Shop Talk
Retailers, consumers and prices
Check Out Line: Summer job search advice for teens
Check out tough times for job-seeking teens.
Outplacement firm Challenger, Gray & Christmas said teens looking for a summer job will need to dedicate themselves full-time to the search, meaning getting a full-time job will be a full-time job. While many employers have filled summer positions, some may need more than expected while others delayed hiring until summer business conditions became clearer, Challenger CEO John Challenger said.
“The point is, you never know if or when a job opening is going to materialize, so you want to keep pushing,” he said in a statement.
Earlier this spring, the Challenger firm predicted an improved summer hiring outlook for teens compared with last year, when employment among 16- to 19-year-olds grew by less than 1.2 million jobs from May through July.
“It is unlikely that summer employment gains among teens will reach pre-recession levels, but we should definitely see increased hiring compared to 2008 and 2009, which experienced the weakest summer teen job growth since the 1950s,” Challenger said.
The Challenger firm said federal data showed that summer employment among teens last year grew by 1.16 million, slightly better than the 1.15 million added in 2008 between May and July, the fewest since 1954. In 1999, at the height of the dot.com job boom, summer employment for teens grew by almost 2.02 million.
Making matters worse for teens, they are competing with recent college graduates and job seekers who have two or more years of on-the-job experience and are willing to take almost any job to get a steady paycheck, Challenger said.
UPS to U.S. consumer: relax, have an app!
UPS expects healthy profits in 2010, no thanks to the U.S. consumer the company is trying to entice with iPhone and BlackBerry applications.
Announced in November and December, the free applications enable users to create and track shipments, calculate rates and delivery times and find the nearest UPS location.
“People can browse the web on their phone as easy as on their home computer, so that’ll make it easier and easier to shop for holiday presents and birthday gifts,” Chief Financial Officer Kurt Kuehn told Reuters.
Online shipping is a sweet spot for both UPS and rival FedEx Corp, both considered economic bellwethers as they handle such a huge chunk of the world’s shipping. But it will be a whole lot sweeter when the U.S. economy catches up with the rest of the world and the U.S. consumer relaxes and starts to spend again. FedEx has iPhone and BlackBerry applications as well.
In the fourth quarter results it reported today, for example, UPS announced a 19 improvement in operating profit in its international segment compared with a drop in domestic operating profit of almost the same size.
“It’s easier than ever for them to shop now,” Kuehn said. “Whether they have enough money to shop, that’s another question.”
(Photo: Reuters)
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.
US housing will continue to fall in ’10 as strategic foreclosures grow from the 25% of total they are today. Read a wild California foreclosure story at http://storyburn.com
Survey: Most consumers plan to spend less this holiday season
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 Line: Diamonds no longer a girl’s best friend?
Check out the quarterly results at jeweler Tiffany & Co. It’s enough to make one question Marilyn Monroe’s choice in songs.
The company posted a slightly weaker-than-expected first-quarter profit and said sales dropped 22 percent as shoppers avoided jewelry. Companies like Tiffany and even more-affordable peers such as Zale Corp have seen demand hurt in the past year as consumers focus on buying necessities in the recession.
In a sign that maybe things are at least stabilizing, Tiffany maintained its full-year profit outlook. Even better, the U.S. economy contracted slightly less than initially estimated in the first quarter.
However, consumers remain under pressure as plunging home prices, rising unemployment and a new wave of foreclosures are clouding prospects for a quick end to the U.S. real estate debacle.
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J Crew beats in quarter, shares rise 17 percent
Organic Dairies Watch the Good Times Turn Bad (New York Times)
Check Out Line-Retail sector racks up more bad news
Check out the not-so-chipper news in the retail world.
Restaurant chain Burger King reported lower profits and cut its full-year forecast due to the currency fluctuations, while cosmetics and perfume companies Estee Lauder and Elizabeth Arden rang up lower, albeit better-than-expected, profits and said they would cut jobs.
Indeed, retailers overall posted the second weakest monthly same-store sales performance since Thomson Reuters began tracking the data in 2000 as heavy job losses, weakness in the U.S. housing sector and the still-tight credit markets have many consumers closing their wallets.
In the mixed-bag camp, apparel retailer Gap saw same-store sales fall more than expected, but raised its full-year profit outlook.
There is some good news out there, however.
