Archive for the ‘retail’ Category

Black Friday Sales Bring Holiday Cheer to Nation’s Retailers

Tuesday, December 4th, 2012

Black Friday holiday sales set a record in 2012 with 247 million shoppers visiting the malls or shopping online. That’s 21 million more people than in 2011.  Total sales topped $59.1 billion.  The typical holiday shopper spent $423 over the weekend, a $25 increase over the $398 recorded last year.  The National Retail Federation (NRF) defines the “Black Friday weekend” as the Thursday, Friday, Saturday and Sunday after Thanksgiving.  One of the big stories is that online spending alone soared past the $1 billion mark for the first time ever, according to comScore.

Cyber sales rose 26 percent compared with one year ago, when shoppers spent $816 million.  This year, the average online shopper spent $172.42 over the Black Friday weekend, nearly 40.7 percent of their total purchases.  Of online shoppers surveyed by NRF, 27 percent reported making purchases on Thanksgiving Day, while 47.5 percent shopped on Black Friday itself.  Amazon.com was the most-visited retail website, followed by Wal-Mart, Best Buy, Target and Apple.

Retailers’ door-buster specials drew shoppers to the stores.  “There’s no question that millions of people were drawn to retailers’ aggressive online promotions this weekend, making sure to research and compare prices days in advance to ensure they were getting the best deal they could,” said BIGinsight Consumer Insights Director Pam Goodfellow.  “However, with shopper traffic increasing at department, discount, and clothing stores over the weekend, it’s clear that consumers still recognize Black Friday as one of the biggest in-store shopping days of the year, as they have for decades.”

The NRF had forecast that worries over the possibility of the fiscal cliff and the anemic jobs market might put a damper on holiday spending.  Its guesstimate is that holiday spending will rise just 4.1 percent this year, compared with 5.6 percent in 2011.  A survey by ShopperTrak found that 307.57 million Americans shopped in stores, a 3.5 percent increase over last year.  Bill Martin, ShopperTrak’s founder, is more optimistic.  He notes that store traffic hasn’t reached this level since 2006, possibly marking a return to pre-recession levels and could be a sign of recovery.  “We’ve seen that consumers are willing to shop a few extra stores,” Martin noted.  “This could translate into more impulse buying and stronger sales.”

Let’s Go Shopping!

Tuesday, April 24th, 2012

Despite rising gas prices, retail sales in the U.S. rose 0.8 percent in March, proof that consumers are still filling up their tanks, according to economists.  The rise in purchases follows a 1.1 percent increased in February that was the biggest in five months, according to a survey of 71 economists.  The gain sent retail sales to a record high of $411.1 billion, 24 percent higher than the recession low hit in March 2009.  “Retail sales are going to end the quarter on a positive note,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc.  “Underlying job growth is decent.”

Sales may have been helped by the unusually warm weather. The average temperature was 51.1 degrees Fahrenheit, the warmest on record for the month in the past 117 years, according to the National Oceanic and Atmospheric Administration.  The economy expanded “at a modest to moderate pace” from mid-February through late March as manufacturing, hiring and retail sales strengthened, according to the Federal Reserve’s latest Beige Book report.  The central bank is maintaining its benchmark interest rate near zero until late 2014 to encourage economic expansion.

Americans spent more on building materials, cars, electronics, furniture and clothing in March.  A separate Department of Commerce report showed that American companies restocked at a steady pace in February, which suggests that businesses expect consumers to continue spending this spring.  The retail sales report is the government’s initial monthly look at consumer spending, which represents 70 percent of economic activity.  The increase, along with other positive data on inventories and trade, suggests growth in the January-March quarter could be stronger than first thought.  Economists are estimating growth at an annual rate of between 2.5 percent and three percent in the 1st quarter, which is in line with the annual pace reported for the October-December quarter.  Americans are feeling greater confidence in the economy after seeing hiring strengthen over the winter.  Job gains were typically 246,000 per month from December through February.

In terms of cars, “The industry and consumers have been very resilient in the face of higher pump prices,” Don Johnson, vice president of U.S. sales at General Motors, said.  “The steadily improving economy is playing a role and so is pent-up demand and an improved credit market.”

Corporate stockpiles rose a seasonally adjusted 0.6 percent, according to the Commerce Department. That’s less than January’s upwardly revised gain of 0.8 percent. The increase pushed stockpiles to $1.58 trillion which is nearly 20 percent more than the recent low hit in September 2009, just after the recession ended. Sales grew faster than inventories in February, rising 0.7 percent.  This is a good sign because it is evidence that companies aren’t building too much inventory, which can result in cutbacks in production in the future.

“The pace of inventory building is consistent with what you’d expect to see in a gradual expansion,” said Tim Quinlan, an economist at Wells Fargo.  Businesses are rebuilding their stockpiles after cutting them over the summer in fear of a double-dip recession.  Steady inventory growth in the 1st quarter, as well as a narrower trade deficit in February and stronger retail sales, has lifted the outlook for growth.

