Moody’s: Industry real operating income to be flat or rise only 1% in 2011
New York City — The U.S. retail industry will perform in line with sluggish U.S. GDP growth through 2012 as persistent unemployment, stock market volatility and economic gloom weigh on consumer confidence and spending, according to a new report by Moody’s Investors Service.
"Our outlook is stable, and we expect real operating-income will stay flat or rise only 1% in 2011, and increase a mere 2%-3% in 2012," said Margaret Taylor, a Moody’s VP and senior credit officer. "While consumers face headwinds, retailers remain challenged by increased commodity prices."
These constraints, coupled with reluctant consumers means that holiday sales and earnings growth will be tepid compared to last year, Taylor added.
"Stringent inventory management tempered defaults in the recent recession and we expect that to continue, although margin risk remains," she said.
Moody’s expects drug stores, discounters, dollar stores and auto-parts retailers to show the most stable operating earnings, as supermarkets continue to feel pressure from alternative food retailers.
In addition, the report notes that home-improvement retailers will remain stable although the current divergence between competitors is expected to continue. Apparel retailers will have a tough second half but will likely improve throughout 2012, according to Moody’s.
Recent earnings misses by industry leaders Sears Holding Corp, Lowe’s Cos. and Gap are a factor in Moody’s downwards revision of industry-wide operating income, now expected to rise no more than 1% in 2011 before rising a still modest 2% to 3% in 2012.
For the full report "Downbeat Consumer and Fragile Economy Will Restrict Earnings Growth in 2012," go to moodys.com.
Sears enhances online shopping with digital local ads
Hoffman Estates, Ill. — Sears Holdings announced it is now offering digital local ads available on its sites searslocalad.com and kmartlocalad.com. The new ads provide customers with prices and offers from their very own local Sears or Kmart stores, real-time stock checks and access to ads 24 hours a day.
"We understand that our customers lead busy lives and are always looking for ways to save time while maximizing their budgets," said Dave Friedman, senior VP and president of marketing, Sears Holdings. "The new digital local ads allow us to customize promotional offers to local communities so we can better service our customers, while saving them time and money."
The ads highlight products and offers available to them at the Sears or Kmart stores where they like to shop, as well as provide real-time stock checks to eliminate unnecessary shopping trips.
Customers will be able to shop by category, create shopping lists and share lists by email or print them for in-store shopping or send to their mobile devices.
Macy’s launches new online destination for fashion, beauty and home content
New York City — Macy’s has launched a new online destination, called mBLOG, for fashion, beauty, home and lifestyle news and trends at macys.com/mblog.
Each day of the week is dedicated to a specific topic, and embedded e-commerce enables readers to purchase featured merchandise directly from macys.com.
In addition to updates from Macy’s experts, the site integrates exciting content into the fashion, beauty and weekend categories, through partnerships with established experts from Fashionista.com and FoodRepublic.com. These partners will provide how-to videos, trend-spotting, user and expert reviews, original blog posts and more.