening at midnight actually enhance revenue and profitability?  Retailers may find that the earlier opening simply shifts sales from other points in time on the holiday weekend, rather than adding true incremental revenue.   Moreover, even if the firms experience incremental sales, they may find that the additional expenses associated with opening at midnight overwhelm the additional revenue.   To be successful, these firms must do more than cope with the public relations backlash that they are experiencing.  They must generate true incremental revenue, and those sales increases must be sufficient to offset the additional costs that they will incur.