FINANCE

NRF: Holiday sales forecast to rise 2.8% to $465.6 billion

BY Staff Writer

Washington, D.C. — A report released Thursday by the National Retail Federation predicted an average holiday shopping season. According to the NRF forecast, holiday retail sales for 2011 are expected to increase 2.8% to $465.6 billion. While that growth is far lower than the 5.2% increase retailers experienced last year, it is slightly higher than the 10-year average holiday sales increase of 2.6%, according to NRF.

“Retailers are optimistic that a combination of strong promotions and lean inventory levels will help them address consumer caution this holiday season,” said Matthew Shay, president and CEO, NRF. “While businesses remain concerned over the viability of the economic recovery, there is no doubt that the retail industry is in a better position this year to handle consumer uncertainty than it was in 2008 and 2009.”

Though several economic indicators paint a solid picture for the holiday season – including 14 consecutive months of retail sales growth and a substantial reduction in household debt – continued consumer uncertainty over the stock market, higher gas and food prices, fiscal policy and sputtering job growth will impact spending this holiday season, said NRF.

Additionally, the substantial year-over-year gains for the 2010 holiday season will create more difficult comparisons for retailers to achieve this year.

“Just when you think the U.S. economy is turning around, another factor comes into play that changes the game,” said NRF chief economist Jack Kleinhenz, Ph.D. “Persistently high unemployment, an erratic stock market, modest income growth and rising consumer prices are all combining to impact spending this holiday season. How Americans will react to shaky economic data is the question, but the good news for retailers is that shoppers have not yet thrown in the towel.”

In related holiday news, NRF has projected that retailers will hire between 480,000 and 500,000 seasonal workers this season. The association used its holiday forecasting model to create the hiring projection. The resultant numbers are comparable to the 495,000 seasonal employees retailers hired last year.

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OPERATIONS

IHL: Tablets and smartphones transforming retail experience

BY Marianne Wilson

Franklin, Tenn. — Tablets and smartphones are redefining the retail shopping experience and will be a $5 billion market per year by 2015, according to a new research report by IHL Group.

The study, Mobility: A Gutenberg Moment for Retail, A Threat to POS, found that the release of the Apple iPad and Amazon Kindle Fire have created price points and form factors for mobile devices that are finally allowing retailers to arm their associates with tools that will transform the in-store experience.

“The advent of mobile devices is a Gutenberg moment that is revolutionizing many aspects of the shopping experience," said Greg Buzek, president, IHL Group. "A complete transformation of the customer experience will occur at clothing and department stores over the next three years. Store personnel will be able to greet shoppers with their device, access purchase history, help customers accessorize, and even walk around as a personal shopper and check out the consumer — all from the same device.”

Another area where consumers will see more tablets is in table-service restaurants, according to the report. Customers will be able to place their own orders on devices at the table as well as access games and other entertainment, and servers can use these devices as well instead of fixed POS terminals. This will lead to more efficient turnover; restaurants that have deployed mobile devices have seen a 25% increase in the number of times they can turn the table, thus serving more customers every shift.

Key findings from IHL’s report include:

  • Handhelds will have a dramatic impact on traditional POS shipments over time, reducing the growth of POS shipments by 11% in 2015 and in some segments as much as 20 percent from previously forecasted volumes. By 2015, annual shipments of mobile devices will be four times that of traditional POS terminals.
  • By 2015, over 2.7 million tablets a year will be shipped for use in North American retail and hospitality, an increase of 450 percent. Specialty retailers will deploy nearly half of all tablets shipped to retail.
  • Lower-priced consumer devices will NOT displace sales of rugged handhelds. Instead, this market will rise close to 30% over the next four years through more competitive offerings.
  • Non-rugged handhelds (mobile phones) will experience heavy growth over the next two years as well, with restaurants deploying nearly half of all such devices shipped to retail. These devices will experience heavy churn rates in the 2012–2015 timeframe, so the installed base will not grow as much as might otherwise be expected.

“The desire for the ‘Apple Store experience’ among retailers is being driven at the CEO level on down, and its momentum is undeniable,” Buzek said. “For years, retailers have been looking for technology to both provide associates with more data on the products they are offering, and recognize and reward customers as they come through that door. Mobile devices are making this possible.”

IHL’s new study includes forecasts for rugged handhelds, consumer smartphones and tablet computers to be used at the store level from now until 2015 in North America. It is available immediately at ihlservices.com.

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FINANCE

Macy’s, Kohl’s report strong September showings, J.C. Penney flounders

BY Katherine Boccaccio

New York City — Macy’s saw same-store sales rise 4.9% in September, beating Wall Street’s expected 4.4% increase, and total sales surged 5.3% to $2.298 billion in the five-week period.

“We continued to see a strong sales trend in September at both Macy’s and Bloomingdale’s,” said Terry J. Lundgren, chairman, president and CEO of Macy’s. “Our sales performed well both in stores and online. This underscores that our business remains on track, despite the persistently negative macroeconomic news.”

Lundgren said the chain is confident it will continue to gain market share as it heads toward the holiday selling season. The chain said its third-quarter outlook is expected to be on the high-end of previous projections for a 4% to 4.5% increase.

J.C. Penney, however, turned in a much weaker performance, reporting a 0.6% dip in same-store sales, compared to a 5.1% increase last year. A 0.6% gain was expected in September and the retailer said it now expects flat same-store sales for the quarter rather than the previously projected 2% to 3% gain. Total sales decreased 3.6% in September.

Kohl’s Corp. handily beat projections, reporting a same-store sales increase of 4.1%. A 2.2% increase was expected. The department store retailer received a boost from its Jennifer Lopez and Marc Anthony line introductions in September, which “generated excited,” said CEO Kevin Mansell.

Nordstrom also shone in September, posting a 10.7% same-store sales rise that beat expectations of a 5.2% increase. The luxury retailer was boosted by strong showings in dresses, handbags and designer merchandise.

Saks, too, represented the luxury category well, recording a 9.3% rise when 6.5% was projected.

In other department store same-store sales news:

  • Dillard’s same-store sales rose 4%.
  • Bon-Ton decreased 3.6%.
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