Shop Talk

Check Out Line: Smaller discounts, smaller January sales?

Check out consumers finding retailers offering smaller discounts in the days after Christmas — a possible drag on January sales.

According to a survey by America’s Research Group, 68.4 percent of consumers surveyed said they saw smaller discounts this year than last year after Christmas.

Meanwhile, 40.1 percent of those surveyed said they felt worse than they did a year ago about their financial situation, which means those smaller discounts may fail to keep shoppers buying well into January, said Britt Beemer, America’s Research Group founder.

“You never want the negative numbers to ever get above 25 percent,” Beemer said. “I just think it is a reflection of how frugal the consumer is and is going to remain in the marketplace,” he said.

Retail chain store sales beat expectations in December, but industry experts see the momentum fading early in 2010 as consumers return to saving their money.

With visions of 70 percent off and 80 percent off still dancing in their heads from massive clearance sales after the 2008 Christmas season, consumer may find saving money is easier in the face of less compelling bargains.

Also in the basket:

Target wants shoppers to squeeze the (supersized) Charmin

Grab that shopping cart – you’re going to need it.

To lure post holiday shoppers this year, Target has scrapped its typical plan of stocking its stores with exotic home goods sourced from across this globe.

Instead, it has cleared out the Christmas trees and holiday lights to make room for a mini warehouse club.

Target is stocking 12-packs of giant up & up paper towels for $13.49, and 24-packs of triple roll Charmin toilet paper for $17.99.

Mixed in with the bulk-sized packages, Target is putting in “treasure hunt” items  — a tactic used at No. 1 U.S. warehouse club giant Costco. It will be selling Ed Hardy handbags and shirts for between $34.99 and $64.99, and Ralph Lauren polo shirts for boys and girls for less than $25.

But Costco doesn’t have to worry about Target becoming a direct competitor – at least not yet.  Kathee Tesija, Target’s executive vice president of merchandising, told Reuters the retailer will only offer what it is calling “The Great Save” until February 21. But if you’re lucky and that supersized package of Charmin is a hit with shoppers it might just wind up in Target’s normal product assortment.

(Image provided by Target)

Check Out Line: Retail’s Monday morning quarterbacks

Check out the various descriptions of the 2009 holiday shopping season, which unofficially ended on Friday with Christmas. Analysts’ Monday morning reviews range from ”adequate” to “quite pleased”.

“All in all … Holiday 2009 was good enough, but has a long way to go with catching up to what the consumer really wants,” said NPD Group analyst Marshal Cohen. “And if the economy is truly to recover, not only does the housing and credit market need to recover, but the innovation market for retail products must recover as well.”

But  some retailers did show improvements in product assortments, according to UBS analyst Roxanne Meyer.

Meyer said women’s clothing chains gave their best showing in years in terms of product and promotions, with Urban Outfitters, J Crew Group and Chico’s FAS Inc on top, given their strong product assortments and lean inventories which allowed them to avoid steep, profit-sapping discounts.

“Despite delayed purchasing and storms, the majority held the line on promotions,” Meyer said.

Independent retail analyst Jennifer Black said retailers had back-up plans and were prepared this year — in stark contrast to last year, when the financial crisis erupted in September and quickly slammed the brakes on consumer spending, leaving retailers with heaps of unsold merchandise.

“Companies we believe had a great holiday include Nordstrom, Limited Brands, Chico’, J. Crew, Lululemon and Urban Outfitters to name a few,” Black said.

Target pops up, but this time with a focus on price

Target is a big fan of the pop up store, setting up miniature versions of itself for a few days so shoppers can buy its wares, often in cities where it does not have a large presence.

A year ago, right before the financial storm hit Wall Street in September, it set up “Bullseye Bodegas” in Manhattan, where it showcased exclusive merchandise by 22 designers.

This year for the holidays, Target will open 3 Target To-Go stores Dec 11-13 in New York City, San Francisco and Washington, D.C.  They will offer 50 “wallet-friendly gifts” like toys, home decor, beauty and fashion. Target’s fashions from Rodarte will also be sold in the pop up stores a week before the collection hits its stores nationwide on Dec. 20.

“This holiday, we wanted to give our urban markets a little slice of Target,” said Shawn Gensch, vice president of marketing. ”Target To-Go gives time-starved city dwellers a joyful, convenient and affordable holiday shopping experience.”

With budget-conscious shoppers appearing to be the only ones who exist this holiday season (resulting in retailers seeing a weak start to the holiday shopping rush), touting “wallet-friendly” gifts over unique merchandise by 22 designers might be a better way to win sales this Christmas.

(Photo: Reuters)

Check Out Line: A Black Friday extravaganza!

Today’s a serious shopping day for serious shoppers.

Black Friday is no longer a sport for the leisurely shopper. From our late-night rounds, it became clear that people were lining up all over in the dead of night (and some earlier than that!) not just for the fun of it but out of necessity.

While many of the stoutest shoppers were grimly determined to get their deals and get out, there was some fun and holiday cheer.

At a Best Buy in Springfield, Pennsylvania at midnight, the 50 people in line created an atmosphere part football tailgate and part Department of Motor Vehicle tension. A card table was set up near the end of the line, but the reception on that end was quite frosty, possibly “enhanced” by the consumption of cheap beer.

But for the most part, the deals were the thing.

Take Nate Bryan of Drexel Hill, Pennsylvania, who arrived at 2:30 am EST this year to get a laptop for his daughter.

“It’s normally $1,000 and now cut in half. That $500 can go to other things,” he said.

