Retailers, consumers and prices
Check Out mixed news on the retail sales front.
The retail data service of MasterCard Advisors said U.S. retail sales fell as much as 4 percent during the holiday season. SpendingPulse tracks sales activity in the MasterCard payments network and couples that with estimates for other payment forms.
It found that luxury sector sales fell 34.5 percent, as job losses and stock market declines weighed on higher-end shoppers. Specialty electronics and appliance sales were off 26.7 percent.
But the news wasn’t all bad. Online retailer Amazon.com said this year’s holiday sales season was its best yet, with more than 6.3 million items ordered on its site on the peak shopping day of Dec. 15. Online sales were likely aided by winter weather in some parts of the United States.
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)
Florsheim mens shoes are reasonably classy. They were imortalised, for example, by snappily dressed Jack Nicholson in Roman Polanski's "Chinatown". He was rather distressed, film buffs will recall, by what a flood drainage canal did to them.
So it was something of a sign of the times last week that a visitor to a normally genteel Florsheim shoe shop in a Maryland mall got the hard sell from two salesman. Simply popping in to ask a question, our hero was essentially told -- firmly -- that he could not afford to leave without purchasing some footwear. The price was right, he was told.
Retailers say it can be difficult to measure their monthly sales results accurately on a year-over-year basis because of calendar shifts — sometimes a holiday falls in one month, boosting results, while the next year the holiday shifts into a different month, hurting results.
The most drastic case of this is usually seen in March and April, when the timing of the Easter holiday can help March sales and hurt April, or vice versa.
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)
Give the "Glass is Half Full" award to Stan Glasgow, Sony's top U.S. electronics executive, ahead of what could be the most crucial (and potential painful) "Black Friday" shopping weekend in many years. It's normally a happy time of year, filled with family gathering, gifts, etc.
Perhaps, just perhaps, things aren't as bad as they seem, Glasgow told a gathering of journalists on Thursday, suggesting that there are great bargains to be had on cool gadgets and big TVs, if consumers can overcome their apprehension.
The financial crisis has hit sales of everything from cars to homes to lattes. Now women scared about the market, and maybe even their own jobs, are wearing the old standbys in their closets rather than splurging on new clothes for work. At least, that’s what’s happening over at AnnTaylor, which expects a bleak fourth quarter.
Ann Taylor, the company’s stores stocked with business and business casual clothing, is feeling the “significant impact the financial crisis is having on the professional working woman,” Chief Executive Kay Krill said during a conference call on Friday.
“Corporate headcount reductions and rising fears of future unemployment have made our client cut down or even cut out her spending all together,” Krill said.
Ann Taylor stores are seeing a “dramatic pull back” in items like suits and workplace separates, which represent about a third of the items in its stores. Instead of buying a new suit, a shopper might just spruce up her wardrobe with a couple of tops.
“I think it’s a different day and definitely she’s not interested in suits. I think that women want their wardrobe to work harder for them. They want it to be able to go to work and on the weekend and that’s what we’re seeing happening.”
Over at the more casual Ann Taylor LOFT stores (seen here) sweaters, dresses, denim and other casual items were the top sellers last quarter, while shoppers shyed away from “refined separates,” such as shoes, bags and jewelry.
One bright spot? Cashmere, Krill said. Apparently, when the going gets tough, women wrap themselves in a little bit of softness to cushion the blow.
The Republican National Committee has spent more than $150,000 since late August to outfit Palin and her family in the fanciest of duds from department stores like Saks and Neiman Marcus, says politico.com.
Macy’s, which also runs the Bloomingdale’s chain, is the latest retailer to see consumers shy away from purchases of new fall clothes as they try to stay afloat in the economic downturn. Several clothing chains and department stores posted dismal September same-store sales earlier this week.