FINANCE

Customer Growth Partners forecasts sluggish 2.8% rise in holiday sales; apparel and accessories strongest categories

BY Marianne Wilson

New York — Holiday sales will reach a record $556.8 billion, a sluggish 2.8% increase from 2011, according to retail consultancy Customer Growth Partners’ 11th annual Holiday Forecast.

“The forecast is less than half of 2011’s 5.8% growth rate, and represents a further deceleration from this year’s already tepid 3.7% back-to-school season growth,” said Craig R. Johnson, president, Customer Growth Partners, New Canaan, Conn. CGP’s forecast is below consensus estimates calling for nearly 4% growth, as represented by the National Retail Federation’s 4.1% growth forecast.

Key CGP forecast findings include:

  • Apparel and accessories will be the strongest merchandise category, led by burgeoning performance wear growth, an on-fire footwear sector, and strong off-price retailer growth.
  • E-commerce will rise by 11%, a sharp deceleration from holiday 2011’s 17% growth.
  • Luxury retailers will see growth of only 7% this year, down from over 12% in 2011.
  • Two non-traditional retailers, Amazon and Apple, will enjoy the fastest growth among Top 10 retailers — but each well below last year’s breakneck pace.
  • Consumer electronics retailers — other than Apple — will see slightly negative growth.
  • Key factors depressing holiday sales include weak disposable income growth, stubborn unemployment woes, and savings rates no longer falling from recession era highs.
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FINANCE

Whole Food Q4 profit jumps nearly 50%

BY Staff Writer

Austin, Texas — Whole Foods Market Inc. said Wednesday that its fiscal fourth-quarter profit increased nearly 50% on strong sales. The grocer’s company’s net income rose to $112.7 million for the period ended Sept. 30, up from $75.5 million a year ago.

Revenue rose nearly 24% to $2.91 billion, with an extra week in the most recent quarter. Same-store sales were up nearly 9%.

“We ended the year with strong sales growth and record fourth quarter results, delivering the best year in our company’s 32-year history,” said John Mackey, co-founder and co-chief executive officer of Whole Foods Market. "The pace of new store openings and lease signings continues to increase, and our accelerated growth plans are on track. We expect healthy comparable store sales growth and continuing operating margin improvement in fiscal year 2013."

Whole Foods said that Hurricane Sandy negatively impacted sales for the first five weeks of the first quarter, particularly in the Northeast region. The company said it is working with its insurer to assess the damages, a process that could take several months. It expects to record a one-time charge in the first quarter for estimated uninsured losses.

Whole Foods earned $465.6 million for its 53-week fiscal year, compared with $342.6 million for its 2011 fiscal year. Annual revenue increased to $11.7 billion from $10.1 billion.

The company recently signed 11 new leases averaging 37,500 sq. ft. in size in Altamonte Springs, Fla.; Clearwater, Fla.; Hyannis, Mass.; North Carolina; Morristown, N.J.; New York City (two stores); Philadelphia; South Hills, Pa.; Dallas, and Seattle. These stores currently are scheduled to open in fiscal year 2014 and beyond.

In addition, Whole Foods recently announced plans to purchase six leases from Johnnie’s Foodmaster, expanding its presence in the Greater Boston area to 26 stores. Johnnie’s Foodmaster will close the stores prior to the November 30 transaction closing date. Whole Foods plans to remodel and reopen the locations under their own banner before the end of September 2013.

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OPERATIONS

Target partners with CNET to offer expert product reviews on electronics

BY Staff Writer

Minneapolis — Target Corp. announced a partnership with CNET – a top website for consumer electronics and tech news – to provide guests with CNET Editors’ Picks for Target, in time for the holiday season. The collaboration is part of a larger, ongoing partnership between Target and CNET.

Beginning Nov. 11, Target guests can shop the electronics department with even more confidence and ease thanks to unbiased expert reviews that will appear with select electronics items both on-shelf at all Target stores nationwide and within the “Expert Review” tab on Target.com.

“We want our guests to think of Target first when it comes to their consumer electronic needs,” said Scott Nygaard, VP merchandising, electronics at Target. “We know our guests find expert reviews helpful when making purchasing decisions; as the respected industry expert, CNET was a clear choice to provide this expertise to Target’s guests.”

The new feature will include 25 product reviews across Target’s electronics department. CNET editors rated products based on ease of use, style and value. The product reviews will be clearly visible in stores, with on-shelf signage prominently featuring the CNET logo and qualifying criteria, such as “Best first digital SLR” for the Nikon D3100. Shoppers can use the QR code on the signs to access the full product review on the chain’s website.

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