Shop.org Forecasts Online Sales To Grow Between 8-11% This Holiday Season

October 7, 2014

Shop.org today released its 2014 online holiday sales forecast, expecting sales in November and December to grow between 8-11 percent over last holiday season to as much as $105 billion.

Shop.org forecasts sales based on government data including consumer credit, disposable personal income, and previous monthly retail sales releases.  Holiday non-store sales in 2013 grew 8.6 percent.

Source: National Retail Federation

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

CEO Confidence Declines Again

October 8, 2014

The Conference and PwC Measure of CEO Confidence declined again in the third quarter of 2014.  The Measure now reads 59, down from 62 last quarter (a reading of more than 50 points reflects more positive than negative responses).

Says Lynn Franco, Director of Economic Indicators at The Conference Board: "While CEOs say economic conditions have improved from the start of the year, their expectations for growth in the short-term have softened.  Overall, CEOs remain optimistic about growth prospects in the U.S. and India, but sentiment for Europe has declined considerably.  Expectations for China and Japan have moderated, and CEOs remained negative about Brazil's near-term prospects.  Less than a quarter of chief executives report increasing their companies' capital spending plans since January, while less than 20 percent have scaled back spending."

CEOs' assessment of current economic conditions, however, was more positive.  Now, approximately 52 percent claim conditions are better compared to six months ago, up from 46 percent in the second quarter of 2014.  Conversely, business leaders' appraisal of conditions in their own industries declined, with just 41 percent saying conditions in their own industries have improved, compared with 48 percent last quarter.

CEOs' expectations regarding the short-term outlook were less optimistic.  Slightly more than 44 percent of business leaders anticipate economic conditions will improve over the next six months, down from 53 percent last quarter.  However, nearly 51 percent expect conditions to remain the same.  Expectations for their own industries are also more subdued, with 34 percent anticipating an improvement, down from 46 percent in the second quarter.  About 51 percent expect no change in conditions.

Global Outlook

CEOs are more positive in their assessment of current economic conditions in the United States and India, but remain negative regarding conditions in Brazil, China, Europe and Japan.  More notable, business leaders' assessment of conditions in Europe and Japan went from positive (a reading of 50 and over) to negative, while India increased into positive territory.

Looking ahead, short-term expectations for Europe, China and Japan declined but remain slightly positive, while expectations for Brazil edged up but remain negative.  Overall, CEOs are most positive about the outlook for both the United States and India.

More CEOs Increasing Capital Spending Plans

Nearly 21 percent of chief executives report increasing their companies' capital spending plans since January of this year, while 17 percent have scaled back spending, based on a supplementary question.  In 2012, when we last asked this question, only 9 percent of respondents had incrased their capital spending plans and 32 percent had made cuts.  An increase in sales volume was one of the most common reasons given for increasing capital investment plans.  A decline in sales volume also played a key role in scaling back spending plans.

Source: The Conference Board

Costco Sales Rise In Fourth Quarter

October 8, 2014

Costco reported a rise in sales and same-store sales for the fourth quarter.

Net sales for the quarter were $34.75 billion, an increase of 9% from $31.77 billion in fiscal 2013.  Same-store sales for the total company increased 6%, while U.S. same-store sales also rose 6%.

Net income for the quarter was $697 million, or $1.58 per diluted share, compared with $617 million, or $1.40 per diluted share, in the year-ago period.

Fiscal year 2014 sales totaled $110.21 billion, an increase of 7%.  Same-store sales increased 4% for the company and 5% in the United States.

Net income for the fiscal year was $2.06 billion, or $4.65 per diluted share, compared with $2.04 billion, or $4.63 per diluted share, in fiscal year 2013.  Net income last year was positively impacted by a $62 million tax benefit in connection with the portion of the special cash dividend paid in December 2012 to the company 401(k) plan participants.

Source: Retailing Today

Retailers' Holiday Happiness Hinges On The G-factor

October 3, 2014

How well many retailers perform this holiday season in store and online will be determined by the shopping preferences of a demographic group that doesn't typically get a lot of love from marketers.

