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NRF forecast: 2011 retail sales to rise 4%

BY CSA STAFF

New York City — The National Retail Federation said Thursday that it expects retail sales growth of 4% this year, the biggest increase since 2006.

However, the group warned that shoppers are likely to remain cautious as they cope with slow job growth and rising prices.

The NRF said it expects retail sales to reach $2.47 trillion in 2011, up from $2.37 trillion in 2010, excluding automobiles, fuel and restaurants.

That increase would be higher than the past decade’s average annual growth rate of 3.1% and 2010’s increase of 3.7%. Retail sales rose 4.7% in 2006, which is still under the 5% rate that indicates a robust economy.

"Consumers will continue to be thoughtful about what they’re spending, but they’re certainly feeling better," said Jack Kleinhenz, NRF’s chief economist.

NRF’s forecast is not adjusted for inflation, and the figures include online sales from physical stores but not from such companies as Amazon.com that operate only on the web.

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Kroger EVP Don Becker dies

BY CSA STAFF

CINCINNATI — Supermarket giant Kroger announced company EVP, Don Becker, died Wednesday after suffering an aneurysm. He was 62 years old.

Becker had a 42-year career at Kroger, joining in 1969 as a clerk in the Cincinnati/Dayton division. In his most recent role as the retailer’s EVP, a position he held since 2004, Becker led the company’s merchandising and procurement for grocery, perishables, drug/general merchandise and pharmacy. He also had responsibility for advertising, consumer research and customer loyalty, manufacturing and corporate brands, customer insights and strategy, supply chain and supplier diversity. Kroger’s Cincinnati/Dayton division and the company’s retail clinic operator, The Little Clinic, reported to Becker.

During his career at Kroger, Becker also served as co-chair of Kroger’s first general office cultural council.

"We are deeply saddened to lose Don, our dear friend and extraordinary leader," said David Dillon, Kroger’s chairman and CEO. "Don leaves a legacy of enthusiasm and passion for doing what’s right for our customers and our associates. He touched the lives of countless people in our company as well as throughout our industry and community. He was a true ‘people person’ who mentored many associates at every level of our business."

Becker is survived by his wife, daughter, son-in-law and grandson.

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Opportunity emerges courtesy of Borders

BY CSA STAFF

Borders Group on Thursday won bankruptcy court approval to liquidate approximately 200 stores in a deal that may bring in $175 million to creditors. The sales will begin Feb. 19, allowing Borders to take advantage of the President’s Day holiday, typically a major shopping weekend.

Hilco Merchant Resources LLC, SB Capital Group, Tiger Capital Group LLC and Gordon Brothers Group won the bidding to handle the liquidation sales, according to Bloomberg.

The stores to be shuttered operate under the Borders, Waldenbooks, Borders Express and Borders Outlet names, according to a court filing.

Like clockwork every time a notable retailer fails, familiar questions surface about what went wrong and what the implications are for the rest of the industry. In this case, the lingering question is whether there are too many stores in the United States.

Borders failed to keep pace with change, didn’t take upstart competitors as seriously as hindsight reveals it should have, and when confronted with an abundance of alternatives consumers simply didn’t allocate enough of their dollars to Borders for the company to operate profitably. And yes, there are too many stores in the United States.

Such is the cycle of life in the retail industry where only the strong and adaptive survive. Now, Borders plans to close about 200 of its flagship stores, which average about 24,000-sq.-ft. You have to wonder if liquidation isn’t far behind given the track record of retailers who attempt to reorganize themselves through the bankruptcy process. Circuit City and Linens ‘N Things stand out as recent examples of struggling retailers who went the liquidation route.

As was the case with those companies, the demise of Borders will create new opportunities for other retailers to grow. It could be other book sellers such as Amazon.com or Barnes & Noble, or it could be other brick-and-mortar chains interested in developing new formats who want to pick up leases on some quality real estate. Borders stores tend to have attractive exteriors and decent locations, which could make them appealing for a company such as Walmart that has a long-running interest in the development of smaller format stores.

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