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Monday News & Notes

Published November 28, 2011 Uncategorized Leave a Comment
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Analysts are giddy over the impossibly strong retail results over the Holiday weekend, which we summarized earlier today. A few caveats though:

Consumers are notoriously unreliable when it comes to estimating their own spending and the unofficial kick-off to the Holiday shopping season is not a very good indicator of how the rest of the period will go. Take the NRF’s report that Thursday-Sunday sales jumped 16.4% to $52.4 billion this year based on a survey sample of 3,826 consumers. This same survey projected that Black Friday weekend sales surged 18.5% in 2008 and consumers said they each spent 7.2% more than the previous year. When all was said and done, total Nov-Dec retail sales that year plunged 4.4%.

Nevertheless, all eyes now turn to “Cyber Monday” results. In case you’re wondering, this is a marketing term created by Shop.org back in 2005 so online-only retailers didn’t feel left out of the Black Friday parade. Shoppers of course have fully embraced the made-up Holiday, as last year’s haul topped $1 billion, which was the largest online selling day of the year. As of noon today, IBM says sales are up about 20% over last year and we wouldn’t be surprised to see total Monday online sales above $1.3 billion.

Just remember, we are still in the early innings and while this past weekend was strong, one-third of all holiday sales are historically made in the week prior to Christmas.


Retail Reads to Start Your Week:

  • Walmart’s Black Friday Disaster: Website Crippled, Violence In Stores (TechCrunch)
  • IPad-Crazed Toddlers Spur Holiday Sales (Bloomberg)
  • Clouds at PacSun: Retailer looking for cash as it loses its cool factor (NY Post)
  • Retail Becomes Fastest-Growing Mobile Category (eMarketer)
  • 15 Facts About McDonald’s That Will Blow Your Mind (Business Insider)
  • Cash-Strapped Americans Largely Swallow Price Hikes During Holidays (Huffington Post)
  • Kindle sales quadrupled on Black Friday over last year (Amazon)
  • Retailers tap digital tools for seamless shopper experience (Warc)
  • India finally opening its $400 billion retail industry to foreign chains (Businessweek)
  • Retailers arming staff with in-store mobile devices (WSJ)
  • How Smartphones, Price-Check Apps, and Daily Deals Are Changing the Holiday Shopping Experience (Time)
  • Black Friday Boom Masks Physical Retailers’ Desperation (Yahoo! Finance)

Black Friday Weekend Wrap: Retail Spending by the Numbers

Published November 27, 2011 Uncategorized 1 Comment
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By all indications, the Holiday shopping season got off to a robust start as a record number of consumers visited stores and made purchases online this past weekend.

However, Black Friday weekend has historically not been a very good predictor of overall Holiday retail sales. Both the National Retail Federation and ShopperTrak saw record spending over Black Friday weekend in 2008, but overall that Holiday season saw by far the worst performance on record as overall sales in the November-December period tumbled 4.4%.

Nonetheless, it appears the American consumer is still willing to spend despite severe economic headwinds and near record-low confidence. We believe chains including Best Buy, Macy’s and Walmart (despite some well-publicized issues) benefited the most from pre-midnight openings, strong merchandising and competitive price-value relationships, while not surprisingly laggards such as Sears Holdings and Gap continue their struggle to connect with shoppers.

Below is a summary of Black Friday weekend spending by the numbers. We will update these figures on Tuesday as additional metrics become available and report on Cyber Monday, which is expected to generate over $1.2 billion in e-commerce spending:

National Retail Federation (NRF):

Black Friday Weekend Retail Shopping Estimates

  • department stores continue to be the most popular shopping destination (48.7%), followed by discount stores (37.5%), the internet (35.2%), electronics stores (30.8%), clothing/accessories stores (24.6%) and grocery stores (23.8%)
  • avg male spent $484.24 vs $317.19 per avg female, with average male spending nearly twice as much ($201.62 vs $101.93) online
  • those making more than $50k spent nearly 80% more ($493.31) vs those making less than $50k ($274.27) and well more than twice as much ($202.91 vs $87.97) online

“Stuffed to the brim from their holiday meals and eager to shop, more consumers than ever turned out for retailers’ Black Friday promotions, a promising sign for the economic recovery,” said NRF President and CEO Matthew Shay. “After an historic holiday weekend Continue reading ‘Black Friday Weekend Wrap: Retail Spending by the Numbers’

Walmart Sees Improving U.S. Trends, but Remains Cautious

Published August 17, 2011 Uncategorized Leave a Comment
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Walmart is the ultimate bell-weather of the U.S. consumer economy, selling merchandise in just about every product category except cars between its namesake and Sam’s Club stores and representing nearly 10% of all U.S. retail (excluding auto & restaurant) sales.

The company has struggled of late, dealing with increased competition from online merchants such as Amazon.com, dollar and discount stores threatening their “everyday low-price” position, and especially with a low-income consumer living paycheck-to-paycheck.

