Written by Tom Hals

As its rivals plan aggressive discounts on flat-panel TVs and round the clock hours to lure in recession-weary shoppers, Kmart is sticking with what worked, even if it is what worked 40 years ago.
 
Chief Marketing Officer Mark Snyder, who joined the company last year just before the holiday season, said the chain had no major new initiatives this year but plans to “build on the successes” of 2008. 
 
In other words, a fresh spin on layaway plans and Blue Light Specials, and of course the deep discount days that are a retailing standard this time of year.
 
One new offering includes a Christmas club, a staple of 1950s household budgeting that only deepens the impression that Kmart is rushing into its past to find the future.
 
The goal is to help households crushed by mounting debt to “leverage their cash,” or in other words, pay when credit is no longer available, he told us.
 
The chain may be onto something.  Kmart’s same-store sales for the quarter ended Oct. 31 rose 0.5 percent, only the second quarterly increase it has posted since 2001.
 
A recent visit to a Pennsylvania Kmart did not turn up any blaring lights or calls of “attention Kmart shoppers.”  It did show that some elements of Kmart’s past are more easily forgotten.
 
Asked by this reporter, the outgoing and helpful staff tried to locate Martha Stewart-branded housewares, possibly the last as their long-standing partnership ends this year. 
 
Another member of staff joined the hunt until a manager reminded everyone that Martha Stewart’s final inventory was sold out the week before, not with blue lights but helped by clearance prices. Like those found at Wal-Mart.

(Reuters photo)

Check out more retailers reminding Wall Street that all is not well on Main Street.

On Friday morning,  AnnTaylor Stores reported lower-than-expected quarterly revenue and gave a cautious forecast for the current holiday quarter.

The operator of the Ann Taylor and Ann Taylor LOFT chains said its fourth-quarter sales would be slightly below those of the third quarter, and that its gross margins would be lower as well, due to heightened promotions it expects to use to drive sales throughout the holiday shopping period.

Meanwhile, Foot Locker late on Thursday reported third-quarter results that missed Wall Street expectations. The athletic shoe retailer cited lower than expected U.S. sales.

On a conference call on Friday morning, Foot Locker said it expected same-store sales for the holiday fourth quarter to be negative.

Foot Locker and AnnTaylor join a chorus of retailers ranging from Macy’s to Kohl’s to Wal-Mart that have warned investors in recent weeks that the holiday shopping season may be a little less merry than the stock market is expecting as consumers continue to show a reluctance to spend.

Or as Doug Scovanner, the CFO of Target, said quite pointedly earlier this week: “In our view, sell-side analysts are somewhat more optimistic across most of our industry than we believe is warranted in light of the harsh realities of the current environment.”

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(Photo: Reuters)

Check out the latest survey about holiday spending.

American Express found that 10 percent of consumers actually expect to spend more on holiday gifts versus last year, while 43 percent plan to spend about the same as they did in 2008.
 
The third monthly online American Express Spending & Saving Tracker asked 2,011 adults about the economy, what they plan to spend on and what motivates them to spend or save.
 
When given the choice, only 13 percent said they have a “gloomy” attitude going into the holiday season, while 41 percent said they were “joyful.”

Most were feeling a bit generous, with 63 percent planning on some type of charitable giving over the holidays, even though 54 percent said that they would be cutting back on how many gifts they buy due to the economy.

So, who shouldn’t expect a gift this year?  If consumers have to shut someone out of their gift giving to save, co-workers are the first to go, then service workers such as postal carriers, hair and nail stylists, followed by extended family and friends.

Most consumers, 79 percent, said they plan to use the Internet to help out with holiday shopping, whether that’s actually buying or just researching what to shop for.  Only 45 percent said they would buy online.
 
The hot items? Gift cards, clothing and accessories, and then toys and games.
 
Shoppers said they expect to spend the most on techie gifts, followed by gift cards.
 
Seventy percent said discounts would be the main driver to get them to buy within the next 30 days. 
 