Consumers shrug in the face of lean inventory

Lean inventory may be the secret weapon that retailers are depending on to survive the holiday season with earnings intact.

But consumers don’t exactly seem to be quaking in their boots at the prospects of finding empty racks this Christmas season.

According to the ICSC, with 18 days until Black Friday and 46 shopping days until Christmas, the consumer appears “unfazed” by reports of retailers running low on inventory.

The ICSC and Goldman Sachs’ 2009 Holiday Spending Survey found that 81 percent of consumers said lean inventories are not motivating them to shop earlier than in past seasons.

One culprit behind the nonchalance?  Gift cards.

According to the survey, 48 percent of holiday shoppers said that if they can not find the gift item they are looking for, they will buy a gift card.

“It is surprising that consumers are not willing to shop early for holiday gifts to get the best selection,” said Michael Niemira, ICSC’s chief economist.  “Bargains seemingly may matter more than selection for the consumer, which is why more consumers this year than in any recent time plan to shop on the day after Thanksgiving (16%) —which now should be dubbed Bargain Friday.”

Check Out Line: The dreaded 10 percent

Check out the grim unemployment numbers from the U.S. Labor Department on Friday, a day after dozens of retail chains reported lackluster October sales.

U.S. employers cut a deeper-than-expected 190,000 jobs in October, driving the jobless rate to 10.2 percent, the highest in more than 26 years.

Analysts polled by Reuters had expected the monthly unemployment rate to edge up to 9.9 percent from 9.8 percent in September.

While job losses have been mounting for months, some analysts and economists say 10 percent unemployment could deal a new psychological blow to U.S. consumers who might previously have felt that the economy was beginning to stabilize.   

Just last week, news that the U.S. economy had returned to growth instilled hope for a rebound in consumer spending. But the latest reports on retail sales and joblessness suggest that such a result may be further down the road.

So, no matter what gimmicks retailers resort to – be it $10 DVDs or upscale wines – the customer, spooked by an almost daily dose of gloomy economic data, may still be unwilling to open their wallets.

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Check Out Line: Forecast calls for early Christmas shopping

Check out who is shopping early for Christmas.   U.S. consumer are, according to a new Accenture survey, which showed that 69 percent of shoppers plan to do the bulk of their holiday shopping by Dec. 7.  That’s up from 60 percent a year earlier.   More than half (52 percent), plan to shop on Black Friday (the day after Thanksgiving), up from 42 percent last year.   The game of chicken between retailers and shoppers over discounts may be more intense this year after retailers had to practically give the store away in 2008 to clear inventory in the middle of the recession.   The vast majority of consumers (86 percent) will not be moved to buy without a discount of at least 20 percent, and a quarter of shoppers will be looking for an aggressive 50 percent discount before they open their wallets, the survey said.   “We have seen a ‘shift to thrift’ across all income levels during this economic downturn and breaking that habit will be the greatest challenge for retailers this holiday season,” Janet Hoffman, managing director of Accenture’s Retail practice, said in a news release.   Gift cards may also come back, with 79 percent of people saying they will give them and 59 percent saying they really want them.   Also in the basket:   Cadbury’s bumper Q3 puts pressure on suitor Kraft   Altria revenue misses estimates   P.F. Chang’s profit misses; ups ’09 outlook

(Reuters photo)

Check Out Line: Train wreck Christmas?

Check out a rather glum outlook for the Christmas shopping season.

Last year, holiday sales notched their worst performance in nearly four decades.

This year, they could be a “train wreck” says Britt Beemer, founder and CEO of America’s Research Group.

According to the latest Consumer Mind Reader survey released by America’s Research Group and UBS, 81 percent of respondents said they are pressured by family debts, forcing many to shop less and spend less. 

 “The data foretells a very scary Christmas shopping season with consumers radically cutting back at a time when retailers need shoppers to shore up sagging retail sales,” Beemer said. 

“I am fearful Christmas will be a retail train-wreck this year.”

Earlier this week, Beemer told Reuters that U.S. consumers are still cautious about eating at restaurants and are not planning to loosen the purse strings for holiday spending this year despite signs the economy is improving.

Check Out Line: Is it Christmastime already?

Check out some shoppers saving for holiday gifts.

Yes, it is still summer, but a comparison shopping Web site decided to find out how recession-weary shoppers feel about spending for the upcoming winter holidays.   Just over 75 percent of respondents to PriceGrabber.com’s recent survey said they are more concerned about the cost of holiday gift-giving this year.  So, how many are starting to save earlier?  Only 41.1 percent.

Here’s a quick breakdown of the survey from PriceGrabber.com:   Compared to the 2008 holiday season, are you more concerned about the cost of holiday gift-giving this year because of the recession?   35.2% Yes, I am highly concerned 40.1% Yes, I am moderately concerned 24.7% No, I am not at all concerned   Are you planning to start saving money for holiday gift-giving earlier than last year because of the recession?

41.1% Yes, I am planning to start saving money earlier than last year 20.9% No, I am planning to start saving money at the same time as last year 2.2% No, I am planning to start saving money later than last year 35.8% No, I do not save money for holiday gift-giving   When do you expect to start saving money for holiday gift-giving for the 2009 holiday season?   17.4% July 15.2% August 15.3% September 9.7% October 5.7% November 0.9% December

And, the group with the largest number of responses to that question — 35.8% — said they do not save money for holiday gift-giving.   The survey of 1,777 online consumers was conducted July 20 to Aug. 10.

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AnnTaylor profit tops views, but outlook tempered