ShopperTrak: Week’s Retail Sales Fall 3.1%
Chicago ShopperTrak RCT Corp.’s National Retail Sales Estimate (NRSE) reported Tuesday that retail sales continued to slide last week as sales for the week ending Nov. 15 dropped 3.1% as compared to the same period in 2007.
On a weekly level, retail sales posted a 7.0% increase as compared to the previous week ending Nov. 8 as Veteran’s Day (Nov. 11) and early holiday-season promotions provided a much-needed boost for retailers. The solid weekly performance proves consumers are still willing to spend if promotions are perceived as good values, which could be a good sign, said ShopperTrak, heading into Black Friday weekend.
ShopperTrak also reported that to date, sales for the month of November compared to 2007 are down 3.7%.
In related news, ShopperTrak said Tuesday that the presidential election and the recent financial crisis kept shoppers at home rather than at their favorite malls—a pattern that is detrimental to retail sales heading into the critical holiday season.
“In the four weeks prior to the 2008 presidential election, shopper traffic fell by an average of 3.3% per week when compared to the same weeks in 2007,” said Bill Martin, co-founder of ShopperTrak. “In the recession year of 2002, shopper traffic fell by an average of 2.1% per week when compared to the same weeks in 2001.”
As noted in the company’s pre-election analysis, 2008 most closely resembles the election season of 2002, when the economy was in a slowdown and shopper traffic tapered off as the election approached.
“In 2002, the string of year-over-year weekly traffic losses ran virtually throughout the holiday season resulting in the lowest yearly gains in the retail sales for the period 1994 to 2007,” Martin said.
Year-over-year daily traffic has remained negative from the period Aug. 3 through Nov. 8.
“In August, stores and malls lost 5.3% of their traffic on average each day and by October this percentage fell to 9.8%, which is substantial,” Martin added.
Credit terms tightened
Target’s credit card business took a heavy toll on the company’s overall performance in the third quarter, as operating profits in the segment declined 83% to $35 million.
As is the case with other credit card issuers, Target saw delinquency and write-offs increase during the third quarter, as national economic conditions deteriorated.
“This leads to higher than expected bad debt expense both due to write-offs within the period as well as an addition to our reserve of $100 million during the quarter to accommodate anticipated write offs in future periods,” Target cfo Doug Scovanner said.
Based on current trends, Target’s expects a write-off rate for the year around 9% and that figure is expected to increase in 2009, which is why the $100 million addition to the reserve was necessary.
“We continue to tighten all aspects of portfolio underwriting, granting fewer new accounts with lower average credit lines, aggressively reducing open credit lines on many existing accounts and pursuing more proactive collection activities,” Scovanner said.
OfficeMax to bring back ElfYourself campaign
NAPERVILLE, Ill. OfficeMax has teamed up with JibJab Media to bring its popular ElfYourself.com campaign back to the Web for a third year.
OfficeMax and JibJab, best known for online political parodies such as ‘This Land’, began conversations following the 2007 holiday season when the companies scored the number one and number two positions respectively for fastest growing sites on the Web, according to comScore. Over six weeks during the 2007 holiday season, ElfYourself received more than 193 million site visits, and more Americans were visiting ElfYourself.com ( http://www.elfyourself.com/ )than Facebook.com ( http://www.facebook.com/ ), according to Web measurement firm Quantcast.
ElfYourself enables users to create free personalized holiday eCards by uploading their photos and transforming themselves, family and friends into dancing elves. OfficeMax and JibJab have jointly enhanced the ElfYourself experience by increasing the number of elves a visitor can create, from four to five, as well as offering three new dances including a disco dance, country dance and the Charleston.
This year ElfYourself will be running on JibJab’s Starring You Technology platform that not only enables users to create personalized online videos, but also get their personalized elves printed on greeting cards and holiday gifts such as ornaments, mouse pads, coffee mugs, and playing cards. For a small fee, users can also get a downloadable version of their video that they can watch offline, burn to a DVD or watch on their mobile devices.