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FINANCE

Retailers turn in mixed performance in March

BY Marianne Wilson

A slump in consumer prices helped to keep retail sales in check in March.

Retail sales in March inched up 0.3% over February, according to the National Retail Federation. (The NRF numbers exclude automobiles, gasoline stations and restaurants.)

“Various factors were at play in the first quarter, but we are again seeing a pattern similar to previous years — consumer spending was weak but is expected to pick up as we move through the year,” said NRF chief economist Jack Kleinhenz.

Citing the most recent Consumer Price Index numbers that showed prices reversing course in March, Kleinhenz said a lack of pricing power continues to plague the retail industry.

“There is no doubt that weak pricing power led to the bumpy period for retailers in the first part of this year,” he said.

On a three-month moving average, retail sales have grown 2.8% year-over-year. When looking at business lines, performance in March was again uneven. Clothing and accessories and general merchandise saw slight gains, while there were declines in building materials and supplies and sporting goods, likely due to winter weather. But even the sectors with declines showed increases year-over-year, the NRF pointed out.

A few specifics include:

• Online and other non-store sales increased 0.6% over February and increased 11.4% unadjusted year-over-year.

• Sales at clothing and accessories stores increased 1% seasonally adjusted from February but decreased 2.5% unadjusted year-over-year.

• Sales at general merchandise stores increased 0.3% seasonally adjusted over February and remained even year-over-year.

• Electronics and appliances stores’ sales increased 2.6% seasonally adjusted over February but decreased 0.4% unadjusted year-over-year.

• Furniture and home furnishings stores’ sales decreased 0.3% from February but increased 3.3% unadjusted year-over-year.

• Sales at building materials and supplies stores decreased 1.5% seasonally adjusted from February but increased 6.3% unadjusted year-over-year.

• Sporting goods stores’ sales decreased 0.8% seasonally adjusted from February and decreased 4.7% unadjusted year-over-year.

Sales at health and personal care stores increased 0.1% seasonally adjusted over February and increased 5.3% unadjusted year-over-year.

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DESIGN/CONSTRUCTION

Iconic restaurant/retail brand opens first store on West Coast

BY Marianne Wilson

Nearly 50 years after it opened its first location, Cracker Barrel Old Country Store has landed on the West Coast.

The chain, which combines a family-friendly restaurant with an old-fashioned country store, has opened Tualatin, Oregon. The location marks a key expansion of the company’s footprint.

“With the opening of our first store in the Portland area, Cracker Barrel is bringing its mission of 'pleasing people' to the West Coast,” said Nick Flanagan, senior VP, restaurant & retail operations at Cracker Barrel.

Each Cracker Barrel store is uniquely decorated with Americana artifacts, memorabilia and signage. The new Tualatin location celebrates the history and culture of the local area through decorative walls that pay homage to the famous Oregon Trail, the region's contributions to agriculture and music, Portland's status as a research hub and to the much-loved pastimes of bicycling and skiing.

Cracker Barrel currently operates 643 restaurants and stores.

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Insights

Judicial Branch Key to Issues Impacting Retail

BY CSA STAFF

In “Democracy in America,” political theorist Alexis de Tocqueville wrote, “there is hardly a political question in the United States which does not sooner or later turn into a judicial one.” Nearly 200 years later, this statement rings true — maybe now, more than ever.

The political landscape in 2017 remains uncertain but one aspect is clear: a fully functioning judiciary is vital to the health of our democracy. While all eyes may be on the executive and legislative branches of government — specifically during the first 100 days — our judicial branch holds the key to many decisions that impact virtually every economic sector. Retail especially.

As the nation’s second largest private sector employer, the retail industry supports a workforce of over 42 million Americans in thousands of locations nationwide. The breadth of the industry is wide and so are the areas we touch. From commerce and trade to labor and innovation, retail plays a vital role in growing our nation’s economy.

As president of the Retail Litigation Center (RLC), I believe in the importance of educating the courts about the retail ecosystem. The RLC has filed briefs in its name alone, led retail and business coalition briefs, and lent the retail industry’s voice to the amicus briefs of other significant organizations. Collectively, these efforts now total 100 briefs filed.

In its 100th brief, the RLC supported Macy’s petition for certiorari to the U.S. Supreme Court in Macy’s v. NLRB. At issue is whether the National Labor Relations Board (NLRB) properly certified a unit of cosmetics employees in a single store as an appropriate bargaining unit after a majority of the same store’s employees voted against the union’s bid to organize the whole store. In an effort to educate the Court, we explained the importance of the longstanding presumption that the “whole store” is the appropriate bargaining unit in the retail context, as well as the harm that will be caused to retail employees, customers and retail companies if the NLRB’s ruling is allowed to stand.

This is just one of the many examples of how court decisions impact the retail industry at large. As we focus on advocating for retail moving forward, it’s important to look back on some of the more pressing cases facing America’s retailers:

Kirtsaeng v. Wiley & Sons (U.S. Supreme Court). The RLC led amicus briefs both in support of certiorari and on the merits in this case that considered whether the “first sale doctrine” should apply to goods first sold overseas and then imported into the United States. Failure to hold that the doctrine applied could have subjected retailers to significant litigation for copyright infringement for the $2.3 trillion of goods that retailers import. The Court cited the RLC’s brief in support of its decision.

DMA v. Brohl (10th Circuit). The brief explained the significant disadvantages that “brick and mortar” retailers face under the U.S. Supreme Court’s outdated Quill (1992) and Bellas Hess (1967) precedents that today give large online retailers a significant tax advantage over their local retail counterparts. Supreme Court Nominee Judge Gorsuch wrote a concurring opinion in the 10th Circuit’s favorable decision in which he recognized the commercial advantage Quill and Bellas Hess give to online retailers but also noted that these particular precedents seemed designed to “wash away with the tides of time.”

Expressions v. Schneiderman (US Supreme Court). In a case challenging the validity of a state law that prohibits merchants from surcharging products for credit card fees, the RLC — joined by three trade associations — filed an amicus brief urging the Court to recognize that, regardless of the validity of the specific statute, merchant communication to consumers about credit card fees is “speech” subject to higher constitutional protection.

Although the Court did not reach the statute itself, Chief Justice Roberts, writing for a unanimous Court stated, “In regulating the communication of prices rather than prices themselves, [the statute] regulates speech.” The decision, thus, sets a high bar for government restrictions on merchant communication to consumers about credit card fees and surcharging.

With a new year comes new legal challenges and opportunities. Retailers deserve representation across all three branches of government – legislative, executive and judicial. Our industry should continue to focus on educating the courts to help them understand the retail community and the issues of greatest importance to it.


Deborah White is the president of the Retail Litigation Center and general counsel of the Retail Industry Leaders Association.

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