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November 22, 2011

June Sales Fall

June 25, 2009

Although 31 per cent of retailers said year-on-year sales volumes rose in the first two weeks of June, 48 per cent said they were down.

It was the second consecutive month that the survey recorded a fall in retail sales, after a surprise lift in April.

The CBI said the decline was broadly in line with retailers’ expectations and that it was no worse than in May and less severe than falls recorded between July 2008 and March 2009.

Grocers continued to deliver the strongest performance, with more than half of respondents reporting growth on a year ago.

Furniture & carpets was the only other sector to report growth, with a balance of 19 per cent reporting sales growth — the sector’s best figure for 18 months.

There were particularly marked declines in durable household goods, with a balance of -91% reporting lower sales,hardware, china & DIY (-39%) and clothing (-46%).

Asda chief operating officer and chairman of the CBI Distributive Trades Panel Andy Clarke said: “June’s weak sales figures show that business on the high street isn’t getting any easier. The one consolation for retailers is, it isn’t getting any worse, and the dark days of the winter are behind us.

“It is too early to foresee a sustained pick-up in retailers’ fortunes over the coming months, and the savviest retailers will continue working hard to offer consumers the best possible value for money.”

For further information, visit: http://www.retail-week.com/data/monthly-sales-data/cbi-distributive-trades-survey/retailers-report-falling-sales-in-june-survey/5003820.article

Steady Sales For This Week of June Despite The Weather

June 23, 2009

Retail sales in the United States held even in the week ending June 20, the International Council of Shopping Centers-USB reported Wednesday.

Sales were unchanged in the week, but down 0.9 percent compared to the same week a year ago, the report said.

Temperatures were similar to the same week of 2008, showing no change, but rain may have influenced shopping. Weather Trends International said conditions across the country were 93 percent wetter than a year ago.

The weather may have “pared seasonal outdoor demand,” the report said.

During the week, apparel-specialty stores showed a “strong gain,” while, overall customer traffic was subdued given the Father’s Day holiday.

For further information, visit: http://www.upi.com/Business_News/2009/06/23/Retail-sales-hold-steady-in-week/UPI-95801245780829/

Economic Recovery Not Yet Arriving

June 12, 2009

With a rise in the number of people continuing to receive jobless aid and companies holding off on hiring, analysts warn an economic recovery is still far off.

The Labor Department said Thursday that initial claims for unemployment benefits fell last week by 24,000 to a seasonally adjusted 601,000. That’s below analysts’ estimates of 615,000, reported the Associated Press.

However, the number of people claiming benefits for more than a week rose by 59,000 to more than 6.8 million, the highest on records dating to 1967. The Labor Department also revised last week’s data on continuing claims, replacing what had been a drop of 15,000 with an increase of 6,000.

The Commerce Department said Thursday total retail sales rose 0.5 percent in May, the first advance in three months, lifted by strong gasoline and building material receipts. Consumers also spent more on food and clothing. Sales fell 0.2 percent in April.

The sales report fed optimism that consumer spending would probably be flat to modestly lower in the second quarter, instead of falling sharply as expected by most analysts.

Spending, which accounts for about 70 percent of U.S. economic activity, rose 1.5 percent in the January-March period, after a 4.3 percent dive in the fourth quarter.

Because rising gasoline prices aided last month’s retail sales gain, consumer purchasing could slow in other areas.

Meantime, the number of U.S. households on the verge of losing their homes dipped in May from April, and the annual increase was the smallest in three years, the AP also reported.

Foreclosure filings fell 6 percent in May from April, according to RealtyTrac Inc. More than 321,000 households received at least one foreclosure-related notice last month–18 percent more than a year earlier–but the smallest annual gain since June 2006.

As layoffs, rather than risky mortgages, become the main reason that borrowers default on their home loans, many economists expect foreclosures likely will remain elevated this year and into 2010.

Banks repossessed about 65,000 homes in May, up from 64,000 in April, due to big increases in several states including Michigan, Arizona and Nevada.

