Disappointing sales earlier this summer have prompted worries about what retailers can expect the rest of the year, including the all-important back-to-school and Christmas shopping seasons. Some chains are not taking any chances, not even waiting until summer is over before launching holiday promotions.


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Retail News Breaks Archives

Retailers jittery about short-term growth

July 26th, 2010
Retailers have their fingers crossed that positive forecasts for the back-to-school season will bear out.

NEW YORK – Disappointing sales earlier this summer have prompted worries about what retailers can expect the rest of the year, including the all-important back-to-school and Christmas shopping seasons. Some chains are not taking any chances, not even waiting until summer is over before launching holiday promotions.

Target Corp.’s web site hosted a “Back in Black Friday” sale, meant to evoke the holiday shopping excitement normally associated with the day after Thanksgiving, on July 23.
The online-only sale promised discounts averaging 40% off regular prices on more than 500 products ranging from clothing to Blu-ray disc players.

Toys R Us Inc. hosted a “Christmas in July” sale of its own, both in stores and online, and Sears Holdings Corp.’s Sears web site offered free shipping on early Christmas purchases.
The Sears and Kmart chains also brought back their Christmas Club Card programs, which allow consumers to set aside money in advance for their holiday purchases.

The program allows consumers to establish Club Cards with as little as $5 between now and October 31, and then add value to the cards between now and Christmas. The retailer will also offer a 3% bonus — up to $100 — on the value stored on the card by November 15.

Industry observers say the early attention to Christmas is partly due to disappointing June sales, which have made retailers jittery about the potential for a double-dip recession that could hobble sales in the second half of the year.

Data released by the U.S. ­Department of Commerce showed that while retail sales (excluding autos and auto parts) in June were up 4.4% compared with the comparable prior-year period, they were also down 0.1% from May.

“Although there is no question that the economy and the retail industry are in a considerably better place today than a year ago, retailers continue to face strong economic headwinds, limiting the industry’s short-term growth,” Retail Industry Leaders Association president Sandy Kennedy said when the Commerce Department figures came out. “Persistent high unemployment continues to drag down retail sales, further dampening hopes of meaningful near-term growth.”

A survey commission by the National Retail Federation (NRF) suggests good news for retailers regarding the upcoming back-to-school shopping season, which many analysts see as an important indicator for the second half of the year.

The NRF’s 2010 Consumer Intentions and Actions Back to School survey, conducted by BIGresearch, found that the average American family will spend $606.40 on clothes, shoes, supplies and electronics, compared with $548.72 last year. Total spending on school-age children (including college students) is expected to reach $55.12 billion.

“We are encouraged by the fact that parents are eager to start their back-to-school shopping this year, but the industry still remains cautiously optimistic about recovery,” said NRF president and chief executive officer Matt Shay. “As the second half of the year gets under way, retailers will gauge their customers’ spending appetites, which often serve as a bellwether for the all-important holiday season.”

The survey found signs that the economy will continue to play a role in American families’ ­back-to-school preparations. This year’s poll found that 44.3% of Americans said they will buy more store brand or generic products, compared with 41.7% who said so last year. In addition, more parents say they will do comparison shopping online to find the lowest prices (30.3% compared with 26.4% in 2009).

Discounters remain the top choice for back-to-school shopping, picked by 71.2% of survey respondents. Other popular destinations include department stores (53.9%), clothing stores (49%), electronics stores (23%) and office supply stores (41.2%).

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