MACY’S ANNOUNCES Q4 SALES DECLINED 5.2%; LOOKS FORWARD to 2016 EXPANSION

For the period ending January 30, 2016, Macy’s total sales declined 5.2% to $8.87 billion. Same-store sales fell 4.3%, slightly less than the 4.7% decrease analysts were expecting. Macy’s did announce it had another year of double-digit growth in its online business, attributed to high increases in mobile traffic and conversions.  In looking back on the year, chairman and CEO, Terry J. Lundgren, pointed out many expansion initiatives. “We expanded our online capacity with a new state-of-the-art fulfillment center in Tulsa, Oklahoma,” he said. “We announced licensed department arrangements with companies including LensCrafters, Men’s Wearhouse and Best Buy to add new categories to the Macy’s store assortment. We completed the acquisition of Bluemercury, which added capabilities to our signature beauty business. We developed and launched Macy’s Backstage, which will be piloted as an in-store concept this spring. And we began initial testing of online selling in China in a new joint venture with a Hong Kong-based partner.” Macy’s has $400 million of planned cost savings and will have more conservative inventory planning in 2016 to improve its operating margins. It does expect to see a 1% comp-stores decline in 2016.

Source: Chain Store Age

Cool Start to Retail Spending Predicted in January

With many Americans suffering from a holiday-spending hangover, it’s not surprising when we see a lull in spending in January. Coupled with abnormal weather conditions across the country and an uncertain economy, consumer spending is likely off to a slow start this month.

The Chain Store Guide (CSG) Retail Spending Index saw its largest decrease since July of 2015 when it dropped 1.4 points to 101.3 in December. This decline led CHG to forecast low spending in January and an overall slow start to 2016.

The long-term outlook for 2016 is more positive, according Kiplinger’s. They predict that retail sales will expand by a healthy 4.4% in 2016, up from 2015’s 3.2% growth.

Bargain Hunters Holding Out For Hot Holiday Deals

November 12, 2014

Procrastinators and bargain hunters alike are taking their time getting started with their holiday shopping bonanza, possibly to take advantage of deeper discounts over Thanksgiving weekend and late in the season.  According to NRF's Holiday Consumer Spending Survey, 45.6 percent of holiday shoppers say they haven't started shopping yet, relatively flat with last years' 46.2 percent but the lowest in the sruvey's seven-year history.

"Many consumers are going to wait and see how great the promotions will be later this season before making any commitments," said NRF President and CEO Matthew Shay.  "Retailers have reacted to this 'wait and see' mentality with fewer October deals and a much quieter entry into November, when we'll start to see retailers ramp up with offers for exclusive merchandise, deep discounts and unique online savings opportunities."

The survey found that while slightly fewer people haven't started shopping yet, 20.6 percent have finished 10 percent or less of their shopping, while 12.4 percent have completed about one-quarter of their lists; 2.2 percent are saying they can sit back and relax as they have already finished their shopping for friends and family.

Unsurprisingly, apparel, toys and video games will be popular gift items this year.  The survey found six in 10 (60.9%) will buy clothing and accessories, 46.3 percent will buy books, CDs, DVDs and video games, and two in five (42%) will buy toys.  Likely having loaded up on wearable technology items and new smartphones throughtout the year, slightly fewer people will buy electronic items as gifts (30.7% vs. 33%).  Some people are in for a real treat: 24 percent of shoppers will buy jewelry for a friend or family member, the highest percent since 2006.  Gift cards continue as a favorite for both shoppers and recipients as six in 10 (60%) will buy gift cards, similar to the 59.2 percent who planned to do so last year.  In an October NRF survey, 60 percent of shoppers also said they'd like to receive gift cards, making gift cards the most requested gift item for eight years in a row.

Shoppers look for inspiration for gifts from every corner, and with the innovative creation of retailers' wish lists, many consumers this holiday season will take to the web to point loved ones to specific, perfect gift ideas.  The survey found 32.1 percent say they will look for inspiration on wish lists, up from 28.8 percent last year.  Others will conduct online searches (47.7%), discuss options with family and friends (41.7%), check out advertising circulars (34.3%) and email advertisements (20.1%), and even search Facebook (10.6%).

"Retailers make holiday shoppers' job easy with so many options to find the perfect gift, and with little room to waste on gifts that don't make sense, consumers today want to be sure what they buy is used and enjoyed by their loved ones.  On the hunt for bargains, quality merchandise that is unique and even exclusive, gift givers this holiday season will seek out both practical and indulgent gift items, though being sure not to break the bank."

When it comes to how shoppers will pay for their gifts, nearly four in 10 (38%) will use their credit card, the most in the survey's history and up from 28.5 percent last year; one in five (21.6%) will use cash and 38.4 percent will use their debit or check card.  Just 2.1 percent will use a check, the lowest in the survey's history.