Discount giant Wal-Mart posted a better-than-expected increase in sales at U.S. stores open at least a year, almost double what analysts had expected. Meanwhile, Kellogg’s quarterly profit rose and the cereal maker stood by its 2009 profit outlook, and department store operator Macy’s saw a smaller-than-expected decline in same-store sales and raised its fourth-quarter profit forecast.
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Overall scenario is Not positive at Present. Though some stores are doing well, But that may be due to their Own Image and clientage.
This Junbo stimulus package may hopefully help revive the economy. However,it may be too soon to think that Bad days are over.
Still,we need to remain positive in such odd times.
Check Out Line: More bad news for books and drug stores
Check Out some weakness in book and drug stores sales.
Borders dumped Chief Executive George Jones less than three years after he joined the No. 2 U.S. specialty bookseller, replacing him with a private equity executive with experience turning around ailing companies. The company, which reported a sales decline of almost 12 percent during the holiday shopping season, also named a new chief financial officer as well as replacing its executive vice president for merchandising and marketing.
In November, Borders said it was no longer pursuing a possible sale of the company even as it posted a larger-than-expected operating loss.
Meanwhile, same-store sales at drug stores were not what those retailers were hoping for. Walgreen, which saw sales at store open at least a year rise 4.9 percent in December, said shoppers focused on basic necessities, while staying away from seasonal items. Rite Aid‘s same-store sales in the same period slipped 0.2 percent.
President-elect Barack Obama plans to propose up to $310 billion in tax cuts as part of his massive economic stimulus package in an effort to help the U.S. economy escape its recession.
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Check Out Line: Black Friday
Call it a test of the American consumer’s mettle. How many will feel confident enough about the economy, and their own future within it, to spend money that is increasingly hard to come by? How many will resist the siren call of steep discounts and sales for even the hottest gadgets, like those available at Apple Inc’s stores?
This Black Friday, such questions are not only central to the future of many of the best known U.S. retailers, but amount to a key indicator of how quickly the country’s consumer-led economy will shrink in the coming months. How deep a recession could it be, how long might it last?
At Shop Talk, our colleagues are out across the country today, talking to scores of shoppers and documenting their stories, the hardships they have seen this year and the fears they voice about the coming year, after the holiday gatherings are over.
Nearly 45 percent of Americans are expected to turn out for the sales that started today and last through the weekend, according to the International Council of Shopping Centers. Stay tuned for anecdotes and pictures, and our full coverage on Reuters’ Holiday Shopping page. Let us know what you are seeing too.
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Check Out Line: Apparel sales shrinking with economy
Check Out what the shrinking U.S. economy is doing to apparel sales.
The Paris-based Organization for Economic Cooperation and Development says the U.S. economy has probably slipped into a recession that will last through the middle of 2009.
But forget Paris, you don’t need to look any further than today’s results from apparel retailers for proof that the U.S. economy is in a slide.
Two retailers that cater to women over the age of 35, Talbots Inc and Chico’s FAS, each saw sales at established stores fall more than 13 percent in the latest quarter.
Third-quarter net profit at Chico’s, which also operates White House Black Market stores, withered to $2 million from $23.6 million a year earlier as mark-downs also pounded profits.
Talbots, which specializes in classic looks, saw its loss from continuing operations expand to $14.8 million from less than a million in the year-earlier third-quarter.
Elsewhere, Charming Shoppes, which sells plus-size clothing for women, had a bit of good news. It reported a smaller-than-expected loss, but said it expects a wider loss for the holiday quarter.
Check Out Line: Weak economy keeps socking it to retailers
Check out the lower expectations in the retail world.
Discount retailer Target Corp rang up its fifth consecutive lower quarterly profit, suspended almost all of its share buyback program and cut capital spending plans as cash-strapped consumers shifted away from its trendy merchandise to staples like food and toiletries.
Meanwhile, Lowe’s Companies, the No. 2 home improvement retailer, posted a lower profit, but even worse cut its fourth-quarter profit forecast below Wall Street’s expectations, citing rising unemployment, falling home prices and tight credit as reasons homeowners are putting off some renovations and purchases.
Most economists say the U.S. economy is in recession and will shrink even faster in the fourth quarter. The news reflects the pressures consumers are under.
The result? Fewer shoppers plan to use credit cards to buy gifts this holiday season and most have yet to complete their gift buying as retailers brace for their worst holiday season in about three decades. In fact, more consumers are simply putting away their plastic.
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