“Super Saturday” Spending Breaks Record
By Craig Johnson, Customer Growth Partners
Despite being only the penultimate Saturday before Christmas, 2011’s “Super Saturday” Dec. 17 broke the all-time record for holiday spending, with an estimated $26 billion in total retail sales, according to retail consultancy Customer Growth Partners. The total was just shy of the record $27 billion spent on Black Friday.
This year’s Super Saturday spending broke the old record of $25 billion, set in 2007, when the last Saturday was an ideal three days before Christmas. [CGP based its estimate on its in-store field research of the nation’s 35 leading retailers. The company conducts this research in 40 major mall and off-mall venues nationally during the Black Friday weekend and continuing through the peak Holiday season.]
CGP’s analysis of holiday spending has found that consumer spending per capita has finally topped pre-recession 2007 demand levels. Based on government November retail data, and its proprietary retailer database, CGP found that average spending per adult will total $2,330 for the November-December holiday period, up from $2,212 in 2010 and topping the record $2,223 set in 2007.
Despite the Recession’s rigors, American consumers are far more resilient than the experts, and since 2009 they’ve deleveraged sharply, rebalancing their household finances—if they’re among the 91% with jobs. After completing this ‘Great Reset’ in their saving and spending patterns, consumers have resumed the historic 4% to 5% spending growth we saw earlier in the 2000’s.
But unlike the mid-2000’s, consumers are spending without cranking up their credit cards or tapping housing bubble-inflated home equity. Instead, they are spending smartly, and out of current cash flow—a much healthier foundation for sound, sustained growth.
Based on analysis of Dept of Labor data, CGP estimates 2011 Holiday spending per adult, for roughly the top, middle and lower third of households by income as follows:
> $70K Household Income: $3134/adult
$30-70K HHI: $1992
< $30K HHI: $1698.
Unlike retail’s high-growth years of the past decade, holiday spending this year has not been led by the consumer electronics and home improvement sectors, still mired in their own secular slumps. Instead, 2011’s retail rebound is being led by traditional “old” retail—including department stores, toys, and apparel—including the first real return of excitement and newness in fashion since before the recession.
Over the past couple years we have seen one of the great turnarounds in memory in the department store sector—led by two of the grand old names in the sector, Macy’s and Nordstrom, each founded over a century ago. Both have reinvented themselves since the recession, and have made themselves relevant to a new generation of shoppers—and they are each hitting the ball out of the park.
For the holiday season as a whole, CGP preseason forecast of +6.5% growth from 2010 remains on track, about double the consensus forecast of 2.5-3.0%. Although it is notable that other forecasters are belatedly raising their estimates, for example, the National Retail Federation from 2.8% to 3.8%. CGP is believed to have the most accurate Holiday sales forecasting record of any of the ten major retail forecasting organizations.
November retail sales (excluding auto/gasoline/restaurants), which represents about 45% of total Holiday sales, was up 5.7% year-over –year, consistent with CGP’s full season forecast, and reflecting the deferral of cold-weather apparel sales into December due to the warm November. The forecast 6.5% growth represents the strongest year-over-year holiday growth since 2004, and will yield $554B in total Retail sales, topping the total sales record of $521B of 2010.
The real surprise this year may be the day after Christmas. England calls it ‘Boxing Day’, but it will be a boffo day for American retailers, since the 26th is a Monday, with most offices closed for the three day weekend. Shoppers will still be looking for ‘self-gifting’ bargains, but armed with gift cards, consumers are much more likely to pay full price for the new merchandise that smart retailers will put on the floor for the post-Christmas crowds.
Last year, the middle Atlantic and Northeast was hit by a huge post-Christmas snowstorm, wiping out December 26 sales for over 15% of the country, and holding total sales that day to barely $20B nationally.
This year, we think a lot of stores may stay open until Midnight with extended hours, December 26th, may even top Black Friday, with $29 billion in gross sales—although returns for cash will need to be netted against the total. But after the kinds of crowds we’re seeing at the malls, with parking lots often at 110% of capacity, the key post-Christmas week is a true ‘second season’ that will propel the full holiday shopping season to a new all-time record.
