Report: Millennial shoppers hard hit by economic downturn
New York — Millennial shoppers (consumers ages 18-34) now represent the highest percentage of Americans who do not have enough money to cover their basic needs according to WSL/Strategic Retail, a leading authority on shopper behavior and retail trends. The finding, which noted that nearly 25% of this young adult market say they are not able to make ends meet – as compared with 17% of adults ages 35-54, and only 13% of those age 55 and over – was revealed as part of the company’s How America Shops MegaTrends report, Moving On 2012.
“The young adult market has always been known for being the most fashion forward, first to respond to trends and first to adopt to new retail channels,” said Candace Corlett, president of WSL/Strategic Retail. “But they’re also the group that’s been hit hardest by the economic recession, which has left them struggling to find jobs and pay down student loan debt.”
Wendy Liebmann, CEO of the company continued: “This decline in millennial spending power presents a significant challenge to brands and retailers who have long considered young adults to be the ‘golden ticket’ to sales growth. Businesses must begin rethinking their strategy to lure these shoppers to buy. At the same time, they must reevaluate the power of this generation to support new brands and stores.”
The How America Shops MegaTrends report, Moving On 2012, found that 80% of millennials believe it’s important to get the lowest price on most things, and 60% are likely to choose a lower priced brand over their usual, if they can save money. It also found that 57% of the demographic make a point to search online for discounts before shopping, and 63% are now sticking to only those brands and stores they know they can afford.
The findings gain significance when compared with results of the 2010 MegaTrends study, showing a full 10% increase in those who now make getting the lowest price a priority – even over long-held brand loyalty.
Ingles Markets sees growth in Q2, first half of fiscal 2012
ASHEVILLE, N.C. — Net sales for Ingles Markets experienced a spike during the second quarter and first half of fiscal year 2012, the retailer reported Monday.
For the second quarter ended March 24, Ingles Markets said net sales rose $11.3 million to $881.7 million, compared with the year-ago period, while net income dropped from $7.7 million in second quarter 2011 to $6.5 million in second quarter 2012. Excluding gasoline sales, comparable-store sales at Ingles Markets during the quarter decreased 0.1%, compared with the second quarter of the prior fiscal year.
For the first six months of fiscal 2012, net sales rose $56.8 million to $1.8 billion and net income increased 11.3% to $17.1 million, compared with the first six months of fiscal 2011. Excluding gasoline sales, where retail prices were significantly higher than the first half of fiscal year 2011, grocery segment comparable store sales increased 1.6%.
Commenting on the results, Ingles Markets CEO Robert Ingle II said the company remains "committed to providing value" to its customers and will continue to invest in improvements. He also said the company is slated to open a new distribution center next quarter, which will provide the chain with long-term benefits.
"We are pleased with our sales growth in the second quarter especially since last year’s second quarter included a lot of inclement weather that resulted in higher sales for the prior year," Ingle said. "Our grocery margins were stable compared with last year; however, our profitability was affected by lower gasoline margins compared with last year."
Microsoft investment bolsters B&N digital, college units
NEW YORK and REDMOND, Wash. — Barnes & Noble has formed a partnership with Microsoft that will put Barnes & Noble’s college and digital business under a new subsidiary, referred to for now as Newco. According to a press release, Microsoft will make a $300 million investment in Newco at a post-money valuation of $1.7 billion in exchange for an approximately 17.6% equity stake. Barnes & Noble will own approximately 82.4% of the new subsidiary, which will have an ongoing relationship with the company’s retail stores. Barnes & Noble has not yet decided on the name of Newco.
Among the benefits of the partnership are a new Nook application for Windows 8 and study software for students and educators, the companies said.
“The formation of Newco and our relationship with Microsoft are important parts of our strategy to capitalize on the rapid growth of the Nook business, and to solidify our position as a leader in the exploding market for digital content in the consumer and education segments,” said William Lynch, CEO of Barnes & Noble. “Microsoft’s investment in Newco, and our exciting collaboration to bring world-class digital reading technologies and content to the Windows platform and its hundreds of millions of users, will allow us to significantly expand the business.”
Barnes & Noble and Microsoft have settled their patent litigation, and moving forward, Barnes & Noble and Newco will have a royalty-bearing license under Microsoft’s patents for its Nook eReader and Tablet products.