When broken down by age group, young adults ages 18-24 are the least likely to use credit to pay for gifts at just 17.7 percent, and 65+ are the most likely to use credit cards at 56 percent.  Nearly half of 18-24 year olds (48.9%) plan to use their debit or check card to buy gift items.

Source: Retailing Today 

Retail Industry Adds 22,100 Jobs In October

November 7, 2014

According to the National Retail Federation, retail industry employment increased by 22,100 jobs in October.  Employment gains were broad and consistent in most retail categories, especially in general merchandise stores, which saw an increase of 11,900 jobs.  NRF figures do not include automobile dealerships, gasoline stations or restaurants.

"Today's solid employment report is an indication that the economy is on firmer turf heading into the all-important holiday shopping season," NRF Chief Economist Jack Kleinhenz said.  "Retail employment growth was broad based with marked increases in a cross section of categories and positions."

"With the labor market steadily improving and hiring increasing, we should witness a corresponding lift in business activity and consumer spending," Kleinhenz said.  "The economy is progressing toward sustainable growth with employment gains key to improved confidence and self-reinforcing economic growth."

NRF forecasts that retailers and merchants will hire between 730,000 and 790,000 seasonal workers this holiday season.

Source: National Retail Federation

Holiday Shopping To Decrease 7.5%

October 7, 2014

The 2014 holiday shopping season will be characterized by cautious spending, while economic realities create one of two American holiday shoppers - survivalists and selectionists - according to a new report released from PricewaterhouseCoopers U.S. and Strategy, titled "2014 Holiday Outlook: Top trends, consumer behaviors and implications for retailers."

The report was based on a survey of more than 2,000 shoppers nationwide and was far different from the National Retail Federation's bullish seasonal spending forecast.

"The upcoming holiday shopping season will look very similar to 2013 as shoppers remain cautious on the economy and are concerned about disposable income, the rising cost of living and insufficient salary, leading surveyed participants to project an average household spend of $684, down from $753 in 2013," stated Steven Barr, PwC's U.S. retail and consumer practice leader.  "The spending divide among shoppers is widening, creating two distinct groups that we are tracking - survivalists and selectionists - and retailers must cater to both segments.  And with shoppers coming to expect a seamless omnichannel experience, deals to woo them into stores and having no tolerance for another season of data privacy invasion, it's a complex retail landscape that retailers need to master - or they risk losing loyal shoppers."

10 trends are expected to drive the 2014 holiday shopping season:

1. Shoppers express strong overall concerns about holiday shopping, as they remain cautious on the economy with 72% believing a same or worse environment when compared to the year before.
2. The 2014 holiday shopper is segmenting into two distinct groups: survivalists - those making under $50,000 per year, representing 67% of American shoppers; and selectionists - those making more than $50,000 per year, representing 33% of American shoppers.
3. Spending drivers are clearer than ever this holiday season, with as many as 84% of shoppers citing best practices as the main reason for choosing a place to purchase gifts (up from 74% in 2013).
4. Expect more channel fragmentation as shoppers budget for not only dollars, but their time.
5. It will be important to understand the cash/credit position of shoppers during the entire season.
6. The 3 S's of shopping - searching, showrooming and selection - have become permanent.
7. Shoppers are clear about what they will spend their holiday dollars on, making it critical for retailers to differentiate within those categories.
8. Shoppers recognize that experiences are beginning to count just as much, or more, than gifts.
9. Shoppers plan to shop at multiple stores as well as websites.
10. Retailers have significantly upped their game in planning for and investing in improved in-store and omnichannel experiences.

"With consumers having even higher demands for their shopping experience - no matter the channel - we conducted this survey to better understand how retailers can meet the needs of their shopping habits this holiday season," Barr said.  "What we learned was that to compete effectively at retail this year, it demands a new level of organizational and operational excellence."

Source: Retailing Today

NRF Forecasts Seasonal Employment To Grow Between 725,000-800,000

October 7, 2014

According to NRF, retailers are expected to hire between 725,000-800,000 seasonal workers this holiday season, potentially more than they actually hired during the 2013 holiday season (768,000).  Seasonal employment in 2013 increased 14 percent over the previous holiday season.

"These holiday positions offer hundreds of thousands of people the opportunity to turn their seasonal position into a long-term career opportunity in retail," said Shay.

Source: National Retail Federation

Optimism Shines As NRF Forecasts Holiday Sales To Increase 4.1%

October 7, 2014

Holiday sales are projected to grow at their fastest level in years, rising 4.1% to nearly $617 billion after a 3.1% increase last year.

The bullish seasonal spending forecast follows an uneven sales performance at the beginning of the year and a 3.1% increase during the 2013 season.  Online holiday sales are expected to increase between 8% and 11% to as much as $105 billion.  Holiday sales on average have grown 2.9% over the past 10 years, including 2014's estimates, and are expected to represent approximately 19.2% of the retail industry's annual sales of $3.2 trillion.  This would marke the first time since 2011 that holiday sales would increase more than 4 percent.

