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Where To Go For Those Back-To-School Discounts?

July 29, 2009

As consumers strive to save on back-to-school shopping, CheapTweet.com is working with retailers and consumers alike to help locate and deliver the best deals on Twitter for kids’ and juniors’ apparel and accessories, school supplies, and more. CheapTweet is a deals search engine with an engaged community of shoppers who vote on thousands of money-saving deals and coupons from Twitter to form an easily searchable index. CheapTweet also works with retailers to maximize their presence on Twitter with its new CheapTweet Stores feature.

The National Retail Federation’s (NRF) 2009 Back to School Consumer Intentions and Actions Survey conducted by BIGresearch reports that, as a result of the current economy, 56.2 percent of back-to-school shoppers will hunt for sales more often, while 49.6 percent will spend less overall, and 40 percent plan to increase their use of coupons.

At the same time, consumer expectations for how they can interact with brands are changing. A global study conducted by Synovate in conjunction with Microsoft found that consumers regularly engage with brands online. Of the respondents, nearly one-third of 18 to 24 year old consumers talk about brands online and one in five has added branded content to a social media site.

A number of Tier 1 and Tier 2 retailers have responded to these challenges by developing a multi-faceted social media strategy, including working with CheapTweet to extend the reach of their back-to-school deals to CheapTweet’s community of shoppers on Twitter. As a recent AdWeek article states, “Marketers say the stepped-up social-media efforts reflect the fact that the medium is now key to reaching teens, who influence their parents’ purchases.” 1 Leading brands that listen and contribute to these online conversations can leverage valuable opportunities to engage with their customers.

“On Twitter, you live and die by relevance,” said Hayes Davis, Founder and CEO with Appozite, CheapTweet’s parent company. “Brands that are transparent and strategic about how they use social media to communicate with their customers will be the only brands that thrive on Twitter. CheapTweet aligns perfectly with this strategy, since our goal is to help our community save money by engaging with their favorite brands, unlike traditional advertising. Online sellers are recognizing the value of reaching their customers through Twitter and the CheapTweet community, and we look forward to working with many more companies to optimize their Twitter presence.”

For more information, visit: http://www.ismretail.com/index.php?option=com_content&task=view&id=607&Itemid=122

Importance Of Bar-codes

July 26, 2009

The design was straightforward — 59 black and white bars. And the inventors’ objectives were simple enough, too — to speed up the grocery checkout line and give supermarkets a new tool to track their stock.

But the bar code has become much more than that since it was first used to read the price on a 10-pack of Juicy Fruit gum (67 cents) on the morning of June 26, 1974. Now they are used to board airplanes and track packages. Bar codes help people with diabetes calibrate glucose meters and researchers study the pollination habits of bees. They inspired a hand-held video game, Barcode Battler, in 1991.

They even played a role in the 1992 presidential race, when then-President George H. W. Bush, at a campaign stop, seemed surprised by what had already become a technological staple of everyday life.

Today, bar codes are scanned more than 10 billion times a day around the world. And after 35 years, they are both the mundane minutiae of modern life and cultural icons of cold efficiency, identification and control.

“It was cheap and it was needed,” said George J. Laurer, who was already a veteran engineer at I.B.M. in 1970 when he was asked to lead a team assigned to devise a checkout system for grocery stores. “And it is reliable. Those three things probably contributed more than anything else.”

Now 84 and retired, Mr. Laurer continues to be a cheerleader for his invention even as the bar code is challenged by newer and much more sophisticated competitors. Radio frequency identification, or RFID, is one such technology.

RFID uses the same technology as dashboard toll collectors and building access key cards and allows businesses to identify and track specific items without a direct line of sight. But even as big players like Wal-Mart and Procter & Gamble have pushed ahead with the RFID technology, the cautious retail business, in particular, has pushed back, in part because of concerns about price.

Bar codes, after all, cost just half a cent each, while the electronic tags used in RFID cost more than 5 cents each. As a result, a significant portion of Wal-Mart’s suppliers rejected its mandate to adopt the newer technology.