However, their latest earnings report suggests trends are slowly improving. Following 8 consecutive quarters of negative same-store sales (excluding fuel) in the U.S., Walmart said comparable sales were flat in Q2, up 0.8% including gas. Much of the strength can be attributed to growth at Sam’s Club, with saw same-store sales increase 9.6% (+5.0% ex fuel) in the quarter.

Walmart U.S. still posted its 9th straight quarter of comp declines (-0.9%), but it was the smallest decrease in 8 quarters and the company said sales trends improved in June and turned positive in July as both customer traffic and ticket gained as the quarter progressed.

Walmart - Quarterly Same-Store Sales by Segment

CEO Mike Duke said “I’m encouraged by the sales improvements in our Walmart U.S. stores. Comps have improved sequentially month-to-month within the quarter. In fact, this was the best quarterly performance since the third quarter of fiscal 2010. The goal of the Walmart U.S. team remains positive comps by year end.”

One of the main challenges the company faces is many shoppers no longer view them as the low-price leader. Both Duke and Bill Simon, President & CEO of Walmart U.S., spent much of yesterday’s conference call discussing the hardships facing their core consumer and how they are working on regaining the throne as the “everyday low-price” king. Continue reading ‘Walmart Sees Improving U.S. Trends, but Remains Cautious’

Tuesday News & Notes

Published August 16, 2011 Uncategorized Leave a Comment
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Chain Store Sales were mixed last week, as the effect of falling gas prices was offset by stock market volatility and weakness. However, indications are that back-to-school sales have been relatively strong and consumers will hold off until after BTS season to reassess their spending intentions.

The International Council of Shopping Centers (ICSC) reported that chain store sales fell 1.5% compared to the prior week, the third consecutive decline and the steepest drop in 3 months, while growing 3.5% over the prior-year period during the week ending Aug 13th.

ICSC-Goldman Sachs Weekly US Chain Store Sales

“Last week’s large scale stock market drops and wild volatility added to consumers concerns about the slowing and failing economy and as a result pulled back on their overall spending once again,” said Michael Niemira, ICSC’s vice president of research and chief economist. “The one positive is that gasoline prices dropped across the country last week, which might begin to restore some consumer confidence for the rest of the month—even though gasoline prices at the pump remain up about 31 percent from the same point in 2010,” Niemira added.

The Johnson Redbook Index rose 4.7% year-over year and Redbook noted that business is generally balanced between summer clearance and back-to-school/fall buying. Redbook analyst Catlin Levis said “As the school year nears, sales appear to be slightly above target year-to-ate, although the impact will be easier to assess next month as consumers are increasingly buying closer to need.”

Meanwhile, ShopperTrak saw a 3.6% gain over last year and 2.5% rise week-over-week. Bill Martin of ShopperTrak said “This week will be one of the biggest shopping weeks for Back-to-School. Back-to-School retail sales will then taper off as most students start their school year toward the end of August and during the beginning of September.”

E-Commerce Sales increased by doubled digits for the seventh straight quarter in Q2, according to the Dept. of Commerce. Online sales rose 17.6% during the 3 months ended June 30th to $47.5 billion and have risen 17.7% for the first six months of 2011 to $93.6 billion compared to last year. Continue reading ‘Tuesday News & Notes’

Monday News & Notes

Published May 16, 2011 Uncategorized Leave a Comment
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  • The Census Bureau said this morning that e-commerce sales reached $46.0 billion (seasonally adjusted) in the first quarter, 3.4% higher than Q4 and a 17.5% increase from the year-ago period, representing 4.5% of overall retail sales. Growth was even stronger than projected by comScore, who last week estimated online sales rose 12% over last year’s 1st quarter. After declining for 3 straight quarters during the recession, year-on-year e-commerce sales have now risen by double-digits for six consecutive quarters and have increased seven straight quarters overall. Amazon.com dominates the list of top e-commerce retailers, and with a 44.6% increase to nearly $5.5 billion in North American sales in the first quarter, the online giant represents more than 11% of total e-commerce sales in the U.S. Internet Retailer has an updated list of the 500 largest online retailers in the U.S. based on 2010 sales.
Estimated Quarterly U.S. Retail E-Commerce Sales
  • J.C. Penney reported a 6.7% increase in net income for the 1st quarter on cost-cutting initiatives and the increased penetration of private and exclusive brands, as earnings rose 12% to $0.28 per share, above the $0.24 analysts were expecting. Total sales rose 0.4% to $3.94 billion, driven by a 3.8% increase in same-store sales and a 6.6% gain in internet sales, which reached $376 million during the quarter. The company continues to benefit from its private label offerings such as Liz Claiborne, and especially its exclusive brands offered through shop-in-shops including Sephora (now offered in 254 stores) and MNG by Mango (now in 292 locations). For the full year, JCP raised its profit-per-share forecast 15 cents, to a range of $2.15 to $2.25, above Wall Street forecasts. However, take a peak under the hood and performance appears less robust than the bottom line would suggest.

    “Our ability to deliver on our objectives in the first quarter reflects the progress we are making in executing the Long Range Plan for growth we announced in April 2010,” said Myron E. (Mike) Ullman, III, chairman and chief executive officer. Continue reading ‘Monday News & Notes’

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