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(Reuters photo)

Check out consumers stepping up their online bargain hunting ahead of the holiday shopping rush.

According to Hitwise, searches for retailer promo codes rose 19 percent last week compared with 2008.

Those numbers should rise headed into “Cyber Monday” - the Monday after Thanksgiving when retailers shift from in-store to online promotions.

Last year, Hitwise said searches on a portfolio of search terms for specific retailers (i.e. ‘target coupons’, ‘target coupon codes’ and ‘target free shipping code’) peaked during the week of Cyber Monday, up 76 percent from 2007.

So who is doing this searching? Hitwise looked at the demographics of online bargain hunters in the 8 weeks ending Dec. 27, 2008. It found the split is even for male and female searchers. Just over half of the searchers were between the ages of 25 to 44, and Hitwise said the younger searchers, aged 25 to 34, were more likely to search for retailer coupons than the rest of the online population.

It also found the greatest share of searches are from those making between $30,000-$60,000 and $60,000-$100,000.

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(Photo: Reuters)

Walmart has launched an aggressive push to win market share this holiday shopping season, cutting prices on everything from books to toys to lean ground beef and televisions.

Now, it is taking its effort to reach potential holiday shoppers beyond its typical TV or print ads.

While Walmart is already tweeting, and has launched an official Facebook page (where it now has 43,112 fans), it has now come out with an iPhone application to help shoppers pick out holiday gifts.

“New Walmart iPhone app! U can take pic of your room & see what size TV would look best (and other cool stuff)” Walmart Kevin tweeted today, on the retailer’s behalf.

Indeed, the first edition of the application is focused on electronics, but Walmart intends to adds more products to future editions of the app.

Walmart joins a growing list of retailers, including JC Penney, Target and Best Buy, who are trying to find customers in the land of social media.

While Facebook, Twitter and iPhone apps have not yet gained enough critical mass to make or break the season, in a year where holiday sales might struggle to rise above 2008’s depressed levels, it looks like retailers are determined to chase holiday sales wherever they can find them.

(Photo: Screenshot of Walmart iPhone app)

Check out the holiday promotions from Staples.

Staples may not be the first place people think of to do their Christmas shopping, but the office supplies retailer is trying to drive traffic to its stores and website with promotions ranging from free shipping and value-priced gifts to laptop giveaways.

Starting on Nov. 30, the first Monday of the official holiday shopping season — dubbed “Cyber Monday” since many people use the first day back at work to shop online — Staples will give away a $1,000 technology bundle that includes an HP Laptop computer, every day.

It is also offering a range of products for under $10, including digital ornaments and mini pod speakers from Omnitech. 

Staples is also offering free shipping for online orders of more than $50 and is giving customers the option of having their orders shipped to a store for pick-up, which could be convenient for people who are traveling.

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(Photo: Staples)

Retailers, listen up. A survey from Discover shows that more consumers believe economic conditions are still getting worse.
 
Discover’s U.S. Spending Monitor for October fell 3.2 points to 85.8 (that’s out of 100, which is where the index started in May 2007).
 
Forty-six percent felt economic conditions were getting worse. That’s up 3 points from September and the first time the survey has seen an increase since July.

Slightly more women (58 percent) than men (53 percent) rated the economy as poor. Overall, 56 percent called the economy poor, up from 52 percent in September.
 
“The Monitor has always shown that women tend to be less optimistic than men about the economy and their finances,” said Julie Loeger, senior vice president of brand and product management for Discover.  “But the record jump in the number of women rating the economy as poor and the pessimism over the current state of their finances may indicate a weak holiday shopping season ahead.”

The Discover U.S. Spending Monitor is based on interviews with 8,200 U.S. adults conducted thoughout October.

Nearly 63 percent of 5,000 consumers surveyed toward the end October plan to spend less on holiday gifts this year. That’s in line with last year’s projections, and we all know how the winter of 2008 turned out.

For the seventh month in a row less than half of consumers said they expected to have money left over after paying their monthly bills. Just 44 percent said they expected to have money left over, down 3 points from September.