Marketers invest heavily in researching highly desirable segments, such as Millennials or the growing U.S. Hispanic population, to uncover actionable insights and develop sales strategies.  However, that isn't the case with grandparents, which is a huge miss for brands and retailers clawing for every last share point.  There are approximately 70 million grandparents in the U.S. and they will spend an estimated $52 billion on their grandchildren this year, including $17 billion on gifts, according to the American Grandparents Association.

That's a lot of spending power, but capturing those dollars requires a deeper understanding of grandparents' behavior relative to parents and other shoppers.  The biggest area of difference between older and younger consumers: online shopping.  Online buying is still slow to catch on with the grandparents segment.  Seventy-one percent of grandparents say that the majority or all of their shopping (outside of grocery or pharmacy shopping) is done at a physical store - compare this to 61% of parents.

When comparing the grandparents segment from one year ago to that of today, we see slight shifts in spending from physical stores towards online.  Among the most recent grandparent respondents, 68% said they do most of their shopping at bricks-and-mortar locations vs. 73% one year ago, and those who say they split their spending equally with online shopping grew from 13% a year ago to 17% today.

This growth could be the result of a number of different factors, including a greater number of older adults recognizing the convenience benefits of online shopping, particularly if they have physical limitations that make it difficult to navigate large stores or malls, push through crowds, or visit numerous individual locations.  Because many of them are retired, they are also at home more often to accept package deliveries.  Also, younger grandparents who are still working full time may simply like the time-saving benefits afforded by online shopping as they seek to manage their busy schedules and empty-nester social lives.

Regardless of the grandparent's age, the holiday season brings with it the opportunity to treat the grandkids to some nice gifts or other surprises.  When 5,069 grandparents were asked to characterize their gift-giving practices toward their grandchildren, most (54%) feel they are pretty well balanced in how much they purchase.  The "spoilers" who say they enjoy giving the youngsters lots of gifts and/or money account for 16%, and 23% are the "selective gifters" who say their practice is to buy a few high-quality items.  A small percentage (nearly 8%) instead focus on doing other things for their grandchildren that don't involve giving gifts or money, perhaps due to being more cash-strapped and/or on fixed incomes.  We had thought the data would show a higher percentage for "spoilers," since the poll question was answered voluntarily and anonymously, but perhaps the definition of spoiling is viewed differently by grandparents vs. non-grandparents.

Regardless of how many gifts are purchased, grandparents are less likely to flock to large sales events like Black Friday.  While 15% of parents and 13% of the general population say they wait for Black Friday to start most of their shopping, only 8% of grandparents say this.

For the 2014 holiday shopping season, grandparents look very similar to the general population in plans for gift expenses: Only 12% say they will spend more on gifts this year, 39% will spend less, 35% will spend about the same, and 14% won't spend any money on gifts.  Many older adults are on fixed incomes, so that certainly plays a role with this segment, as they are 55% more likely than the general population to say they will spend no money on holiday gifts this year.

Despite how much they will spend, there are key differences in where they will spend those gift dollars.  Grandparents indicate they are more likely to spend most of their holiday gift budget at larger discount stores like Walmart or Target (42% said this, compared to 34% for the general population and 39% for parents).  They are also more likely than parents to shop at small, locally-owned stores (16% vs. 9% of parents), but far less likely to spend big at specialty retail chains like The Gap or Best Buy - only 1% of them will spend most of their money here.

Due to the sizable spending power of this consumer group, retail marketers should take note of the grandparents segment.  It's important to take away that grandparents differ from the general population of U.S. adult consumers in several key areas: they are more likely to stretch out their holiday shopping and avoid major sales events or days; spend most of their holiday shopping money at discount superstores; and are starting to show some uptick in online shopping.  Their incomes are a factor in their gift-giving decisions for grandchildren as well.

These types of insights can certainly be leveraged by retailers to formulate segment-based promotions, in-store and online services, and even specialized offerings that cater to the attributes seen more in these older family members.

Source: Retailing Today

Home Depot Extends E-Commerce Capabilities Westward

October 2, 2014

Home Depot is extending its e-commerce capabilities westward with the opening of a dedicated online fulfillment center in California.

Located in Perris, California, the 858,953 sq. ft. facility will initially employ approximately 150 people, and eventually employ up to 300.  It is one of three new DFCs opening across the U.S. in addition to the company's existing network.

