The Thanksgiving retail 'arms race' is a waste of money

Over the last decade, a growing number of retailers have started kicking off their Black Friday sales on Thanksgiving Day.

But according to Moody's analyst Charles O'Shea, opening on Thanksgiving is a waste of money for most retailers.

"We doubt that the majority of specialty retailers benefit from involvement in this annual Thanksgiving opening arms race," O'Shea wrote in a research note published Thursday. "Toys 'R' US and Best Buy, which we consider specialty retailers, are likely the only ones that could make a case for being open before midnight on Thanksgiving Night, and even that might be a push."

That's because Black Friday doorbuster sales are typically "heavily skewed towards toys and consumer electronics," he wrote.

A decade ago, retailers started kicking off their Black Friday sales on midnight following Thanksgiving.

Over time, retailers like Walmart, Target, and Macy's began creeping earlier and earlier into Thanksgiving Day.

"Other retailers have felt the pressure and have played follow the leader," O'Shea wrote. "While some have benefitted, most have not."

This year, Macy's is planning to open earlier than ever on the holiday, at 5 p.m.

Macy's said it was opening so early in response to "significant, ongoing customer interest in shopping on Thanksgiving."

Some companies - like OfficeDepot and hhgregg - are bucking the trend this year, however, and choosing to remain closed for the holiday.

Companies like Walmart, Sears, and Target haven't announced their holiday hours yet.

Instead of opening stores on Thanksgiving, retailers should invest more in Black Friday promotions online.

"We believe most retailers would be best served shifting dollars spent on Thanksgiving openings by pulling their web specials forward and picking off some additional sales earlier in the week, and offering heavier in-store promotions over the weekend," he wrote. "We have seen too many instances of apparel retailers having to promote heavily the week after Thanksgiving, which is an indication that sales were slow over the weekend."