“The technology took a bit of a black eye,” said Bob Sanders, a Motorola executive who once led a company that developed the first hand-held bar code scanner. A Wal-Mart spokesman, John Simley, acknowledged that “we hit realism” after the initial surge of “media-generated hype” for RFID in 2003. But he said Wal-Mart continued to introduce the technology.

Bar codes have evolved to respond to the competition. In recent years, two-dimensional matrices, which resemble jumbled checkerboards and carry much more information than bar codes, have come into use in Japan and have gained a foothold in America. Cellphones equipped with technology for scanning those patterns can read them and display bar codes that could, for instance, be used instead of a ticket for a concert or board a plane.

Mr. Laurer recalled that several designs, including a circular symbol, were considered before the team settled on what is now recognized as the Universal Product Code, the name of the familiar format that uses 30 black and 29 white lines to convey 12 bits of data in binary code. The 12 digits give nothing more than “an address to look up information” in a database, Mr. Laurer said.

When the initial design was proposed to a committee of reviewers at the Massachusetts Institute of Technology in 1972, he said, it was returned with only one recommendation: that the font of the “human readables,” the numbers found below the bar code, be changed to another font that was soon expected to become readable by machines and to supplant the striped pattern.

“They were absolutely sure that within a few years no one would be reading the bar code,” Mr. Laurer said. “Well, they were wrong.”

Mr. Laurer said neither I.B.M. nor any of its developers ever patented the bar code, though manufacturers pay a minimal annual fee to a nonprofit group, GS 1, to cover the administrative costs of overseeing the international standards.

Sharon Buchanan was a 31-year-old cashier at the Marsh supermarket in Troy, Ohio, the day the bar code made its debut. One or two other clerks were working that day, but she was chosen to work the checkout, she said Thursday in an interview.

“I was a little bit nervous at the time,” she said. “I mean what if this doesn’t work? Everybody was there taking pictures, the photographers, the local press, people from around town. But it worked just fine. It was quite my 15 minutes of fame, I suppose.”

For all the excitement that day, the adoption of the bar code was gradual. For years, businesses were hamstrung by shoppers who refused to buy bar-coded products, worrying that they might be cheated at the checkout counter without price labels.

At the time, “the vision of the bar code as some sort of surveillance device with ominous social implications was quite resonant,” said T. J. Jackson Lears, a cultural historian at Rutgers University. But with the advent of Google Earth and global tracking devices, “it now seems comparatively innocuous.”

The bar code “has almost acquired a certain antique appeal as an early expression of the sorting and categorizing impulse in computer-driven marketing and sales,” he added.

It seems, he said, “in some ways a charmingly archaic icon.”

For further information, visit: http://www.cnbc.com/id/31566093

Bed Bath & Beyonds profit rises

July 25, 2009

Bed Bath & Beyond Inc posted an unexpected rise in quarterly profit by cutting costs to offset slumping demand for home furnishings, and the retailer’s shares rose more than 6 percent.

“The beat really was on the expense line although they had good operating performance across the board,” said Bernstein analyst Colin McGranahan, who has an “outperform” rating on the stock.

“They have absolutely tightened the labor model up. I think they’re reducing advertising costs, which had gone way up.”

Net income for the fiscal first quarter ended May 30 rose to $87.17 million, or 34 cents per share, from $76.78 million, or 30 cents per share, a year earlier, Bed Bath & Beyond said on Wednesday.

Analysts, on average, were expecting earnings of 25 cents per share, according to Reuters Estimates, which would have meant a decline in profit compared with a year earlier.

Sales rose 2.8 percent to $1.69 billion as it opened more stores, but sales at stores open at least a year, a key retail measure known as same-store sales, fell 1.6 percent.

Selling, general and administrative expenses declined to $524.5 million in the quarter from $537.18 million a year earlier.

The company also said it expected its second-quarter earnings per share to rise to 42 cents, with fiscal 2009 earnings per share expected to be $1.59.

Capital expenditures are expected to be around $250 million for the 2009 fiscal year as Bed Bath & Beyond upgrades its information technology equipment, refurbishes old stores, and opens about 57 new stores.