The Locust Grove DFC opened outside of Atlanta, Georgia in February and the Ohio DFC is scheduled to open next year.

According to the company, the new DFCs will dramatically increase the number of orders it can ship the same day they are received, which significantly expands the number of orders they'll be able to deliver within two days.

The three new DFCs are strategically positioned to deliver 90% of Home Depot's customers' parcel orders within two days using economical ground service.  For example, a customer will be able to place an order by 5 p.m. Monday and receive on Wednesday.

The company added that the new DFCs will also lower transportation costs and allow it to deliver online orders to consumers, contractors and its network of U.S. stores faster and uniformly.

Each center will have the capability to hold as many as 100,000 skus and stock a variety of goods including:

1. Products customers most frequently want delivered

2. Products where an extended assortment will be enabled through direct fulfillment (e.g. lighting and fans)

3. Products where a direct fulfillment strategy provides a better customer solution (e.g. flooring)

4. Seasonal products where a central fulfillment strategy allows the specialty retailer to offer a more compelling assortment (e.g. patio furniture)

The Home Depot has more than 90 North American distribution facilities, which ship products to more than 2,000 stores.

Source: Retailing Today

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

The Conference Board Employment Trends Index Increased In September Upward Momentum Continues

October 6, 2014

The Conference Board Employment Trends Index (ETI) increased in September.  The index now stands at 121.68, up from 121.32 (an upward revision) in August.  This represents a 6.1 percent gain in the ETI compared to a year ago.

"The Employment Trends Index increased for the ninth consecutive month, signaling solid job growth through year end," said Gad Levanon, Director of Macroeconomic Research at The Conference Board.  "A combination of positive and negative forces has been driving the rapid decline in the unemployment rate in recent years.  Hiring is strong, but productivity growth is weak, and the participation rate continues to decline.  None show signs of reversing."

September's increase in the ETI was driven by positive contributions from six of its eight components.  In order from the largest positive contributor to the smallest, these were: Industrial Production, Real Manufacturing and Trade Sales, Initial Claims for Unemployment Insurance, Ratio of Involuntarily Part-time Workers, Number of Temporary Employees, and Job Openings.

The Employment Trends Index aggregates eight labor-market indicators, each of which has proven accurate in its own area.  Aggregating individual indicators into a composite index filters out "noise" to show underlying trends more clearly.

The eight labor-market indicators aggregated into the Employment Trends Index include:

• Percentage of Respondents Who Say They Find "Jobs Hard to Get" (The Conference Board Consumer Confidence Survey)
• Initial Claims for Unemployment Insurance (U.S. Department of Labor)
• Percentage of Firms With Positions Not Able to Fill Right Now (National Federation of Independent Business Research Foundation)
• Number of Employees Hired by the Temporary-Help Industry (U.S. Bureau of Labor Statistics)
• Ratio of Involuntarily Part-time to All Part-time Workers (BLS)
• Job Openings (BLS)
• Industrial Production (Federal Reserve Board)
• Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis)

Source: The Conference Board

Strong Job Growth On Track

October 3, 2014

The economy generated a gain of 248,000 jobs in September, faster than the averge monthly over the past year, and revisions to July and August were very positive.  The slower gain initially reported for August now appears to have been simply an aberration.  The continued rapid drop in the unemployment rate increases the odds that reaching the natural rate of unemployment and the first Fed rate hike will occur in the first half of 2015.  The one negative piece of information from this report is the ongoing weakness in wage growth.

Source: The Conference Board

Retail Industry Adds 35,500 Jobs In September

October 3, 2014

According to the National Retail Federation's calculations, retail industry employment increased by 35,500 jobs in September, with upward revisions for July and August.  Employment gains were seen in most retail categories with the exception of clothing and clothing accessories stores, which lost 3,000 jobs, and health and personal care stores, which lost 900 jobs.  NRF numbers do not include automobile dealerships or gasoline stations.

"As expected, today's jobs report was positive news for the economy and the markets," NRF Chief Economist Jack Kleinhenz said.  "September's employment figure is roughly in line with its performance over the last six months and shows that the July and August data was just a temporary blip."

"The employment figure should set the table for a healthy fourth quarter as we head into the all-important holiday shopping season," Kleinhenz said.

