Report: Department Stores Not Meeting Consumer Needs
San Francisco Consumers continued a six-year trend of steering away from department stores during the holiday season, but the struggling economy was not entirely responsible, according to the Ninth Annual National Shopping Behavior Study.
The study found that some department stores are not meeting consumer needs, including having desired items in stock, fair everyday pricing, easy return policies and helpful employees.
Consumers answered questions that showed how the current economic environment affected what motivated them to shop, where they shopped and what mattered to them most when making a purchase.
While the conventional wisdom is that consumers had less to spend this holiday season, the report said that department stores’ way of doing business also has less appeal to consumers.
“It appears that it is not the department store business model that’s broken, it’s the current execution,” said John Rittenhouse, chairman of Cavallino Capital, sponsor of the study. “The issues are directly related to management not following customers’ ‘rules.’ Shopping at stores that carry overpriced branded merchandise, use hi-lo pricing, coupons and loyalty programs have limited appeal, according to consumers interviewed in the study.”
When analyzing where consumers’ spent the most money during the past six holiday shopping seasons, department stores’ share declined from 11% to 6%.
The appeal to core affluent customers is also on the decline. These customers are moving their shopping to catalogs and the Internet to find the selection they want.
The study also found that nearly 20% of consumers spent more than a year ago, while 54% reported spending less
Meanwhile, for the first time in the nine-year history of the study, the primary driver was price over selection as the reason for why customers changed the store where they purchased.
Jeffries to continue on as A&F ceo
NEW ALBANY Abercrombie & Fitch announced that it had entered into a new employment agreement with Michael Jeffries, the company’s chairman and chief executive officer.
Jeffries’ prior employment agreement was scheduled to expire on Dec. 31. The new employment agreement, which is being filed with the Securities and Exchange Commission today as an exhibit to a Form 8-K, is scheduled to expire on Feb. 1, 2014.
CVS confirms FY earnings guidance
WOONSOCKET, R.I. CVS Caremark has issued a confirmation of its 2008 earnings guidance range, previously given during the company’s third quarter conference call on Oct. 30.
CVS Caremark expects diluted, adjusted earnings per share of $2.42 to $2.47 for FY 2008, including the impact of the Longs Drugs transaction.
“There is no question that the economy continues to be difficult and consumers are reacting with increasing caution,” said Tom Ryan, chairman, president and ceo of CVS Caremark. “Our total same-store sales for October grew 4.3%, and in November were up 6.1%. It appears that December’s comps will be well short of those levels. Nevertheless, through careful margin and cost management, we expect to be able to deliver results within our previously announced earnings range for 2008.”