Depreciation for the 2009 fiscal year is expected to be about $180 million. the company said.

“We are confident that we will be able to look back at this period as one that afforded us an exceptional opportunity to gain market share and to improve our competitive position,” company executive Steven Temares said during the company’s quarterly conference call.

Bed Bath & Beyond and peers like Pier 1 Imports Inc and Williams-Sonoma Inc have seen sales weaken as the crumbling U.S. housing market erodes demand for the home furnishings that they sell.

Bed Bath & Beyond has sought to battle the recessionary environment by cutting costs and scaling back expansion plans. In the first quarter, it opened six Bed Bath & Beyond stores, one Christmas Tree Shops store, and one buybuy Baby store. It also closed one Bed Bath & Beyond store.

McGranahan said the results show Bed Bath & Beyond has gained market share since former rival Linens ‘n Things closed its doors after filing for bankruptcy protection last year.

The loss of a major competitor means that Bed Bath & Beyond no longer needs to distribute as many coupons as it did in the past to get shoppers into its stores, helping to lower expenses, the analyst said.

Shares rose 6.4 percent to $30.20 after closing at $28.39 on the Nasdaq.

For further information, visit: http://www.ibtimes.com/articles/20090624/bed-bath-beyond-posts-surprise-rise-in-profit_1.htm

Retail Sales Rise; Wall Street Goes Up

July 25, 2009

U.S. stocks rallied on Thursday on investors’ relief that Federal Reserve Chairman Ben Bernanke was weathering a tough grilling in Congress relatively well.

Consumer discretionary shares had led stocks higher from early in the session, on positive news from the retail and home-building sectors that triggered a rally in the shares of home builder Lennar Corp and retailer Bed, Bath & Beyond.

The U.S. House of Representatives Oversight and Government Reform Committee questioned Bernanke on the Fed’s role in Bank of America’s takeover of Merrill Lynch, and whether he pressured BofA’s CEO Ken Lewis to go through with the deal after Lewis raised objections.

As the testimony wore on, however, analysts’ concerns faded and stocks sharply extended gains.

“There could have been a little apprehension ahead of this that Bernanke truly was in on forcing Bank of America (to buy Merrill), but that seems to have been blown a little out of proportion,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research in Cincinnati, Ohio.

“Nothing out of the ordinary is being reported so we’re getting a relief rally.”

The Dow Jones industrial average .DJI gained 138.15 points, or 1.66 percent, to 8,438.01. The Standard & Poor’s 500 Index .SPX rose 15.64 points, or 1.74 percent, to 916.58. The Nasdaq Composite Index .IXIC added 29.20 points, or 1.63 percent, to 1,821.54.

Home builder Lennar Corp posted a wider quarterly loss, but reported an increase in new home sales and orders. Its stock shot up 14.2 percent to $8.94.

The Dow Jones U.S. home construction index .DJUSHB jumped 4.1 percent.

Retailer Bed Bath & Beyond Inc reported a surprising increase in quarterly profit as it cut costs to offset slumping demand, and its stock soared 10 percent to $31.24.

Another bright spot among retailers was J.C. Penney Co Inc, up 6.1 percent at $28.223 after JPMorgan raised its rating on the stock to “overweight” from “neutral.

The S&P retail index .RLX shot up 3.4 percent.

The broad S&P 500 has climbed as much as 40 percent from March’s 12-year closing low on hopes the economy was stabilizing, but jitters over the strength of a potential recovery have stalled the rally recently. The S&P 500 is up about 36 percent from that trough.

For further information, visit: http://www.reuters.com/article/hotStocksNews/idUSTRE5501YF20090625

What Works? Wal-Mart’s Roll-back Prices

July 24, 2009

With the recession in its 18th month and unemployment now topping 9 percent, even semi-conspicuous consumption is a distant memory. Consumers are hunkered down. But when they do venture out, chances are they’re on their way to places like Wal-Mart and other big discount chains.