"Economic data released in September, including the jobless benefits claims, supported stronger payroll growth and employment," Kleinhenz said.  "The jobs report indicates no evidence of wage pressure and should allow the Federal Reserve to stay the course."

The U.S. Bureau of Labor Statics Employment Situation Summary showed that total nonfarm payroll employment rose by 248,000 in September.  The unemployment rate fell slightly to 5.9 percent and the civilian labor participation rate remained relatively stable at 62.7 percent.

Source: National Retail Federation

Rite Aid Sales Climb In September

October 2, 2014

Rite Aid reported $2 billion in sales for the four weeks ended September 27, representing a 4.5% increase over the comparable yer-ago period.

Same-store sales increased 5.1% over the prior-year period, including a 2.3% lift in front-end same-store sales and growth of 6.3% in pharmacy and comparable sales.  Pharmacy same-store  sales included an approximate 225 basis points negative impact from new generic introductions.  Prescription count at comparable stores increased 4.4% over the prior-year period.

Prescription sales accounted for 69.5% of drug store sales, and third party prescription sales represented 97.6% of pharmacy sales.

Year-to-date, same-store sales for the 30 week period ended September 27 increased 3.8% over the prior-year period.  Front-end same-store sales increased 0.8% while pharmacy same-store sales increased 5.2%.  Prescription count at comparable stores increased 3.2% over the prior-year period.

Total drug store sales for the 30 weeks ended September 27 increased 3.3% with sales of $14.9 billion.  Prescription sales represented 68.7% of total drug store sales.

Source: Retailing Today

Online Labor Demand Falls 137,200 In September

October 1, 2014

• September posts a decline, following strong August gain.
• The STEM related categories continue to gain while other occupational groups show losses.

Online advertised vacancies declined 137,200 to 5,072,000 in September, according to The Conference Board Help Wanted OnLine (HWOL) Data Series released today.  The August Supply/Demand rate stands at 1.84 unemployed for each advertised vacancy with a total of 4.4 million more workers than the number of advertised vacancies.  The number of unemployed was 9.6 million in August.

"The September loss offsets most of August's gain, resulting in only modest overall growth for 2014," said Gad Levanon, Director of Macroeconomics and Labor Markets at The Conference Board.  "Following a strong second quarter, the third quarter has ended basically flat."

In September, the STEM-related occupations showed strength in Computer and Math (9,600), Architecture and Engineering (3,400), and Healthcare Practitioners (12,200), while other categories showed losses, including Office and Administrative (-40,600), Sales (-32,500), and Transportation (-22,900).

Regional And State Highlights

• All 20 of the largest states posted declines in September.
• Among the 50 states, 45 experienced losses while 5 (Iowa, Utah, Maine, Alaska and Nebraska) gained.

Metro Area Highlights

• In September, among the 20 largest metro areas, 2 (San Jose and San Francisco) gained and 18 declined.
• Of the 52 metro areas for which Help Wanted OnLine provides monthly data, 8 gained advertisements, 43 lost, and 1 (Rochester) remained constant.

Occupational Highlights

• In September, of the 10 largest online job categories, 3 posted gains and 7 posted declines.

Source: The Conference Board

Walgreens Reports Lift In Annual Sales

September 30, 2014

Walgreens posted fourth quarter sales of $19.1 billion, representing an increase of 6.2% compared to the year-ago period, while sales for the fiscal 2014 ended August 31 increased 5.8% to a record $76.4 billion.

Front-end comparable store sales increased 1.3% in the fourth quarter compared with last year's fourth quarter.  Customer traffic in comparable stores decreased 2.2% and basket size increased 3.5%, while total sales in comparable stores increased 5.4%.  Walgreens Balance Rewards loyalty program reached 82 million active members at the end of this year's fourth quarter.

Prescription sales, which accounted for 65.7% of sales in the quarter, increased 9.3% compared with last year's quarter, while prescription sales in comparable stores increased 7.8%.  The company filled 211 million prescriptions in the quarter, an increase of 4.2% over last year's fourth quarter.  Prescriptions filled in comparable stores increased 3.9% in the quarter.

