Retailers, consumers and prices
NPD Group Inc, a market research firm, said on Tuesday that it found consumers are starting their back-to-school shopping later, spending less, and shifting away from discretionary items like shoes, clothes, and beauty items. Instead, they are focusing on necessities like school supplies and calculators.
“Back-to-school will be a big indicator of the consumer’s psyche with regard to overall spending this year compared to last year,” said Marshal Cohen, NPD’s chief industry analyst. “Consumers are clearly putting need over desire. They are more highly influenced by value than by fashionable or trendy products.”
According to NPD’s survey, the number of people who said they either ‘haven’t started’ or ‘don’t plan to shop for back to school’ by the end of July dropped 5 percent from last year .
RadioShack is giving itself a new, shorter nickname – The Shack.
The gadget retailer is introducing a new ad campaign and intends to refer to itself as The Shack – something it says customers have already been doing.
“Our customers, associates and even the investor community have long referred to RadioShack as ‘THE SHACK,’ so we decided to embrace that fact and share it with the world,” said Lee Applbaum, RadioShack’s Chief Marketing Officer, in a statement.
Check out more retail doors closing.
Jones Apparel, which owns Nine West, Jones New York and other brands, said it will close 240 retail stores this year and next.
The company said the move will save it $4 million this year, $15 million next year and $21 million in 2011.
Saving money is the strategy many retailers have adopted over the past year as the recession clobbers sales.
Check out the lack of interest in pens and purses.
Retailers as varied as Coach and Office Depot reported lower quarterly sales, continuing to show that despite some forecasts that the recession may be at an end, consumers are cutting back on just about everything.
Coach sales fell 1 percent and profit, excluding one-time items, dropped 21 percent.
Sales at Office Depot fell 22 percent and the company posted a wider than expected loss, sending its shares down 14 percent.
Oh, and it isn’t just office supplies and fancy bags consumers are cutting back on.
Grocery chain operator Supervalu reported a 4.5 percent drop in quarterly sales as it cut prices to try to keep consumers from going to stores like Walmart.
Economists are looking for “green shoots” everywhere these days, but the consumer still doesn’t seem to be buying it … or anything.
Also in the basket:
CIT courts creditors, plans large debt exchange
Under Armour posts surprise second-quarter profit
PepsiAmericas Q2 profit beats estimates, ups FY outlook
Italian group makes offer for Christian Lacroix (N.Y. Times)
Check out what’s happening in apparel retail, according to UBS analyst Roxanne Meyer.
There were lower promotional levels last week as fall items hit stores, Meyer said in a research note.
Retailers are focusing on plaid woven tops, scarves, skinny and boyfriend denim, leggings, artsy graphic tees, flutter sleeves, boyfriend blazers, ruffles and chunky necklaces. Oh, and skirts are making a comeback.
Meyer said she is starting to see some “more reasonable” price points at Abercrombie & Fitch, which has tried to avoid aggressive promotions that other retailers have used for months to clear excess inventory during the recession.
But she also said demand for $180 blazers, $80 super skinny jeans, $98 boyfriend jeans and $80 beaded silk tank tops at the store will be limited.
Also in the basket:
CIT Group on cusp of $3 billion rescue
Hasbro profit beats, Discovery deal to hurt less
Jarden sees profit, sales meeting or topping view
RVC buys Ellen Tracy collections (WWD, subscription required)
Barnes & Noble consolidates publishing (Wall Street Journal)
from Raw Japan:
Japan is back in deflation, and price falls look like gathering pace as shoppers' bargain-hunting leads stores to cut prices further to weather the worst retail slump in decades.
Retailers large and small reported hard falls in quarterly profits last week, and the few bright spots were focused on those drawing in thrifty shoppers with their cheap but well-made goods.
The recession hammered U.S. holiday sales last year and new research suggests that it also drove up ”shrink” — a retail industry term for shoplifting, employee theft, and administrative errors.
An estimated $36.5 billion was lost to “shrink” in 2008, according to preliminary findings from the latest National Retail Security Survey released today.
It is one of the oldest tricks in the book and a big problem for retailers. So big, in fact, that some estimates suggest that “sweethearting” and other types of employee theft account for almost half of all annual retail theft, or $19.5 billion out of $41.6 billion overall.
from Summit Notebook:
So, what did we learn from executives in the hard-hit luxury and main street retail sectors this week at the Reuters summits?
Our tour will include visits to the company’s distribution center, a Sam’s Club warehouse store and a Walmart supercenter.