“Our sales — it’s like holding up a mirror to our society,” said John E. Fleming, the chief merchandising officer for Wal-Mart, the nation’s largest retailer.

So what are Wal-Mart, with 4,100 stores across the country, and other major retailers seeing?

Less browsing in the aisles, for one thing. Consumers now are “very disciplined in terms of making sure that they don’t go beyond what they have on their lists,” Kathryn A. Tesija, Target’s executive vice president of merchandising, told investors recently.

Food, of course, is high on those lists (discretionary items like clothes and furniture are not). But consumers are cracking their wallets only so far. Many are trading down to private label groceries. At Wal-Mart, sales of refrigerated pizza were up last month compared with a year ago. Lower grades of meat are outselling the higher-grade, pricier cuts. A recession protein hierarchy has emerged, with ground beef trumping steak, and chicken trumping beef. Some consumers are forgoing protein altogether, opting for pasta.

“We’re seeing a movement away from protein into carbohydrates,” Mr. Fleming said. “It stretches the dollar a lot further.”

Retailers generally don’t divulge details of their sales by category of goods. But they were willing to discuss trends. One stood out: consumers are discovering there’s no place like home.

“This whole idea of staying home and entertaining at home, we’re seeing that everywhere,” Mr. Fleming said, “from the ‘take and bake’ pizza to the $5 movies.” Ms. Tesija noted that “sales of popcorn poppers and microwave poppers are very strong.”

Retailers say consumers are trying to make being cooped up as painless as possible. Mr. Fleming said that would explain why even in this economy, sales of flat-panel and high-definition televisions at Wal-Mart are strong. After all, the retailer’s $378, 32-inch RCA LCD television is more affordable than a vacation. (Which may be why retailers like Macy’s say luggage sales are among their weakest categories.)

Home Depot’s Craig Menear, executive vice president for merchandising, told investors recently that vegetable and herb sales were thriving because “more customers are opting to grow their own vegetable gardens.”

Car maintenance and repair is also big. Sales of motor oil, filters and tires are among Wal-Mart’s top sellers. “Anything that helps their car last longer is doing well because they’re not buying new cars,” Mr. Fleming said.

Consumers are spending to keep themselves in good health too, for fear of having to miss work. Wal-Mart said sales of vitamins are robust. So are sales of over-the-counter medications. Sales of sleep aids, pain relievers and antacids have spiked.

Home repair projects are also a priority. Home Depot’s basic repair and maintenance products — plumbing items, roofing materials, caulk — have sold better than other items.

At Wal-Mart, sales of baby formula and clothing are up. Still, Mr. Fleming said Wal-Mart could tell when parents were strapped: in the first weeks of the month they buy packs of 88 diapers; by the end of the month they’re buying the 40-pack. And at Sam’s Club, sales of pull-ups — that intermediate step between diapers and underwear — are down, suggesting parents are moving their children directly to underwear to save money.

The bottom, apparently, has met the bottom.

For further information, visit: http://www.nytimes.com/2009/06/07/weekinreview/07rosenbloom.html

Recession Means Increased Retail Crime

July 24, 2009

Retailers and consumers are becoming more victimized by organized retail crime groups, according to the National Retail Federation’s fifth annual Organized Retail Crime survey.

Nine out of 10 retailers (92%) report that their companies were victims of organized retail crime during the past year, up 8% from the prior-year period, the report said.

Nearly three-fourths (73%) of retailers also reported the level of organized retail crime activity has increased over the past 12 months, an increase of 11% from 2008.

“The unfortunate economic events of the past year have played an intricate role in how criminals continue to rip off the retail industry,” said Joe LaRocca, NRF senior asset protection advisor. “Organized retail crime rings have realized that tough economic times present new business opportunities by stealing valuable items from retailers and turning around to sell the merchandise to consumers looking for bargains.”

Even with the economy forcing retailers to cut staff and do more with less, 42% of retailers said their company is allocating additional resources to address organized retail crime. According to the survey, the average retailer spends approximately $215,000 annually just on labor costs to fight organized retail crime. Some retailers surveyed spend far more, with 6% of respondents spending more than $1 million dollars a year to employ loss-prevention executives devoted to organized retail crime.