In fiscal 2014, Walgreens filled a record 856 million prescriptions.  The company continued to see strong growth in prescriptions filled for Medicare Part D patients, which increased 9.2% in the fourth quarter compared with last year's quarter.  Since the beginning of fiscal 2013, Walgreens Medicare Part D prescription market share has grown more than twice as fast as its overall retail prescription market share, the company stated.

"Our fourth quarter performance was in line with our expectation, recognizing we have much more to do.  We closed the fiscal year by exercising the option for the second step of our strategic transaction with Alliance Boots, completing the transition of our pharmaceutical distribution to AmerisourceBergen and driving continued improvement in our daily living business that resulted in our largest year-over-year quarterly and fiscal-year sales increases in three years," stated Walgreens president and CEO Greg Wasson.  "While continuing to work through pharmacy margin pressure, we were able to achieve improved top-line pharmacy growth as our retail pharmacy market share for the fiscal year increased 30 basis points to 19%.  Finally, we maintained solid expense control in the fourth quarter and are moving forward with the implementation of our previously announced cost-reduction initiative to achieve $1 billion in savings by the end of fiscal 2017."

Walgreens realized a net loss determined in accordance with generally accepted accounting principles for the fiscal 2014 fourth quarter of $239 million, compared with net earnings of $657 million in the same quarter a year ago.  Net loss per share for the quarter was 25 cents, compared with earnings of 69 cents per diluted share in the year-ago quarter.  This year's quarter was negatively impacted by an $866 million, or 90 cents per diluted share, non-cash loss on the amendment and exercise during the quarter of the company's Alliance Boots call option.

Adjusted fiscal 2014 fourth quarter net earnings were $714 million, a 1.7% increase.  Adjusted net earnings per diluted share for the quarter increased 1.4% to 74 cents, compared with 73 cents per diluted share in the year-ago quarter.  This year's fourth quarter earnings adjustments had a net positive impact of $953 million or 99 cents per diluted share.

The combined synergies for Walgreens and its strategic partner, Alliance Boots, in fiscal 2014 were $491 million.  The joint synergy program is estimated to deliver fiscal 2015 combined synergies of approximately $650 million.  Alliance Boots contributed 6 cents per diluted share to Walgreens fourth quarter 2014 adjusted net earnings.  The company estimates that the accretion from Alliance Boots in the first quarter of fiscal 2015 will be an adjusted 10 to 11 cents per diluted share, including a 2-cent benefit related to Alliance Boots' acquisition of its partner's interest in a joint venture.  This estimate does not include amortization expense, the impact of AmerisourceBergen warrants or one-time transaction costs.

During fiscal 2014, the company generated operating cash flow of $3.9 billion and free cash flow of $2.8 billion.  Walgreens also increased its quarterly dividend rate declared in August by 7.1% to 33.75 cents per share, consistent with the company's goal of returning cash to shareholders.  This marked the 39th consecutive year in which Walgreens increased its shareholder dividend.

GAAP total gross profit dollars increased $136 million, or 2.6%, compared with the year-ago fourth quarter, with gross profit margins decreasing 90 basis points versus the year-ago quarter to 28 as a percentage of sales.  Adjusted gross profit dollars increased $133 million, or 2.6%, compared with the year-ago fourth quarter.

Pharmacy gross profit dollars were negatively impacted by lower third-party reimbursement and generic drug price inflation, which were partially offset by an increase in the brand-to-generic drug conversions compared with the year-ago quarter.  Both pharmacy and front-end margins benefitted from purchasing synergies from the company's joint venture with Alliance Boots.

The company opened or acquired 46 new drug stores in the fourth quarter compared with 33 in the year-ago quarter.  In fiscal 2014, Walgreens added a net gain of 21 new drug stores in addition to 70 net new drug stores through acquisitions.