The Obama administration announced a plan in March to provide $50 billion from the financial industry rescue fund as an incentive for the mortgage industry to modify loans at lower monthly payments.

On Wall Street, investors welcomed the better-than-expected report on jobless claims and growth in retail sales, pushing stocks higher Thursday morning. Rising interest rates have recently become a concern and had sent stocks lower on Wednesday.

For further information, visit: http://www.pbs.org/newshour/updates/business/jan-june09/economy_06-11.html

Retail Sales Vary Across the U.S.

June 11, 2009

Retailers in cities across the U.S. reported the economic clouds of the last few months could be parting, but consumers remained focused on necessary purchases instead of luxuries, according to the Federal Reserve Board’s Beige Book released Wednesday.

Anecdotal accounts in the report point to a leveling out of sales pressures and in some regions slight improvements, as the economic downturn appeared to moderate. Overall, the 12 districts included in the Beige Book said economic conditions were still difficult, but five districts said the downward trend was slowing and several said their outlook had improved.

Retailers in New York, Minneapolis and Dallas reported slightly improved sales in recent weeks. Reports from Boston, Philadelphia, San Francisco, Cleveland, Kansas City and Atlanta were flat or mixed. Several districts said discount retailers continued to perform better than other stores.

Sales of luxury goods and discretionary purchases were sluggish in most districts. Retailers in New York, Philadelphia, Chicago, Dallas, San Francisco and Kansas City reported consumers were favoring less expensive or discount lines and stores over premium brands and luxury products.

In Philadelphia, merchants gave conflicting reports, but generally indicated they do not expect sales to improve during the rest of 2009. The chief executive officer of a large chain store said, “We are a value proposition, so we are benefitting from uncertain economic times.” Another executive at a high-fashion chain said, “Luxury is in the tank.”

Sales in Kansas City remained steady, according to retailers in the district, but had not yet recovered compared to last year. Sales of basic apparel items increased, but demand for luxury goods and home furnishings was still lackluster, according to retailers in the area. Mall traffic was also slower.

Department stores and specialty retailers in San Francisco reported weak overall demand. One retailer in New York said price discounting had reared its head again recently.

In contrast, most retailers in Boston reported a modest sales increase over the same period a year earlier despite continued pressures on other sectors in the district.

For further information, visit: http://www.wwd.com/business-news/gap-remodeling-50-old-navy-units-2164602#/article/business-news/beige-book-notes-some-retail-improvement-2164427?navSection=business-news

Predicting What The Future Holds For Retail

June 10, 2009

While some kids are still counting the days until the end of this school year, retail experts are looking ahead to the back-to-school shopping ritual as the first real test of whether the economy is recovering.

“In a recession, the consumer is generally the last one to leave the economy and the first one back,” said Marshal Cohen, chief retail analyst with research firm NPD Group.

“Consumers didn’t really start to pull back until last October,” he said. “Now they’ve gone through months of frugality and there’s so much pent-up demand out there.”

According to the National Retail Federation, back-to school shopping is typically merchants’ second-biggest selling period after the holiday gift-buying months of November and December.

If back-to-school sales are a disaster, then Cohen warns that the economy is headed for a “long period of continued challenge.”

But if he’s guessed correctly, and this tidal wave of pent-up demand hits retail stores from mid-summer through September, “it could be the first credible sign that consumers are feeling a little bit OK about spending again,” he said.

That’s significant because consumer spending fuels two-thirds of the economy. And the economy could use the help: the nation’s gross domestic product declined at a 5.7% annual rate in the first quarter of this year, the third straight quarter of decline.

“Parents cannot not spend on their kids,” Cohen said. “They will loosen up their purses and wallets because they won’t send their kids to school with a 2-year-old backpack.”

Still, he said budget-conscious Americans will show a preference for buying “necessities.”

Retailers should also benefit from last year’s easier comparisons for the season. “Back-to-school sales were very late last year. So most merchants are up against much softer year-over-year numbers,” Cohen said.

Catalyst for holiday sales: Cohen and others pointed to a historical correlation between back-to-school sales trends and retailers’ performance over the year-end holidays, which usually account for as much as 50% of stores’ profits and sales for the entire year.