When asked how they would rank organized retail crime as a threat to their company, nearly one-third (29%) of retailers gave organized retail crime a “four” or “five” rating, identifying the problem as severe or significant. On average, retailers gave organized retail crime a rating of 2.87 on a five-point scale.

For further information, visit: http://www.chainstoreage.com/story.aspx?id=106759&menuid=437

Retailers Are Buying Less To Increase Profits

July 23, 2009

Saks CEO Stephen Sadove said Monday that the company is aiming to order at least 20% less from its vendors in 2009 and forecasts a subsequent jump in gross margin, according to a report by Bloomberg.

The cuts may curb what Sadove has described as the “enormous excess” that existed last year in the luxury retail category.

“Across the board you are going to find less of the sizes, less of the availability in almost all of the categories,” Sadove told Bloomberg. “You are probably going to see less aggressive markdowns than you saw last year.”

Neiman Marcus cut its orders 25% in the quarter ended May 2 and said on June 10 that it is being “conservative” for the rest of the year. Both Neiman and Saks have said they are weeding out underperforming labels.

Nordstrom and Cincinnati-based Macy’s have said they are buying less, too.

For further information, visit: http://www.chainstoreage.com/story.aspx?id=107905&menuid=437

Amazon.com Acquires Zappos

July 23, 2009

In a 2008 article appearing in the E-Commerce Times, Gartner’s vice president of research, Gene Alvarez, had this to say about online shoe retailer Zappos: “Zappos is the Amazon of the shoe business, and its model is extremely difficult to mimic.”

How right he was.

Amazon.com has scooped up Zappos in an acquisition deal that now combines two of the market’s leaders in online retail and online footware sales. The deal has Amazon.com exchanging 40 million shares of Amazon stock (nearly $900 million at current trading values) for all of Zappos’s outstanding shares, options, and warrants. The company will also contribute $40 million in cash and restricted stock to Zappos employees.

While that’s all well and good from a financial perspective, the bigger question remains unanswered: What happens to my free two-day shipping? I joke, but only as much as I need to convey the cultural oil and water that seems to exist between the internal philosophies of these two companies.

Dueling Incentives

When’s the last time Amazon, out of the blue, decided to upgrade your purchased merchandise to a faster delivery option? Sure, you can try out Amazon Prime for expedited shipping. And the company does indeed offer free shipping for orders you place above the $25 mark–but don’t think that this calculated sales incentive is anything but. Amazon’s return policy on apparel? You get 30 days, period.

My frequent interactions with Zappos (disclaimer: I wear a size 16) have often brought forth upgraded shipping options and discounts that seemingly arrive out of the blue. Again, a calculated move by Zappos, but it just further illustrates where both companies come from in regards to how they perceive and/or promote customer loyalty.

Amazon is more than happy to offer incentives provided you’re willing to pay the price: $25 per order or $79 for a yearly subscription to its two-day shipping service, Amazon Prime. Zappos, on the other hand, surprises you with the carrot of free shipping upgrades regardless of what, or how much what, you’ve purchased. And the company’s return policy on shoes? A full calendar year — 365 days.

A Size 15 of Social Media

The dissimilarities don’t just end there. Just consider at each retailer’s social presences. Amazon’s Twitter feed follows all of 12 users. Its content consists of one-line descriptions of a product to check out (or, occasionally, a breaking news element or funny Internet meme). Number of customers engaged? Zero, as Amazon doesn’t reply Twitter users — at least, I could find no evidence of such dating back to April 1, which is right around when I became extremely bored.

In fact, Amazon seems so out of touch with the self-titled “Twitterverse” that it even refuses to pay affiliate commissions for shortened links to products that you promote via the service. That’s right. A tinyurl or is.gd link violates the company’s terms and conditions for the affiliate program — not exactly the best way to embrace a new technology or social service.