At August 31, Walgreens operated 8,309 locations with a presence in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands.  The company has 8,207 drug stores nationwide, a net gain of 91 compared with a year ago.  Walgreens also operates infusion and respiratory services facilities, specialty pharmacies and mail service facilities, and manages more than 400 Healthcare Clinic and provider practice locations around the country.  Walgreens digital Business includes Walgreens.com, drugstore.com, Beauty.com, SkinStore.com and VisionDirect.com

Source: Retailing Today 

September 2014 Manufacturing ISM Report On Business - PMI At 56.6%

10/1/2014

New Orders, Employment and Production Growing; Inventories Growing; Supplier Deliveries Slowing

Economic activity in the manufacturing sector expanded in September for the 16th consecutive month, and the overall economy grew for the 64th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee.  "The September PMI registered 56.6 percent, a decrease of 2.4 percentage points from August's reading of 59 percent, indicating continued expansion in manufacturing.  The New Orders Index registered 60 percent, a decrease of 6.7 percentage points from the 66.7 percent reading in August, indicating growth in new orders for the 16th consecutive month.  The Production Index registered 64.6 percent, 0.1 percentage point above the August reading of 64.5 percent.  The Employment Index grew for the 15th consecutive month, registering 54.6 percent, a decrease of 3.5 percentage points below the August reading of 58.1 percent.  Inventories of raw materials registered 51.5 percent, a decrease of 0.5 percentage point from the August reading of 52 percent, indicating growth in inventories for the second consecutive month.  Comments from the panel reflect a generally positive business outlook, while noting some labor shortages and continuing concern over geopolitical unrest."

Manufacturing expanded in September as the PMI registered 56.6 percent, a decrease of 2.4 percentage points when compared to August's reading of 59 percent.  A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI in excess of 43.2 percent, over a period of time, generally indicates an expansion of the overall economy.  Therefore, the September PMI indicates growth for the 64th consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the 16th consecutive month.  Holcomb stated, "The past relationship between the PMI and the overall economy indicates that the average PMI for January through September (55.2 percent) corresponds to a 4.0 percent increase in real gross domestic product (GDP) on an annualized basis.  In addition, if the PMI for September (56.6 percent) corresponds is annualized, it corresponds to a 4.4 percent increase in real GDP annually."

Of the 18 manufacturing industries, 15 are reporting growth in September.

Source: Institute for Supply Management 

The Conference Board Consumer Confidence Index Declines

September 30, 2014

The Conference Board Consumer Confidence Index, which had increased in August, declined in September.  The Index now stands at 86.0, down from 93.4 in August.  The Present Situation Index decreased to 89.4 from 93.9, while the Expectations Index dropped to 83.7 from 93.1 in August.

Says Lynn Franco, Director of Economic Indicators at The Conference Board: "Consumer confidence retreated in September after four consecutive months of improvement.  A less positive assessment of the current job market, most likely due to the recent softening in growth, was the sole reason for the decline in consumers' assessment of present-day conditions.  Looking ahead, consumers were less confident about the short-term outlook for the economy and labor market, and somewhat mixed regarding their future earnings potential.  All told, consumers expect economic growth to ease in the months ahead."

Consumers assessed current conditions less favorably in September compared to a month ago.  Their view of business conditions was virtually unchanged: those saying conditions are "good" fell minutely, from 23.5 to 23.4 percent, while those claiming business conditions are "bad" held constant at 21.3 percent.  Consumers' appraisal of the job market declined more appreciably, with the proportion stating jobs are "plentiful" falling from 17.6 percent to 15.1 percent.  Those claiming jobs are "hard to get" was barely changed, at 30.1 percent versus 30.0 percent in August.

Consumers' optimism about the short-term outlook declined considerably in September.  The percentage of consumers expecting business conditions to improve over the next six months fell from 20.8 percent to 18.6 percent, while those expecting business conditions to worsen rose from 9.9 percent to 12.0 percent.  Consumers' outlook for the labor market likewise took a downturn.  Those anticipating more jobs in the months ahead fell from 17.8 percent to 15.2 percent, while those anticipating fewer jobs rose from 15.2 percent to 17.8 percent.  The proportion of consumers expecting growth in their incomes rose in September to 16.8 percent, compared to 15.5 percent in August.  However, the proportion expecting a drop in income also rose - to 13.4 percent versus 11.6 percent a month ago.