“For me, back-to-school is always the early indicator of the holiday season,” Cohen said.

Ken Perkins, president of sales tracking firm Retail Metrics, agreed. “If back-to-school [sales] are decent, it could become a catalyst for holiday sales,” he said.

“Traditionally back-to-school tends to post stronger same-store sales than the holiday season,” said Jharonne Martis, senior research analyst with Thomson Reuters, which tracks monthly same-store sales for 30 large national chains including Target, Macy’s, J.C. Penney and Costco.

Same-store sales, which measure sales at stores open at least a year, are a key gauge of a retailer’s performance.

Conversely, weakness in sales of school merchandise doesn’t bode well for holiday sales. That was the case last year when same-store sales rose 1.9% over July and August combined, down from 3% in 2007. Subsequently, holiday sales fell 1.5% in 2008 after rising 2.3% the prior year.

Martis said many parents will also “definitely wait” for sales tax breaks before they start shopping for school products.

Last year, 16 states — including Texas, Virginia and Georgia — offered tax-free shopping days, mostly in August, on clothing, computers and general school supplies.

Martis expects three retailers to do particularly well this back-to-school season — Wal-Mart, Aeropostale and Buckle.

“Consumers will go to Wal-Mart for its discount prices,” Martis said. Aeropostale and trendy merchandise seller Buckle will resonate most with teen shoppers, she added.

Clouds linger: But at least one industry watcher isn’t seeing any signs of optimism on the horizon.

Citing tightness in the credit market, Burt Flickinger, managing director of consulting firm Strategic Resource Group, expects back-to-school sales will be 4% to 5% lower than last year.

That said, Flickinger expects holiday sales “will be OK.”

Besides credit issues, Flickinger anticipates higher gas, food and drug prices later this year will put a crimp on sales of discretionary items.

“Consumers are facing much more day-to-day inflation during summer than in spring,” Flickinger said. “I’ve talked to many retail CEOs, and they are not seeing what analysts are seeing.”

“There’s high unemployment, including high teen unemployment. Credit lines are being cut by stores and credit card companies,” he said. “For back-to-school, students and parents will only buy what is needed.”

For further information, visit: http://money.cnn.com/2009/06/10/news/economy/retail_backtoschool/

The Recession: The Reason Behind Retail Slowdown

June 9, 2009

Retail sales in the Tri-Cities declined during the first quarter of 2009 giving the region no respite from the deepening recession.

According to ETSU economists Seb Hipple Kingsport’s sales were down 2.8 percent, Johnson City sales declined by 5.2 percent. Retail sales in Bristol were off 12.3 percent for the quarter.

In comparison, real sales were down 8.9% in Tennessee and 10.2% in the nation as a whole.
The data isn’t much better for the Combined Statistical Area where dollar sales fell sharply – 7.8% to $1,353 million. Adjusted for inflation, retail volume in the Tri-Cities metro area was 7.8% below the same period in 2008.

Hipple’s report says other metro areas of East Tennessee reported the same dismal results during the first quarter. Chattanooga MSA sales revenues fell 8.8% to $1,430 million, while Knoxville MSA sales were down 11.3% to $2,337 million.

In his analysis Hipple says, “during the first quarter, the U.S. economy and the regional economy continued to descend into the worst business contraction in a generation. This appears in all of the various economic indicators – employment, unemployment, output, government deficits, as well as the retail sales covered in this report. And the second quarter will be worse than the first. The economic and business news will continue to be largely negative in the coming months.

“That said, the economy appears to be nearing the bottom point (the “trough”) of this business cycle. The various bits of good news are being called “green sprouts”. What are some significant sprouts? One important item is that the toxic assets in the financial system have declined as the underlying bad mortgages are ended through foreclosure, or refinanced to an interest rate the borrowers can handle. The ongoing restructuring of the financial system is bearing results as routine lending has been resumed. And the residential construction market is showing some signs of revival.