"Retailers could see a welcome boost in holiday shopping, giving some companies the shot in the arm they need after a volatile first half of the year and an uneventful summer," said NRF President and CEO Matthew Shay.  "While expectations for sales growth are upbeat, it goes without saying there still remains some uneasiness and anxiety among consumers when it comes to their purchase decisions.  The lagging economic recovery, though improving, is still top of mind for many Americans."

"Recognizing the need to keep household budgets in line, we expect shoppers will be extremely price sensitive as they have been for quite some time.  Retailers will respond by differentiating themselves and touting price, value and exclusivity," continued Shay.

While consumer confidence has been unstable much of the year, improvements over the past few months in key economic indicators will give way to increased spending power among holiday shoppers.  Retail sales, jobs and housing data all point to healthy gains.

"Though we have only seen consumer income and spending moderately - and erratically - accelerate this year, we believe there is still room for optimism this holiday season," said NRF Chief Economist Jack Kleinhenz.  "In the grand scheme of things, consumers are in a much better place than they were this time last year, and the extra spending power could very well translate into solid holiday sales growth for retailers; however, shoppers will still be deliberate with their purchases, while hunting for hard-to-pass-up bargains."

Sources: Retailing Today, National Retail Federation

July 2014 Retail Sales

August 13, 2014

Facing slight headwinds from economic pressures and mounting concerns over global unrest, consumers in July cut back on discretionary spending, reflecting a trend that shows many are juggling their spending between goods and services.

NRF retail sales in July, which exclude autos, restaurants and gas, were largely unchanged over June, increasing 0.1 percent; year-over-year unadjusted sales increased 4 percent.  The Commerce Department said on Wednesday, July retail sales, which had increased 0.2 percent in June, were flat over the previous month and up 3.7 percent unadjusted year-over-year.  Much of the unexpected weakness came from a lack of spending in key areas such as furniture, home furnishings and electronics stores.

June and July's combined year-over-year growth averages approximately 4 percent, which NRF's Chief Economist Jack Kleinhenz believes is still on track to meet expectations of annual sales growth of at least 3.9 percent for the remainder of 2014.

"Overall, I still believe the economy and the consumer are headed in the right direction as consumer fundamentals such as positive income, employment and confidence remain relatively sturdy," said Kleinhenz.  "Retailers right now are witnessing a choppy pattern of spending, choosing between large ticket items and other discretionary purchases, with services they may need.  Families today are still displaying behavior tht shows they continue to struggle with purchase decisions, based on needs versus wants.  It is also evident some consumers are cautious about leveraging up credit to support purchases."

Sales in July were up against a strong showing in July 2013, making comparisons slightly more difficult.  Specifically, electronics stores sales decreased 0.1 percent over June and increased 1.3 percent year-over-year; sales at apparel and accessory stores increased a solid 0.4 percent over June and 2.7 percent year-over-year.  Health and personal care stores' sales increased 0.4 percent seasonally adjusted over last month and a healthy 7.2 percent year-over-year.

Source: Retailing Today

Top 2014 Back-To-School And College Trends

Source: National Retail Federation

Retailers Ready For Solid Second Quarter

April 18, 2014

Those looking to understand how the retail industry will perform in the second quarter and beyond can gain an interesting perspective from the outlook shared by one of the world's largest diversified packaging companies.

First quarter sales in the display and packaging division at Sonoco increased 6% to $153 million and operating profits grew 53% to $5.4 million, while sales in the consumer packaging segment were essentially flat at $465 million but operating profits grew 14% to more than $48 million.  The performance of both divisions helped the company generate earnings per share of 52 cents that exceeded analysts' estimates by a penny during the period ended March 30.

The numbers are noteworthy because Sonoco's performance and second quarter outlook offers an early indication of upcoming retail promotional activity, considering demand for its consumer packaging and display and packaging services are fueled by retail and CPG companies.  This is especially true in the case of the display and packaging group which designs, manufactures, assembles, packs and distributes all manner of temporary, semi-permanent and permanent point-of-purchase displays.  Also included in the performance of the division are supply chain management services such as contract packing, fulfillment centers and retail packaging.

This exposure to the retail industry, coupled with the short lag between the end of Sonoco's quarter (March 30) and when it reports results (April 16) offers a near real time look at industry demand.

"Much of the negative impact from severe winter weather occurred in January and February.  As weather improved in March, we saw a strong rebound in customer orders across most of our businesses and a sharp improvement in operating performance," said Sonoco president and CEO Jack Sanders.  "Enterng April, customer orders appear to be running at more normal levels, in line with volume expectations and our second-quarter earnings guidance, which anticipates continued improvement in operations."

Source: Retailing Today