Source: The Conference Board

Weather Trends: October 2014

September 29, 2014

For the U.S. as a whole, temperatures will trend similar to last year and below normal, but there will be a split in trends across the nation with warmer temperatures in the West and cooler temperatures in the more densely populated East.  The month will begin with warm weather across much of the nation and that will continue into the Columbus Day weekend in the East befor turning cooler.  The Northwest region will trend wetter than last year, but it still remains drier than normal, while the Southwest will be wetter than last year and normal.  Most of the East will trend drier than normal, but we'll have to keep an eye out for any tropical disturbances, especially in Florida, although tropical activity overall will still be low.  Cooler temperature trends in the East will help to offset warmer trends in the western half of the nation.  Demand for fall apparel, furnace filters, and comfort foods should be stronger in the East compared to last year.

Source: Retailing Today, Weather Trends International

Deloitte Forecasts Boost In This Year's Retail Holiday Sales

September 24, 2014

According to Deloitte's annual retail holiday sales forecast, steadily improving economic fundamentals should moderately boost holiday sales in stores and online this year.

"Income, wage and job growth are positive indicators heading into the holiday season," said Daniel Bachman, Deloitte's senior U.S. economist.  "Debt levels remain at historical lows, and stock market gains coupled with increasing home prices have a wealth effect on consumers, which may encourage increased spending compared with prior years.  Although consumers are watching tensions unfold in the Middle East and Ukraine, the improvement in their economic situation should more than offset the foreign conflicts' impact on consumer confidence and retail sales.  Despite recent events in energy-producing areas of the world, gas prices have held steady, which may also sustain consumers' spending power."

Deloitte's retail and distribution practice expects total holiday sales to climb to between $981 and $986 billion, representing a 4 to 4.5% increase in November through January holiday sales (excluding motor vehicles and gasoline) over last season.  This growth rate is a moderate improvement over last year's 2.8% gain.  Additionally, Deloitte forecasts a 13.5 to 14% increase in non-store sales in the online and mail order channels during the 2014 holiday season.

"While online sales continue to climb, digital customer interactions through both virtual and physical store channels present greater sales opportunities than online or mobile commerce alone," said Alison Paul, vice chairman, Deloitte LLP and retail and distribution sector leader.  "Our research indicates that 84 percent of shoppers use digital tools before and during their trip to a store.  Additionally, those shoppers convert, or make a purchase, at a 40 percent higher rate than those who do not use such devices during their shopping journey."

Deloitte forecasts that digital interactions will influence 50%, or $345 billion, of retail sales this holiday season.  This figure reflects the extent to which consumers' use of desktop and laptop computers, tablets and smartphones influence brick-and-mortar store sales.

"Retailers should focus on the right functionality, rather than more functionality, when creating digital experiences this holiday season.  Rather than offer their full e-commerce site on a mobile device, for example, retailers may be more effective by helping consumers compare prices, scan through local assortments, and navigate the store.  Retailers that better understand how consumers make purchasing decisions, then deliver tools that support that process in a way that is consistent and complementary across online, mobile and store channels - may have the advantage this holiday season," Paul said.

Source: Retailing Today

New Home Sales Top 500,000 In August, Highest Level Since 2008

September 24, 2014

Sales of newly built, single-family homes increased 18 percent in August to a seasonally adjusted annual rate of 504,400 units in August, the highest level in six years, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

"This jump in sales activity is in line with our latest surveys, which indicate builders are seeing increased traffic and more serious buyers in the market for single-family homes," said Kevin Kelly, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Wilmington, Delaware.

"This robust level of new home sales activity is a good sign that the housing recovery is moving towards higher ground," said NAHB Chief Economist David Crowe.  "Historically low mortgage rates, attractive home prices and firming job and economic growth should keep the housing market moving forward in 2014."

Regionally, new home sales rose 50 percent in the West, 29.2 percent in the Northeast and 7.8 percent in the South.  Sales were unchanged in the Midwest.

The inventory of new homes for sale edged up to 203,000 in August, which is a slim 4.8 month supply at the current sales pace.

Source: National Association of Home Builders

Spooky And Scary Alike, Record Number Of Americans To Buy Halloween Costumes This Year

September 24, 2014

More costumes than ever will be flying off the shelves as Americans gear up to celebrate the spookiest holiday of the year, according to NRF's Halloween Consumer Spending Survey.  More than two-thirds (67.4%) of celebrants will buy Halloween costumes for the holiday, the most in the survey's 11 year history.  The average person will spend $77.52 this Halloween, compared to $75.03 last year.  Total spending on Halloween this year will reach $7.4 billion.