“Most forecasters expect the economic recovery to begin during the third and fourth quarters. But the expectation is that growth in output and retail sales and employment will be modest, and that the level of unemployment and the unemployment rate will continue to increase well into 2010. The jobless rate will exceed ten percent under this scenario.

“Where does this bleak outlook come from? In the last two recessions of 1990-91 and 2001, the recovery phase was very weak and did not create enough new jobs to reduce unemployment – in fact, the unemployment rate continued to increase for more than a year after the end of the recession. These two business cycles were described as “L” shaped since there was no strong recovery.

“The expectation is that the recovery from the 2008-09 recession will also be weak. And since this recession has been very severe (like the 1981-82 downturn), that slow recovery will be starting from a much lower level of economic activity. So it may be 2011 or 2012 before we once again see more normal levels of production and retail activity and employment.

“But there is an alternative scenario that looks to a more vigorous recovery phase (like the recovery in 1982 and 1983). The driving element here is the extraordinary amount of monetary and fiscal stimulus that the central bank and the federal government have pumped into the economy to fend off what was a very real risk of another Great Depression.

“The example here is the deficit spending that the government launched in 1940 and 1941 due to World War II. The unemployment rate going into 1940 was still over ten percent. With the economic stimulus linked to the war, the jobless rate dropped dramatically. While the stimulus today is not at those wartime levels, it is the highest we have ever seen in a peacetime year.”

For further information, visit: http://www.timesnews.net/article.php?id=9014372

Sample Sales Are No Longer Exclusive

June 9, 2009

It’s the summer of the sale. Designers and retailers saddled with extra merchandise that didn’t move because of the economic downturn are trying to get rid of it — at steep discounts.

Last week, Gabay’s Outlet in the East Village (225 First Ave., gabaysoutlet.com) became a temporary downtown Henri Bendel outpost when it received huge shipments of designer denim, dresses and signature Bendel knits from the uptown luxury retailer, all marked down by 50% to 80%.

This month alone promises more than 20 sample sales, including designers like Gucci, Prada and Rag & Bone.

“I think we’re reaching a peak right now,” says Kathryn Finney, founder of thebudgetfashionista.com. Her prediction: This kind of leftover glut won’t happen again!

“I think toward the end of the year, we won’t see that many crazy, wacky sales — not at the level we’re seeing now,” says Finney (above). “I think the recession really took the retail industry by surprise and a lot of retailers have adjusted production for fall/winter.”

She’s got a few tips for maneuvering the bargain basements:

How do you find out about sample sales?

A lot of high-end designers, like Vera Wang, Prada, DVF, Vivienne Westwood and Ferragamo, are marketing their sample sales. In a given week we get 30 to 40 notices of sample and warehouse sales. Prada’s sample on Sullivan St. used to be very exclusive and you had to really be in the know. Now, you don’t have to be an insider. Go to thebudgetfashionista.com/sales for an up-to-date listing.

What kinds of deals are you seeing at sample sales and discount retailers?

There are definitely better deals on more luxury pieces and better selection. It used to be at sample sales that unless you went first day, all that was left was the stuff you didn’t want.

Now it’s actually stuff you want. You can find Ferragamo shoes for $50 to $75, Vera Wang wedding dresses for $300 to $400.

Why are we seeing such steep sales, especially from luxury brands that don’t normally get marked down?

They produced all these things they couldn’t sell, so I think that’s why we’re seeing a lot of these warehouse and stock sales. All the gluttony of things they couldn’t sell six months ago — they’re trying to clear their warehouses.

This was stuff that was made to sell, stuff that is left over in their stock, and they need to move it. It costs money to store the merchandise, and the longer it sits there the more it costs them. So it’s better to get rid of it, which is why you find things at Gabay’s.

Are there still deals to be found shopping at the major department stores?

Department stores are offering coupons, especially if you have a store credit card, because people aren’t using them right now. If you buy at Macy’s with your store card and, say, they’re having a sale in three or four days, you can buy it on sale that day and they’ll ship it to you later when it goes on sale.

You don’t even have to be there for the sale — it’s called a presale. And you can get alterations done under presale. This is what they’re offering in order to generate loyalty.

