Black Friday is often hailed as the biggest shopping day of the year. But often, the deals start rolling in the night before -- and in many cases, the day before.
That's a mixed bag for U.S. consumers. On the one hand, many people like to shop on Thanksgiving because they have the day off. On the other hand, some shoppers firmly believe that Thanksgiving should be reserved for food, friends, and family -- not frantic purchases.
And some mall operators agree. And now, Simon Property Group (NYSE: SPG), the country's largest mall operator, has announced that all of its U.S. locations will be closed on Thanksgiving Day, as it's done in recent years.
The question is: Will that hurt its revenue? Or will closing for a day end up being a nonevent?
A bold move
At a time when foot traffic at malls is lacking, it's easy to bash Simon's decision to close for Thanksgiving. Many consumers shifted to making online purchases in the 2020 holiday shopping season when COVID-related fears kept them far away from physical stores.
However, this year, that sentiment could shift. With coronavirus vaccines being widely available, consumers may no longer fear the idea of setting foot in a mall.
At the same time, now that consumers are used to shopping online, they could choose to do more of that during this holiday season. And so, closing malls on Thanksgiving for those who would like to shop then may seem risky.
But actually, a recent survey by bargain site RetailMeNot found that 68% of shoppers agree that stores should stay closed on Thanksgiving Day. That same survey found that consumers are growing more comfortable entering malls and plan to split their purchases 50/50 between e-commerce sites and physical shops.
If the roughly 1,100 people included in that survey are indicative of the general population (which may or may not be the case), Simon's decision to close malls for Thanksgiving shouldn't have harsh repercussions. But some investors may not appreciate that the mall giant is intentionally keeping customers away on what could, ultimately, be a very profitable day for shopping centers and retailers.
Keeping the faith
Simon has been closing its shopping centers on Thanksgiving Day for years, and it's not the only big player to do so. The fact that Simon feels comfortable sticking to that plan this year could be a sign of its faith that consumers will soon return to malls at a pace that mimics pre-pandemic levels. And that's something investors in mall REITs (real estate investment trusts) should take comfort in.
While closing for Thanksgiving may seem like a dangerous move, given how desperate malls are for foot traffic, let's also remember that making the opposite decision -- to open on Thanksgiving -- could be met with even more backlash.
The pandemic has helped many people reassess their priorities. And in this day and age, consumers are more likely than not to get on board with the logic of preserving the spirit of Thanksgiving and saving their deal-centric shopping for the following day.