Meanwhile, the U.S. Agriculture Department said more Americans than ever are receiving food stamp assistance, while personal spending fell 0.5 percent in September.
 
“Consumers simply don’t seem to have the economic or financial confidence right now to reverse course, which is not good news for retailers,” said Loeger.

(Photo/Reuters)

Check out what’s coming around again this holiday season.

It’s that gift you gave someone last year.

According to a holiday shopping poll conducted by Consumer Reports in October, 36 percent of Americans say they have “recycled” a holiday gift. That’s up from 31 percent in 2008 and 24 percent in 2007.

Those more likely to re-gift include women, adults under 55 years old, residents of the U.S. West and people with children under the age of 12.

Want to prevent your gifts from making the rounds again?

Skip presents like socks, slippers and ties, which were on the list of most disappointing 2008 holiday gifts, according to the survey.

Or, for a virtually fail-safe bet, try cold hard cash.

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(Photo:Reuters)

Check Out a new survey by market research firm NPD Group that says this year’s winter holiday will be better than last year’s but still not that merry. 

Thirty percent of consumers who responded to the survey said they planned to spend less on holiday gifts this year, up from 26 percent last year.

“That 4 percent increase is certainly a sign of the times,” said Marshal Cohen, chief industry analyst for NPD Group, based in Port Washington, New York. “On the other hand, that 4 percent is not s dramatic as it could have been. I think consumers will be looking for the right gift, rather than the most extravagant or expensive one.”

Cohen forecast total holiday sales to grow a modest 0.5 percent to 1.5 percent from last year, and said consumers are likely to favor more traditional gift items this year.

Sweaters, fragrances, music, books, movies, and wallets, are expected to be popular gifts,  Cohen. said.  ”We are also seeing makeup and TVs showing signs of growth. Other stand-outs are notebooks/netbooks. They have been growing and will continue to grow through the holiday.” 

Another bright spot was apparel, with 49 percent of respondents saying they planned to buy articles of clothing as a gift. That was steady with consumers’ intentions from last year.

“That is good news for apparel,” Cohen said. “Its multi-year slip has stabilized this year.”

The toy category slipped, however, with 34 percent of respondents saying they planned to buy toys this year, down from 37 percent last year. About 29 percent of respondents said they planned to buy movies, steady with last year.

People who said they planned to buy books and electronics each rose 1 percentage point to 28 percent and 24 percent, respectively.

In terms of motivating shoppers, NPD said “value” will be the prime motivator, with 62 percent of respondents saying value would play a big role in determining what and where they purchase. About 61 percent said they would be motivated by a “special sale,” and 50 percent cited a “convenient location”.

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(Photo: Reuters)

Check out the unexpected increase in September same-store sales at U.S. retailers.

Providing hope that demand may be improving ahead of the holiday shopping season, retailers posted a surprise 0.6 percent increase last month in stores open at least a year, instead of the 1.1 percent decline analysts had expected.

And International Council of Shopping Centers sees October same-store sales even with a year ago. TJX Cos, which operates the T.J. Maxx and Marshalls chains, cited strong momentum heading into October.

“The consumer is dipping their toe back into the discretionary waters right now, but just their toe,” said Retail Metrics President Ken Perkins.

Among the retailers posting better-than-expected results were Aeropostale, Kohl’s, Children’s Place and American Eagle Outfitters. Many others posted declines that were not as weak as expected.

While this year’s later Labor Day holiday pushed a good chunk of sales from August into September, analysts had wondered if rising unemployment would weigh more heavily on spending.  However, sales of clothing for the back-to-school season fueled many retailers’ performances, and the number of U.S. workers filing jobless claims fell more than expected last week.

But the economy is not out of the woods yet. Holiday spending could be further constrained by consumer aversion to debt, as total U.S. consumer credit posted a deeper-than-expected drop in August, suggesting consumers are opting to cut debt rather than spend.

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(Reuters photo)