You can negotiate other perks, like free shipping and free alterations, in addition to the discount. Before you go to any store, you should go to their Web site for coupons.

Lord & Taylor has really good deals. They have sales every week. You can get coupons online (lordandtaylor.com) and you don’t need a store credit card to use them.

For further information, visit: http://www.nydailynews.com/lifestyle/fashion/2009/06/04/2009-06-04_sample_sale_frenzy_.html

Renovating Wal-Mart But Keeping Customer Loyalty

June 9, 2009

The bad times have been good for Wal-Mart Stores, and on Friday, the retailer’s new chief executive said he expected sales to continue to be strong, even after the economy rebounds.

“Our customers will stay with us when this economy turns around and they have more discretionary money to spend,” Michael T. Duke, the president and chief executive of Wal-Mart, told attendees at his first shareholder meeting since taking the helm this year. “We are building long-term loyalty to Wal-Mart.”

Like some other retailing executives, Mr. Duke says he thinks the recession has prompted a fundamental change in consumer behavior — a “new normal” in which people are concerned about saving money.

If true, that bodes well for Wal-Mart, which has built its reputation on low prices.

Wal-Mart’s profit was flat for the three months that ended April 30 — $3.02 billion, or 77 cents a share, compared with the same $3.02 billion, or 76 cents a share, a year ago. Still, its sales at stores open at least a year have outperformed competitors, including its primary rival, Target. During the shareholder meeting, which began promptly at 7 a.m., the actor Ben Stiller, the meeting’s host, quipped, “I hear they’re still sleeping at Target.”

Separately, Wal-Mart announced that it would start a new $15 billion program to repurchase shares. The news sent shares of Wal-Mart up 20 cents, to $51.07.

Media tours of Wal-Mart and Sam’s Club stores on Thursday offered some details about how the retailer planned to hold onto its new customers.

Executives said a new store design and remodeling plan would make Wal-Mart stores more pleasant. They also plan to expand thriving departments, like food and electronics.

The most popular items that families buy — groceries, health and beauty goods, pet products and baby products — will be located on the same side of the store, so customers do not have to trek from one end to another. Shelves will no longer be stacked so high, so stores will feel airier and easier to navigate.

There will be more signs pointing out the low prices of items, wider aisles without freestanding product displays, and, in general, fewer brands so consumers are not overwhelmed by 25 different kinds of toothpaste.

The electronics department — a hit with consumers who want brand names at low prices — will be expanded and will offer more hands-on products so consumers can test technology like portable electronics and Blu-ray players. Also, electronics departments will be located on the back wall of stores so consumers see a wall of sleek TVs when they enter.

The food and produce area, which has helped increase sales in this economy, will also be expanded. Signs that say “fresh” will be near store entrances, along with the take-out food, deli and bakery areas so consumers can dash in and out if they want to. That could cut down on browsing and impulse purchases. But executives said the changes were a response to consumer research.

In a question and answer session after Friday’s shareholder meeting, Eduardo Castro-Wright, Wal-Mart’s vice chairman, said the retailer would retain its new customers by doing what it had been doing the last few years: making its stores friendlier and cleaner, and speeding up the check-out process.

Wal-Mart’s annual shareholder gatherings are spectacles: part vaudeville show, part revival meeting. Smokey Robinson, Miley Cyrus, and this year’s American Idol winner, Kris Allen, performed. The basketball player Michael Jordan spoke. On Wednesday night, Wal-Mart invited store employees from all over the world to concerts by the rock group Foreigner and by Chris Daughtry, a former American Idol contestant.

Amid the hubbub, the retailer said it was beginning an initiative to help promote women at Wal-Mart. Mr. Duke said he was “still not satisfied with our progress to date.”

Wal-Mart also used the meeting to highlight its entry into Chile with D&S, a major grocery chain. Additionally, executives said the retailer would continue using its size to achieve supply-chain efficiencies, recruit top talent and continue down the path toward environmental sustainability, a legacy of its former chief executive, H. Lee Scott Jr.

