Comps Show Mixed Results
What is particularly noteworthy about the June 2008 comp-store-sales results is the comparison to very poor results in June 2007. Notably, June 2007 was the first month to indicate broad weakness in consumer spending.
It appears that the economic-stimulus checks and heavy promotion in June 2008 did provide some sales lift, particularly at Kohl’s, J.C. Penney, Stage Stores, Family Dollar, Fred’s, Ross and Gap. All of these companies generated results better than their recent trends. In spite of the stimulus checks, comp-store sales continue to deteriorate at Nordstrom, Saks, Abercrombie & Fitch, Bon-Ton, Limited and Zumiez. It is unlikely that many Nordstrom and Saks core customers received checks. In spite of all external factors, trends continue to improve at Wal-Mart, Aeropostale, The Buckle, The Children’s Place, Costco and TJX. The entire Trending Report is available at www.gordmangroup.com .
The Retail Trend Tracker: When trends are not strong, management frequently turns to advertising as the solution. Unfortunately, I have never seen it work, not once.
Advertising is the communication a company should use after it has created a “customer-relevant strategy.” When management turns to advertising as the solution to weak sales, there is typically little change in the sales trend with an increased advertising expense and reduced profitability due to margin deterioration. As a strategy, “perfuming the pig” simply does not work.
In our recent Retail Trend Tracker study, we asked a national sample of consumers, who actually spent more at a specific retailer during the past three months, how different factors affected their spending behavior. The accompanying chart compares the influence of having merchandise the customer wants with the influence of advertising.
Even with the aggressive promotional advertising that has been utilized by retailers to drive traffic, having the right merchandise is the dominant factor to increase sales.
Target.com offers installation services
MINNEAPOLIS Target.com customers will now have access to next-day installation services for their electronics through a new deal with Zip Express Installation.
Through Zip Express, Target.com customers will have the first installation option through the retail chain and can purchase installation packages alongside any major home electronic purchases made on Target.com, with next-day installation available anywhere in the United States and Canada. The selected service is rung up with the product at checkout and the customer can then call the toll free number or visit www.zipinstallation.com immediately after purchase to schedule a specific day and hour that is most convenient for installation.
“Many retailers today rely on the additional revenue gained from installation services,” said Chris Mauzy, president and ceo of Zip Express Installation. “Our services provide retail partners with the same benefits achieved from an in-house installation service, but without the overhead required to support the in-house program themselves.”
Wal-Mart asks shoppers to share BTS savings tips
BENTONVILLE, Ark. Wal-Mart has announced a new promotion in which it is asking consumers to share their money-saving tips for the back-to-school season. Visitors to the company’s MakeYourDollarStretch.com site can submit their stories on how they have learned to save on back-to-school spending for the chance to win a $600 Wal-Mart gift card.
The winners will be chosen by Ellie Kay, financial expert and Web site contributor and one finalist, receiving the most votes from visitors to the site, will take home an additional $600, Wal-Mart reported.
“Considering today’s inflation pressures and the rising need families have to better manage their spending, it is becoming more important than ever for parents to think about shopping smart and looking for resources to save money,” said “We all have ideas to share, and I expect this challenge will generate even more.”