Retailers, consumers and prices
Specialty toy retailer Toys “R” Us issued its take on what this holiday season’s hot toys will be, as it prepares to attract toy shoppers one year after what was the worst holiday sales season in nearly 40 years.
This year, retailers and toy makers alike have focused keenly on prices, understanding that consumers may not be prepared to shell out hundreds of dollars for toys since caution rules their spending.
But who knows what parents will choose this year as prices remain on top of their minds.
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.
Check Out unemployment’s strain on consumers’ wallets.
The U.S. Commerce Department said consumer spending contracted 0.6 percent in November, the fifth-straight monthly fall. Incomes shrank 0.2 percent. A separate report showed initial claims for jobless benefits last week reached the highest level in 26 years.
Check out the winter wonderland.
As in, “I wonder if people are going to fight through the snow, sleet and rain this weekend to come to my store?”
A major storm headed for the Northeast could make things dicey for retailers on the last Saturday before Christmas, typically one of the biggest two shopping days of the year.
Retailers are hoping for a strong weekend to help lift what many analysts expect to be the worst holiday shopping season in about two decades.
But having just walked to work in Chicago, I can tell you that, depending on how this wintry mess hits the Northeast, consumers might have second thoughts about leaving their homes for the mall.
Planalytics, which measures the effect of weather on retailers, says the Northeast, lower Midwest and Great Lakes regions could see snow, sleet or freezing rain. On the West Coast, recent rainy conditions could continue to disrupt holiday traffic.
Along with steep discounts and extended hours, maybe retailer’s could offer door-to-door transportation.
Also in the basket:
Retailers may not rebound until 2010: analysts
Peltz’s Trian reports 7.18 pct stake in Dr Pepper
Beauty joins holiday’s discount mania (WWD, subscription required)
Wal-Mart has been the big retail winner in the recession and new data suggests that it could keep some of its gains after the economy recovers.
According to a survey by America’s Research Group, 9.3 percent of consumers surveyed said they had shopped at Wal-Mart for the first time this year.
Of those, a whopping 98.9 percent said that they would shop there again and the same number said they would continue to shop there once the recession ends.
“We’re watching the total domination for this retailer called Wal-Mart,” America’s Research founder and CEO Britt Beemer said.
The results were from a series of questions America’s Research asked on behalf of Reuters during the group’s weekly holiday shopping survey.
Check out some cautionary comments about how much weight to put on Black Friday sales reports.
The comments come from the Goldman Sachs U.S. economic research group and repeat caution the firm has given in the past about the much-hyped kickoff to the holiday shopping season.
1. “Shoppers are not sales.” Essentially, Goldman Sachs notes that just because people are in stores, it doesn’t mean they are buying something.
“Over the years, Black Friday has become a cultural event; people go not just to shop but to be a part of the broader experience, which could cause an increase in traffic that bears little relation to consumer spending,” the Goldman team wrote.
2. “Sales are not profits.” Retailers were offering deep discounts to get consumers into stores on Black Friday, discounts that could hurt profits.
3. “One day is not the holiday season.” The team notes that the correlation between data on Black Friday and the entire holiday season has been historically poor.
Thanksgiving also came late this year, so there are fewer shopping days between then and Christmas.
“Simply put, with less shopping days each one has to be better for the overall holiday shopping season to be strong,” the Goldman Sachs team wrote.
Want to keep track of the holiday season as it unfolds for retailers? Check out the Reuters Holiday Shopping page here.
Also in the basket:
Bargain hunters fail to save retail sales
Sears Holdings posts loss, plans store closures
Staples posts higher than expected profit
Wal-Mart assailed on death (WSJ)
Online retailer Overstock.com is pitching a rescue package for shoppers who are neck-deep in debt.
The company’s “Family Bailout” contest will pay off up to $50,000 in debt belonging to the winner or a member of his or her immediate family. The money gets paid directly to “qualified” creditors like mortgage or credit card companies.
Check out the marketing power of Hannah Montana.
Watch out Barbie. Hannah is clawing her way up behind you. At least as far as girl’s toys are concerned.
According the National Retail Federation’s 2008 top toy survey, Hannah Montana has moved up four spots to the number two position for girls’ in the Top Toys survey, trailing on Mattel’s Barbie.
Toys based on the Disney character, who is played by Miley Cyrus, knocked those scrappy Bratz dolls out of the number two spot. Bratz fell all the way to number four behind just-plain-old, everyday, no-specific-name dolls.
As far as boys are concerned, the list is similar to last year, with video games in general topping the survey and the Nintendo Wii in the number two spot. Legos, cars and Transformers round out the top five.
While the weak economy is leading to expectations of a dismal holiday shopping season, parents could find some bargains in toys.
“The good news for parents is that many retailers are featuring toys as loss leaders this year, heavily discounting and promoting these items to bring shoppers into stores,” NRF President and CEO Tracy Mullin said.
Also in the basket:
CPI drops at record pace in October
BJ’s Wholesale quarterly profit jumps
Why Doesn’t Costco accept food stamps? (N.Y. Times City Room)
Polo Ralph Lauren reported higher second quarter profit, citing increased sales and a lower tax rate.
Polo, whose brands include Polo, Chaps and Club Monaco, affirmed its earnings outlook for fiscal 2009, but it tempered its full-year sales forecast. It now expects a low single-digit increase in 2009 revenue, instead of a low-to-mid single digit increase as earlier expected.
Employees interviewed by Reuters correspondent Chelsea Emery at Circuit City’s Paramus Towne Square, New Jersey store seemed resigned to difficut times ahead. The store is not among the 155 slated to close and employees who work there declined to give their last names.