“Yes, sustainability was personal for Lee,” Mr. Duke said during the question-and-answer session, “but it’s personal for me.”

Wal-Mart surpassed $400 billion in sales for the first time during its last fiscal year. But Mr. Duke’s overriding message on Friday was typical of Wal-Mart’s approach to its business.

“This is not a time to take comfort in our success,” he said. “This is Wal-Mart’s time to look to the future and seize the opportunity to truly lead around the world.”

For further information, visit: http://www.nytimes.com/2009/06/06/business/economy/06walmart.html

Aeropostale Heading Towards Success During the Recession

June 9, 2009

While most members of the U.S. retail industry are focused on cutbacks and survival tactics, Aeropostale continues to defy the recession and post numbers that would be impressive even in the best of economic conditions. The teen apparel chain has been killing its competition, topping the same store sales charts, and rocking Wall Street investors with a 40% rise in stock prices since the recession officially began.

U.S. retailers aren’t the only ones asking how Aeropostale is doing it, and stock analysts aren’t the only ones wondering how long the winning streak will last.

Aeropostale’s CEO, Julian Geiger actually seems very eager to tell people how they do what they do. In an interview with Business Week way back in 2004, Geiger very openly revealed the company’s marketing tactics, which are relentless and somewhat unconventional for an apparel retailer. Specifically, Geiger revealed that the Aeropostale marketing team employs these strategies:

* Following trends instead of trying to be a trendsetter

* Looking at what’s on the backs of their target market, instead of what’s on the sales floors of their competitors

* Observing teens in theme parks, concerts, and airports instead of observing them on the streets of international fashion cities

* Allowing teens to view potential new styles, and stocking stores with the teens’ favorites

* Using 50 locations as test stores where new merchandise and merchandising is tried out prior to system-wide rollout

* Remembering that most teens are fashion followers, not fashion leaders

Either Aeropostale’s competitors didn’t read that interview or, if they did, they weren’t savvy enough to realize the brilliance hidden within the simplicity of the approach.

While cutting edge manufacturing, distribution, and operations management are supporting its success, there’s one timeless retailing principle that’s really the driving force behind the Aeropostale chain. That is, the customers get what they want.

This simple tenet is quite antithetical to the more popular marketing approach of working really hard to convince customers to want what you have, which is a strategy, by the way, that isn’t working very well for any retailer right now. In contrast, Aeropostale has discovered that when you ask teenagers what they want to spend their money on, and then you make those things available, the kids actually bring their money to your store. How radical!

Aeropostale works hard to engage consumers in other ways besides marketing research. This year the store bonded with its youthful customer base at an emotional level with its “Teens for Jeans” charity project. More than 200,000 pairs of “gently used” jeans were gathered and donated by teen customers to be redistributed to their homeless peers. The project was green, it was activist, it was compassionate, and it was the perfect hip program for the store to insert itself into. With its active participation in the project, Aeropostale gave a human dimension to its brand that advertising dollars and publicity hype could never manufacture.

The Aeropostale we see today is miles away from it where it began, as a small department within the Macy’s chain in the 1980’s. After spinning off and floundering, Aeropostale was rescued from obscurity by Geiger, who defined the brand, built the chain’s identity, and gave Aeropostale a unique selling proposition that is clearly uniquely appealing to its niche. It would be great if its birth parent chain could reinvent itself in a similar way.

In June Aeropostale is bucking the recession again, by opening up a new concept store, P.S. Aeropostale, which is really just a younger version of itself. The new stores are aimed at the 7-12 year olds who have been shadowing their older siblings through the Aeropostale stores, but leaving empty-handed. While moms have worked hard to ignore the whines of their younger children, Aeropostale has worked hard to listen to them, and create a whole store based on their pleadings. If the chain continues to employ its own successful strategies with these spinoff concept stores, there will undoubtedly be a second reason for investors to be happy, and for retailers to shake their heads in wonder.

All of this because customers are getting what customers want? It’s hard to believe that it could really be that simple. Perhaps somewhere along the way retailing got more complicated than it ever really needed to be.