Zappos, in contrast, thrives on Twitter and the customer engagement the service promotes. As of this article’s writing, the official Zappos Twitter feed has 1,022,125 followers, making it the second-largest retail presence on twitter behind Whole Foods. More importantly, Zappos itself follows 406,641 people–factor in retweets, and Zappos could presumably contact half-a-million fans with a message in seconds.

If you don’t think this presence is of any importance, well, perhaps you’d like to strike up a conversation with Dell. The company’s delloutlet account has single-handedly cleared more than $2 million in sales, and even a dell employee notes that “Tony rocks” (Zappos’s CEO). It’d be hard to argue that a thriving Twitter presence wouldn’t have done Amazon wonders during the big amazonFAIL controversy from three months’ back.

I could continue on through the cursory list of Web 2.0 platforms. YouTube? Zappos has uploaded 117 unique videos that resulted in 32,622 views for its official channel. Its video content, ranging from Zappos employees playing guitar solos to “A day in the life of…” segments, has reached up to 100,000 views for an individual video. Amazon? Um. This isn’t Amazon. I can’t find any official Amazon presence on YouTube at all. Facebook is the only “big three” platform where Amazon tops Zappos by 4,929 fans to 1,467. That’s ultimately balanced out by Zappos’s big MySpace win: 6,181 fans to Amazon’s goose egg.

Checking Zappos’s Product Description

Why all the numbers? Because Amazon hasn’t purchased a new shoe store; it has purchased a culture. Marketing pundit Seth Godin puts it best: Amazon already has substantial resources and leverage in the online buying and shipping space. It lacks the corporate culture and one-to-one customer connections that Zappos brings to the table.

Zappos wins a long-term retail strategy and significant investor return out of the deal; Amazon gets a chance to see how social media and the opportunity to build out a new social investment on the back of an 800-pound gorilla. Customers? Well, maybe Amazon will Tweet a coupon or two their way. I wouldn’t hold my breath.

For further information, visit: http://www.pcworld.com/article/168887/amazon_and_zappos_oil_and_water_of_retail_culture.html

A Nordstrom In Manhattan, Too?

July 21, 2009

Seattle-based Nordstrom, Inc., a leading fashion specialty retailer, announced it will open a 32,136 square-foot Nordstrom Rack, a unit of the company’s off-price retail division, in Manhattan at One Union Square South on 14th Street between Broadway and Fourth Avenue on the south side of Union Square Park. Scheduled to open in spring 2010, this will be the retailer’s first Nordstrom Rack in Manhattan.

“We’re pleased to announce the first Manhattan Nordstrom Rack,” said Scott Meden, president of Nordstrom Rack. “This is a rare opportunity that opened at the right time for us. Union Square is a thriving retail area and is an ideal location for the city’s first Rack. When we open for business next spring, customers can expect to find savings on merchandise from many of the same brands carried at Nordstrom stores.”

Nordstrom Rack carries merchandise from Nordstrom stores and Nordstrom.com at 50-60% off original Nordstrom prices. Nordstrom Rack also offers a wide selection of apparel, accessories and shoes from many of the lines carried in Nordstrom stores and purchased specially for Nordstrom Rack, with most at savings of 30-70% off.

In the tri-state area, the company currently operates eight Nordstrom stores and three Nordstrom Racks.

“Nordstrom is one of the nation’s leading fashion retailers and we are delighted that they have chosen

Union Square, one of New York City’s most desirable commercial destinations for their first Manhattan Nordstrom Rack store. Related has played a key role in the revitalization of Union Square for over a decade and we are proud to continue to contribute to the transformation of the area,” said Jeff T. Blau, president of Related Companies.

One Union Square South consists of a 22-story luxury residential rental tower located above a five-story retail block that includes Regal Cinemas and several other prime retail spaces. The building’s facade features a public artwall containing the mixed-media Metronome by Andrew Ginzel and Kristin Jones that was at the time the largest private commission of public art in New York City’s history. Nordstrom Rack at One Union Square South will have 30 feet of street level storefront and will occupy the lower level of the former Virgin Megastore. Also joining Nordstrom at One Union Square South is Best Buy, which is expected to open in the former Circuit City space during the fourth quarter of 2009.