American households “have the income to propel their purchases now that we’re seeing job growth,” said Russell Price, senior economist at Ameriprise Financial Inc., the third- best forecaster of retail sales for the 24 months ended in March.  “They have adjusted to the higher price of fuel.  The economy now needs to build on its own momentum.”

2011 Black Friday Pays Off for Retailers

Monday, December 5th, 2011

A record 226 million Americans shopped in stores and online during the four-day Thanksgiving holiday, an increase from 212 million last year, according to estimates by The National Retail Federation (NRF).  These eager shoppers also spent more: The typical holiday shopper spent $398.62, an increase from the $365.34 reported last year.  Approximately 24 percent of Black Friday shoppers were waiting at stores for a midnight opening, a 9.5 percent increase when compared with 2010 when only a few stores were open at that time.  Some 37 percent of midnight Black Friday shoppers were in the 18-to-34 age group.  “Black Friday has evolved from an early morning shopping activity to a late night entertainment,” said Ellen Davis, spokeswoman at the NRF.  “A lot of people stayed up until 1 a.m. or 2 a.m. to go shopping, and then went to bed.”

Sales soared 16.7 percent over the same period last year to $52.4 billion, according to the NRF. “American consumers are taking a deep breath and making the decision that it’s okay to go shopping again, in spite of high unemployment and uncertainty over the stock market and housing market,” Davis said.

The results for the initial holiday shopping weekend are proof that retailers’ efforts to tempt shoppers during the weak economy are working.  Some like Wal-Mart and J.C. Penney are making a stronger push online to compete more effectively with rival Amazon.com.  Major chains like Macy’s, Target, Best Buy opened their doors at midnight on Thanksgiving evening instead of the pre-dawn Friday hours of years past.  The question remains whether retailers’ will be able to hold shoppers’ attention throughout the rest of the season, which can bring in 25 to 40 percent of a merchant’s annual revenue.  Americans remain driven by deep discounting and they’re conscious of their spending budgets.

Even as they spent money, shoppers said that with the high price of gas and other goods, this is not a good time to spend, according to the Bloomberg Consumer Comfort Index.  Retail sales grew a paltry 0.5 percent in October, slowing from 0.7 percent in September, according to the Department of Commerce.  In the weeks just prior to Black Friday, ShopperTrak reported sales had risen 3.6 percent during the week of November 12 and 3.8 percent during the week of November 19, compared to last year.

Analysts were surprised by the number of shoppers and the amount of spending; they had expected sales to be dampened by the nine percent unemployment rate, the high costs of gas and concerns about fiscal upheaval in Europe.  It is uncertain whether retailers will be able to maintain the early momentum for the rest of the season.  “One swallow does not a holiday season make.  After the deepest recession in decades, the solid Black Friday weekend is welcome news, but we’re only in the second quarter of a long playoff game,” said Craig Johnson, president of the consulting firm Customer Growth Partners.

According to ShopperTrak founder Bill Martin, “This is the largest year-over-year gain in ShopperTrak’s national retail sales estimate for Black Friday since the 8.3 percent increase we saw between 2007 and 2006.  “Still, it’s just one day. It remains to be seen whether consumers will sustain this behavior through the holiday shopping season.”

On the whole, holiday spending is expected to grow by a fairly small 2.8 percent to about $466 billion, according to the NRF.  For now, experts agree that retailers will likely have to continue to discount to get shoppers to spend.  “The big question is: How do you close the season?” said Hana Ben-Shabat, a partner at A. T. Kearney’s retail practice.  “This is a very promotional driven shopper.”

American shoppers spent $816 million on Black Friday without leaving the comfort of their computer chairs, a 26 percent increase over 2010, according to ComScore data.  The results reinforce numbers released by IBM Coremetrics that showed online sales on Black Friday grew by 24.3 percent compared with the same period in 2010.  Approximately 50 million shopped online Friday, a 35 percent increase over last year, ComScore reported.

“Each of the top online retailers generated significantly greater Black Friday activity compared to last year,” ComScore Chairman Gian Fulgoni said.  “Amazon.com once again led the pack, with 50 percent more visitors than any other retailer, while also showing the highest growth rate versus last year.  However, it is telling that the top multi-channel retailers also showed strong growth in visitors, demonstrating the importance of the online channel to the retail industry as a whole.”  Amazon, Wal-Mart and Best Buy all reported double-digit percentage gains over last year.

Retailers Making it Easier to Shop Until You Drop on Black Friday

Wednesday, November 16th, 2011

Black Friday – the day after Thanksgiving notable for its power shopping – just got longer as several leading national retailers announced plans to open at midnight. Instead of sleeping off that turkey coma, throngs of shoppers will be waiting in line at Macy’s and Target, both of which will open four hours earlier than normal.

“We’ve been looking at our hours and demand as the holiday approaches and we think the customer will respond,” Macy’s spokesman Jim Sluzewski said.  “In dollars and cents, it probably gives the retailers that are opening extra early another fraction of a day’s sales,” said Scott Rothbort, finance professor at Seton Hall’s Stillman School of Business.  “But it does engender publicity and in this environment that is very valuable.”

