REAL ESTATE

Report: Future bright for brick-and-mortar retail

BY Marianne Wilson

New York — The future looks bright for retail stores. That’s the conclusion of a new report by the International Council of Shopping Centers. The report, set to be released in May during ICSC’s RECon Conference, finds that population growth in the United States is now outpacing the addition of retail space by three-and-a-half times.

“As a result, shopping space per capita, which peaked in 2009 at 24.2 square feet, now stands at 23.7. This correction will make way for demand in new retail space once again,” the report said.

According to ICSC research, announced store closings in 2013 decreased 43% versus the previous year. When new Census Bureau data becomes available, it is likely that both 2012 and 2013 were net positive in terms of new retail stores.

In another positive sign, pure online retailers are looking for physical space. The report cites such examples as women’s accessories retailer JustFab, which opened its first store in 2012.

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FINANCE

Home Depot Q4 profit slips but tops estimates; raises quarterly dividend

BY Marianne Wilson

Atlanta – Home Depot Inc.’s net income in the fourth-quarter edged down 0.8%, hurt by snow and severe cold and one less week in the period than a year ago. But cost costs helped its earnings to top estimates and the chain raised its quarterly dividend by 21%.

The very cold weather should boost sales this spring, the chain’s most important sales period of the year, as people repair homes damaged this winter, Home Depot said.

Home Depot earned $1.01 billion for the three months ended Feb. 2, compared with $1.02 billion a year earlier.

Revenue decreased 3% to $17.7 million from $18.25 billion, hurt by one less week in the latest quarter and winter storms. Same-store sales for the fourth quarter rose 4.4%.

Full-year net income rose to $5.39 billion from $4.54 billion in the year-ago period. Annual revenue was up 5% to $78.81 billion, from $74.75 billion.

For fiscal year 2014, Home Depot plans to open seven new stores. The retailer also expects net sales growth of 4.8% and same-store sales growth of 4.6%.

"In 2013, we posted our strongest same-store sales growth in 14 years as solid execution and the recovering housing market aided our performance," said Frank Blake, chairman & CEO.

On a conference call, Blake said the chain expects the housing recovery to continue and that “home prices will increase even though at a lower rate and expect that affordability will support the home improvement market.”

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OPERATIONS

Study: Long checkout lines impact customer return rates

BY Dan Berthiaume

Duluth, Ga. – More than 77% of Americans would be less likely to return to a store if they experienced long checkout lines. According to a new study from Omnico Group, after eight minutes, Americans are likely to abandon the checkout line and leave the store with no purchase.

Although more patient than their British counterparts, who leave after six minutes, Americans are more likely to never return to that store as a result of the negative experience than their British counterparts. And with 74% of shoppers in the study owning a smartphone, the study also looked at smartphone adoption and how mobile technology is changing shopping behavior. It found that retailers need to bridge the gap between what consumers expect and what can actually be delivered.

Other study highlights include:

• The top three technologies that will improve the average customer’s in-store experience are self-checkout, free Wi-Fi and "click and collect" (order online, pick up in-store) technology.

• Controlling for price and reward programs are the best to encourage Americans to be loyal customers. Coupons are also well received.

• Millennials, between the ages of 25-34, lead the way in mobile use, particularly when comparing prices and shopping on competitive retailers’ websites while in the store.

"Customers want technology solutions that join up the channels and transform the customer experience," said Bill Henry, CEO of Omnico Group. "Omni-channel solutions enable brick-and-mortar retailers to accelerate their growth in challenging conditions and provide new opportunities to win back customers from pure-play online shops. Retailers that embrace omni-channel technology and offer seamless customer journeys to the shopper have a very bright future.

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P.Siegel says:
Feb-26-2014 02:04 pm

Checkout Lines
WalMart, with all their stores and lomg history, doesn't realize this (and how to stay in stock).

C.Cassidy says:
Feb-26-2014 01:26 pm

Question about the questions
I am hoping you can clarify how the 77% statistic was achieved. Were shoppers asked to project whether or not they would return, or did researchers actually track their behavior for a period of time? Also, were there any questions to clarify whether "never return to that store" applied to the chain or to the particular location? Thanks in advance.

P.Siegel says:
Feb-26-2014 02:04 pm

WalMart, with all their stores and lomg history, doesn't realize this (and how to stay in stock).

C.Cassidy says:
Feb-26-2014 01:26 pm

I am hoping you can clarify how the 77% statistic was achieved. Were shoppers asked to project whether or not they would return, or did researchers actually track their behavior for a period of time? Also, were there any questions to clarify whether "never return to that store" applied to the chain or to the particular location? Thanks in advance.

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