One of the most vibrant districts in New York City, Union Square is a dynamic center of food and fashion, culture and cutting edge businesses. The approximately 12,000 businesses located within a half-mile radius of Union Square employs about 140,000 people. Union Square is home to the City’s oldest Greenmarket, a beautiful historic park, and hundreds of restaurants and shops.

Nordstrom, Inc. is one of the nation’s leading fashion specialty retailers, with 175 stores located in 28 states. Founded in 1901 as a shoe store in Seattle, today Nordstrom operates 111 full-line stores, 61 Nordstrom Racks, two Jeffrey boutiques and one clearance store.

For further information, visit: http://news.prnewswire.com/ViewContent.aspx?ACCT=109&STORY=/www/story/07-21-2009/0005063554&EDATE=

Consumers Spending Less On Clothes For This Year’s Back-To-School Shopping

July 21, 2009

Higher-end retailers and clothing stores nationwide are expected to see another year of declining sales during 2009’s important back-to-school season, the consulting firm Deloitte said Monday.

Sixty-four percent of respondents to an online survey that Deloitte conducted earlier this month said they plan to spend less money than last year on back-to-school items. Forty-three percent said they will cut back spending by more than $100, and 81 percent said they specifically plan to pare back clothes-buying.

The results show a slight bit more optimism than last year, when 71 percent of respondents said they would scale back purchases. But considering that consumers are anticipating closing their wallets even more after an already down year, some stores could be hit hard, said Dave Rooney, who leads Deloitte’s consumer business practice in Colorado.

“Folks are going to focus on necessities, necessities sort of being in and niceties being out,” Rooney said. “Discounters and the dollar stores are going to do well. And higher-end retailers and clothing stores will bear the brunt of this (spending decrease).”

Back-to-school sales typically make up about 15 percent of retailers’ total sales, making it the second most important season of every year behind the Christmas season.

Though it is a less discretionary season than in December — school children have to have a certain amount of items to begin the year — many retailers look at it as an indicator of what is to come, Rooney explained.

According to the 1,044 U.S. consumers polled for the survey, 70 percent said that economic conditions will impact their buying behavior. The biggest ways in which that will play out include people looking to buy more items on sale (74 percent), buying only what their family needs (65 percent), buying more lower-priced items (55 percent) and using more store coupons (55 percent).

Almost half of the respondents — 45 percent — also said they plan to shop at less expensive stores than they usually do. Discount stores like Wal-Mart and Target are likely to be the beneficiaries of such consumer down-scaling, Rooney said.

Clothing was by far the item that respondents felt likely to cut back on the most, followed by shoes (49 percent) and supplies (32 percent). However, 41 percent of customers, about the same percentage as last year, said they still will seek out “green” products, which are typically more expensive than other products.

While shoppers last year were cautious in their spending mostly because of the escalating prices of gas and food at the time, this year’s jitters revolve around the unemployment rate, which has hit 7.6 percent in Colorado. Twenty-two percent of survey respondents indicated that someone in their household had lost a job, while an additional 17 percent expressed fears of job loss.

Also, 32 percent of those surveyed said they are saving more money, a boost of 10 percentage points from last year and a figure that Rooney used to argue that the changes in back-to-school buying habits may be permanent rather than temporary.

“To the extent that people have extra money nowadays, they’re saving that money, where in the past they used to tend to spend it,” he said.

The Deloitte survey came six days after the National Retail Federation released a survey predicting that back-to-school spending will decline 7.7 percent this year. The average family is likely to spend $548.72 on school merchandise, compared to $594.24 in 2008, that survey stated.

“The economy has clearly changed the spending habits of American families, which will likely create a difficult back-to-school season for retailers,” NRF President and CEO Tracy Mullin said in a news release. “As people focus primarily on price, strong promotions and deep discounts will ultimately win over back-to-school shoppers this year.”

For further information, visit: http://www.bizjournals.com/denver/stories/2009/07/20/daily14.html