Retail Outlook: Cautiously Optimistic
Smarter. Leaner. Cautiously optimistic. That’s the picture of the retail industry that emerges from CIT Group’s second annual retail study.
Overall, the report describes an industry transformed by the recession. It makes clear that while retailers believe things are getting better, they are sticking with the strategies that saw them through the past 22 months: Cash is being conserved, inventories are being closely watched, staff levels are lean, and expansion plans are being carefully examined.
But as much as retailers remain conservative in their approach, they also are feeling more optimistic. Sixty percent of retailers say that, over the last 12 months, their revenues have grown (55%) or grown significantly (5%), and two-thirds expect revenues to be higher still in the coming 12 months. Looking ahead to the next 12 months, 68% of retailers expect revenues to either grow (46%) or grow significantly (22%). (The baseline for this growth is 2008-to-2009 sales.)
In other positive signs, fewer retailers are scaling back expansion plans. In 2009, 42% said they would not open the number of stores originally planned. In 2010, that figure dropped significantly to 16%. And nearly 60% of retailers say their current inventory is higher than it was a year ago. But they remain watchful of shifts in consumer demand. Not surprisingly, inventory management has emerged as a top priority as retailers look to track demand and stock more closely, and reduce prices to speed inventory turns.
As for capital expenditure spending, expect the focus to remain on technology, according to the study, as retailers invest in systems and solutions to help them gain control over both their customer-facing and back-end operations. For the next 12 months, expanding Internet channels, maintaining existing stores and funding point-of-sale initiatives ranked as the three top capital spending priorities.
“The general consensus is that, having weathered the economic downturn, most retailers are in better shape today than in 2009,” said Burt Feinberg, managing director and industry group head of retail finance, CIT Group Inc., New York, a leading provider of financing to small businesses and middle-market companies.
That’s a sentiment that retailers share. According to the report, retailers believe that the lessons learned during the recession have positioned their companies for strong and sustained growth once the economy turns.
It’s a proven fact that having the right technology in place can give a chain a competitive advantage. To help retailers stay on top of cutting-edge advancements, Chain Store Age has launched a virtual resource center and learning portal called Retail U.
Sponsored by Microsoft, Retail U is designed to give IT and operations executives—along with their counterparts in such key areas as merchandising, promotions management, supply chain, payment systems, finance, loss prevention, workforce management and real estate—access to the newest and most progressive ideas for revolutionizing retail business processes. And the best part: It’s all just a click away.
Retail U is dynamic and filled with content, including white papers, webinars, Q&As, videos, case studies, special reports, presentations and new product information. So remember: Retail U is now in session—check it out at retail-u.com .
Kmart launches Smart Sense
HOFFMAN ESTATES, Ill. – Kmart announced the expansion of its brand portfolio with the introduction of the Smart Sense line, its new Kmart brand that includes a wide range of items including everything from snacks and beverages, to oral care, paper products, household cleaners and over-the-counter medications. The quality of the Smart Sense line is comparable to that of national name brands, and on average costs 20% less, according to the company.
"With the introduction of the Smart Sense line, Kmart is looking to offer a more affordable Kmart brand product assortment that will rival the quality of more nationally recognized brands," said Mark Snyder, chief marketing officer, Kmart. "While the Smart Sense line will offer the everyday essentials, Kmart is also taking it a step further by providing unique products that you wouldn’t typically expect to see under a store brand."
The Smart Sense line currently consists of hundreds of products available in Kmart stores and the product line will expand to more than 1,200 items by early 2011, the company reported. Kmart said it will also support the Smart Sense line launch through multiple communications channels, including advertising, coupon offers, merchandising displays, sampling, digital marketing and event marketing.
In addition to the introduction of the Smart Sense line, a new look has been created for many other Kmart brand products, the company reported. The brighter and more vibrant packaging has been designed to capture the "colorful thinking" Kmart is demonstrating through its new product and brand announcements. In addition to the Smart Sense line roll-out, Kmart is also introducing products in a re-launch of its other exclusive brands, which include, Little Ones baby care products, Champion Breed pet care products, Image Essentials personal care products and VitaSmart vitamin products.
Target to open ten stores on 10/10/10
MINNEAPOLIS Target announced that it will open 10 stores across the country, resulting in the creation of more than 2,400 jobs.
The stores will open in the following communities:
* Sacramento East: 6507 4th Ave., Sacramento, Calif. * Simi Valley West: 51 Tierra Rejada Rd., Simi Valley, Calif. * Bakersfield Central: 2901 Ming Ave., Bakersfield, Calif. * San Jose North: 95 Holger Way, San Jose, Calif. * Azusa: 809 Azusa Ave., Azusa, Calif. * Salt Lake City: 1110 S. 300 West, Salt Lake City, Utah * Little Rock University: 420 S. University Ave., Little Rock, Ark. * Christiana: 800 Christiana Mall, Christiana, Del. * Flushing: 4024 College Point Blvd., Flushing, N.Y. * Braintree: 250 Granite St., Braintree, Mass.
“These new Target store openings will help support local economies and make life easier for our guests by creating new jobs, spurring development and providing the utmost in convenience and value,” said John Griffith, EVP property development for Target. “We are looking forward to deepening our relationship with guests in communities across the country.”
As part of the grand opening celebrations, Target said each store will contribute to its community by initiating a local grant program, contributing to the United Way, donating food to Feeding America and product to the local Goodwill chapter and encouraging team members to volunteer their time to serve their community.