“People want to shop through the night,” said Martine Reardon, Macy’s executive vice president of marketing.  She said the expanded hours were in response to customers’ requests.  One year ago, Macy’s opened eight stores at midnight, and the rest at 4 a.m.  According to Reardon, the midnight openings were highly successful.

Retailers have been extending their Black Friday hours for several years; additionally they’re trying to outdo each other by announcing some of their best deals weeks in advance.  They also are responding to shoppers who strategize bargain-hunting weeks in advance.  Already, Black Friday circulars are starting to be leaked to deal sites like Blackfriday.com and Blackfriday2011.com. Just a few years ago, stores were secretive about their discounts and hours until a few days before Thanksgiving.

Some retail industry experts think the early openings are a bad idea. The news is not good for workers, many of whom are desperate for jobs.  “What these retailers have to worry about is: Are they going to have an employee revolt?” said retail analyst Britt Beemer, chairman of America’s Research Group.  “You could be pushing people to the limit of what they are willing to accept.”  Beemer’s research suggests this Black Friday will be the biggest ever, with 50 percent or more of consumers heading out to shop the day after Thanksgiving.  And for the sake of the craziest shoppers, this year’s deals should be worth losing sleep over.

Writing in the International Business Times, Cavan Sieczkowski said that “But with the current unstable economic climate, stores are planning ahead for Black Friday sales and hoping that an early start will allow them to capitalize on increased consumer spending. On Black Friday 2010, retail spending hit $10.69 billion in one day.”

“Consumers are really walking a tightrope here.  They don’t have much room and it’s easy for them to lose balance with very modest shifts in hiring, the cost of food and everything,” said Steve Blitz, senior economist, ITG Investment Research in New York.

Walkability Factor Increases Property Investment Values

Wednesday, July 27th, 2011

According to a recent study, a 100-point scale, a 10-point increase in walkability increases property values by one to nine percent, depending on the property.  Chicago – with a Walk Score of 74 — was one of the nation’s most walkable cities.  The others are New York, Boston, San Francisco, Washington D.C., and Philadelphia.  The least walkable cities are Jacksonville, Nashville, Charlotte, Indianapolis, Oklahoma City, Memphis, Fort Worth, Kansas City, San Antonio, El Paso, Austin and Phoenix.

The report examined the impact on walkability and investment returns on more than 4,200 apartment, office, retail and industrial properties over the past decade.  Gary Pivo and Jeffrey D. Fisher compiled the data using performance information from the National Council of Real Estate Investment Fiduciaries and walkability data from Front Seat.  The study defines walkability as “the degree to which an area with walking distance of a property encourages walking trips from the property to other destinations.”

The Loop and the Near North Side were rated as Chicago’s most walkable neighborhoods with Walk Scores of 96 each.  Just five percent of Chicagoans live in car-dependent neighborhoods.  Illinois’ most walkable city is Forest Park – in the near western suburbs — with a Walk Score of 82; the least walkable is Godfrey – near downstate Alton — with a score of just 20.

Online Christmas Tree Sales Soaring

Wednesday, December 15th, 2010

Online Christmas Tree Sales Soaring

The annual ritual of heading to the local Christmas tree lot or cut-it-down-yourself farm is giving way to the age of the internet and online buying.   Even Rick Dungey, a spokesman for the National Christmas Tree Association, has joined the trend, saying “I point and click and it shows up on my front door.  For me, it’s a convenience.”

Retailers such as Target and Costco are jumping on the bandwagon, offering fresh trees online for the first time.  According to Target spokeswoman Jill Hornbacher, the online sales are seen as a convenience, particularly for people who live in cities.  Chub Lake Tree Farm, a northern Minnesota family farm, notes that 10 percent of their sales are now made online.  “It started by customer demand and we saw a niche there,” said Jim Whorton, who owns the farm.  “We have customers who’ve moved away to Texas or Nebraska or to the Twin Cities, or who like our trees and want to ship a fresh one to their families.”

Although tracking the number of Christmas tree sales is virtually impossible, a Harris Interactive poll shows that approximately three percent of the 28 to 30 million farm-grown trees are now sold online.  Dungey believes that having Target’s broad consumer reach is a welcome way to sell trees.  “It signals that retailers recognize that not all consumers are equal.  Whether you’re a big-box or a specialty store or a farm itself, good retailers realize they want a broad array of buyers.  Not everyone wants to buy a tree the same way,” Dungey said.

Target’s success with online Christmas tree sales demonstrates how competitive the holidays have become, according to Marshall Cohen, chief retail analyst with NPD Group.  “Is it bad?  Does it change the tradition of the holiday?  Absolutely yes.  But guess what?  That’s not the retailer’s issue.  The retailer’s job is to try to make your life better so you’ll spend more money.  If you want to go and cut a tree down, go ahead.”