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Retail container traffic to rise 9% in April

BY CSA STAFF

Washington, D.C. — Import cargo volume at the nation’s major retail container ports is expected to be up 9% in April over the same month last year, according to the monthly Global Port Tracker report released Monday by the National Retail Federation and Hackett Associates.

“These numbers are an indication that the economy is recovering and retailers are expecting continued increases in sales through the summer and beyond,” NRF VP for supply chain and customs policy Jonathan Gold said. “There are challenges ahead from rising prices for gasoline and other essentials, but inventories are under control and retailers are optimistic.”

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March decline at Target no surprise

BY CSA STAFF

Target had forecast a mid-single decline in its March same-store sales, so the 5.5% decline it reported last week was no surprise. The late arrival of Easter is messing with retailers’ sales comparisons, so even though March was a down month for Target, it could have been worse as the comparison with the prior year was a lofty 10.3%. Therefore, last month’s 5.5% decline is a victory of sorts, and March results for retailers overall were better than expected. Now comes the tricky party as Target is on the hook to produce a mid-teems comps gain following last April’s 5.9% decrease.

“March comparable-store sales were in line with our expectations, reflecting the change in Easter timing in 2011. Our stores are well-prepared for the upcoming Easter season, and we continue to expect a mid-teens increase in Target’s April comparable-store sales,” said Target chairman, president and CEO Gregg Steinhafel.

During March, the sales store was much the same as it has been in prior months with the company reporting strength in grocery, health care, beauty and other household essentials, which increased in the low- to mid-single digits. Comps in apparel and home area decreased in the high single-digit range while hardline comps decreased in the low double-digit range.

However, with Easter falling on April 24 this year, versus April 4 last year, March sales in categories related to the holiday were understandably impacted as shoppers tend to delay purchases closer to their time of need. For example, Target said the Easter impact was particularly meaningful for candy within the grocery area, across multiple categories in apparel, toys and music, movies and books and seasonal categories in home.

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Loyalty on the line as Walmart ads tempt Target shoppers

BY CSA STAFF

A whole lot of uncertainty now hangs over Target’s April same-store sales expectations, as Walmart this week began a major advertising offensive to regain customers and restore sales at its U.S. division.

Target forecast April comps would be in the mid-teens due largely to the late arrival of Easter on April 24, coupled with ongoing food and consumable gains related to expansion of the PFresh format to more stores and increasing penetration rates for the REDcard rewards program. Suddenly though, Target’s April expectations appear to be in jeopardy as Walmart is poised to inundate the marketplace with messaging around low prices, breadth of assortment and a hassle-free price match policy with the bulk of spending related to Easter yet to occur. The campaign, which began airing yesterday, follows several months where nary a peep was heard out of Bentonville as Walmart was focused on restoring product assortments, adjusting prices and tweaking store operations so its ads would ring true with the shopper experience.

Target had to know this day was coming and that Walmart wouldn’t keep shooting itself in the foot by pursuing a flawed merchandising strategy that alienated shoppers and resulted in seven consecutive quarters of negative same-store sales. The big unknown is how many of those shoppers disaffected by Walmart’s actions migrated to other retailers such as Target and are now susceptible to return to Walmart.

It would be reasonable to assume that some percentage of existing Target shoppers will find Wamart’s new campaign alluring enough that they will bypass Target on their next shopping trip. That’s just the reality of retail where fickle consumers are notorious for giving company’s second, third and fourth chances.

To follow this logic further, it is conceivable that a percentage of those customers who left Walmart only to be lured back by a slick television commercials in the months ahead will remember why they left in the first place. Even if that is the case, Target is still in for a challenging few months from a customer traffic standpoint Walmart re-enters some shoppers’ decision set.

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