"As one of the fastest-growing consumer holidays, Halloween has retailers of all shapes and sizes preparing their stores and websites for the busy fall shopping season," said NRF President and CEO Matthew Shay.  "There's no question that the variety of adult, child and even pet costumes now available has driven the demand and popularity of Halloween among consumers of all ages.  And, with the holiday falling on a Friday this year, we fully expect there will be a record number of consumers taking to the streets, visiting haunted houses and throwing unforgettable celebrations."

Party-goers will splurge on spooky and fun garb to wear this year as $2.8 billion will be spent on costumes overall.  Specifically, celebrants will shell out $1.1 billion on children's costumes, and $1.4 billion on adult costumes.  It is clear Fido and Fluffy will not be forgotten:  Americans will spend $350 million on costumes for their furry friends.

Candy and greeting cards alike will be popular items this season, as consumers will spend $2.2 billion on candy this year and 35.9 percent of people will be sending Halloween greeting cards.  With Americans planning to spend $2 billion on decorations for the frightful holiday, life-size ghosts, pumpkins and festive decor will be aplenty on lawns and doorsteps throughout the country.

Consumers will celebrate the holiday in many different ways, but topping the list of planned activities is handing out candy (71.1%), while others will decorate their homes and yards (46.7%), and dress in costume (45.8%).  One-third of Americans will throw or attend a party (33.4%), which is up from last year (30.9%).

Much like last year, consumers will hit the stores and the Internet early to get the first pick of costumes and candy.  According to the survey, nearly one-third of celebrants (32.1%) say they will start their Halloween shopping before the first of October.  And, while 43.3 percent of celebrants kick off their shopping in the first two weeks of October, one-quarter (24.6%) will wait until the last minute and shop the last two weeks of October.

While the bulk of Americans will look for costume inspiration online (34.2%) or in a retail store or costume shop (33%), Pinterest is a growing source of inspiration this year.  The survey found 11.4 percent of Americans will turn to Pinterest for costume ideas, up from 9.3 percent last year.  Young adults will drive the most Pinterest traffic:  21.2 percent of 18-24 year olds will turn to the popular site for ideas, as will 21.0 percent of 25-34 year olds.

"Social media is a great tool for consumers to find inspiration for all of their Halloween activities, including finding tips for decorating their homes and yards, looking for personal and even family costume ideas, and even finding the best deals from retailers," said Analyst Pam Goodfellow.  "As the popularity of Halloween continues to grow to unseen levels, there is no doubt that Americans this year will find ways to get in the spirit, looking for affordable, fun ways to celebrate with their families."

For some consumers, the U.S. economy is still top-of-mind.  According to the survey, 18.8 percent say the state of the U.S. economy will impact their Halloween spending plans.  Specifically, nearly two in five (19.7%) of those impacted will utilize their creative skills and make their own costumes rather than buying a new one this Halloween.

Source: National Retail Federation

Ascena Retail Banks On Omnichannel Following 'Mixed' Q4 Results

September 23, 2014

Following fourth quarter results that missed Wall Street expectations, Ascena Retail is looking ahead to fiscal 2015, which CEO David Jaffe said will see the continuation of a critical, multi-year investment to build the company's omnichannel platform.

The company reported net earnings of $15.7 million, compared with $29.8 million in the year-ago period.

Revenues for the quarter were $1.18 billion, compared with $1.20 billion in the prior year.  The company attributed the decrease challenging tween market comditions at Justice and inventory-related issues at Lane Bryant.  Results were partially offset by positive comp growth at Maurices and Catherines and new strong growth at Maurices.  Total same-store sales decreased by 2%.

"Despite mixed results across our portfolio and continuing soft traffic patterns, fourth quarter EPS was in line with our expectations.  We have yet to see sustained evidence of market improvement, and as a result, are maintaining focus on inventory levels and expense management, developing an integrated ecommerce platform for our customers, and driving efficiency improvements throgh our strategic investments.  Our final brand is in the process of moving into our retail distribution center in Ohio, and we remain on track to have all our brands operating out of our new ecommerce fulfillment center by spring of calendar 2015.  We continue to create a business model that will drive sustainable long term value for shareholders."

Source: Retailing Today