Craig Johnson is president of Customer Growth Partners in New Canaan, Conn., a consulting and research firm serving the retail and other consumer industries. Founded in 2001, CGP has conducted both proprietary and public forecasts of holiday retail sales annually since then.
I live in charlotte and I just don't see the people out in the mall's, wally's and target. I know lots of people going into their 2nd and 3rd year of no work and are not trying because they can't find a job that will pay equal to what unemployment pays, their comment Is I will ride this horse until it dies!
Grocer on a Green Mission
Sustainability and energy conservation are built into the DNA of Market of Choice, a regional natural and organic grocery store operator based in Eugene, Ore. The family-owned chain employs energy-saving air curtains, sells power generated from its own 130.0 kW solar photovoltaic rooftop system and composts its own food wastes. And it is in the middle of an energy-saving lighting retrofit. Here are the details on the major elements of the company’s energy-saving efforts:
AIR CURTAINS: To date, air curtains have been installed in seven of Market of Choice’s eight locations. Most stores use a stainless steel Zephyr or MaxAir air curtain (from Berner International, New Castle, Pa.) that matches the modern look of the automatic door entrances on the interior. The curtains, which are installed on the front end and shipping doors, were originally used to keep customers and employees at the checkout protected from drafts. But they also have resulted in significant energy savings for the stores.
The curtains are activated by a limit switch triggered when the door opens and deactivated on a five-second delay setting via Berner’s digital, programmable Intelliswitch controller.
Here’s how it works: Air curtain technology draws interior air from the facility and discharges it through field-adjustable (+/-20 degree) linear nozzles that “seal” the doorway with a non-turbulent air stream that meets the floor approximately at the threshold of the door opening. A properly sized and AMCA-certified (Air Movement and Control Association) air curtain can contain approximately 70% to 80% of that air and return it to the space. Because the air curtain discharges air at velocities generally in the range from 1,000 to 3,000 ft/min., it effectively prevents outside air from entering the space (and also flying insects).
The curtains are critical to Market of Choice stores because their front entrances are cost-effectively designed with automatic sliding doors versus vestibules. The payback for air curtains ranges from one to two years and depends heavily on periodic checks for proper airflow performance. Store managers at Market of Choice are trained by the installing electrical contractor, Revolution Electric, Eugene, Ore., to clean reusable filters and adjust the air curtain’s 10-speed fan to suit patrons and weather conditions.
LIGHTING: The grocery store operator is moving from traditional fluorescent lamps to LED lighting in its reach-in coolers/freezers. The LEDs use approximately 18 to 20 watts of energy as compared with a traditional fluorescent that consumes 44 watts, emit less heat for the refrigeration system to dissipate, are brighter and have a five times longer life cycle than the fluorescents. After a test installation, the chain is installing them in other locations.
“They’re saving energy, they’re brighter and they perform well,” said Market of Choice sustainability coordinator Scott Cook. “We believe we can cut our freezer-light energy use by 60% with this program.”
In addition, the extensive produce sections in the stores will be outfitted with LED drop-in bulbs in HID 42-watt fixtures. For the change-out, Revolution Electric is experimenting with 18-watt wide beam spread LEDs (from Osram Sylvania, Danvers, Mass.) and also with 14-watt LEDs (from Cree, Durham, N.C.), which have an 87 color rendering index (CRI).
SOLAR: Market of Choice deploys 562 rooftop-mounted, 175-watt photovoltaic solar modules (from SolarWorld, Hillsboro, Ore.) to generate electricity. A PV power inverter connects the 130.0 kW DC system to the electric grid. The retailer sells the power to Oregon’s largest customer-owned utility, Eugene Water & Electric Board (EWEB), which pays .12/kWh on the 10-year contract. The chain’s corporate offices use solar lighting generated from solar tracking skylights. A monitor/control system adds lumens of artificial light when solar lighting isn’t sufficient near dusk, dawn or on overcast days.
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Finish Line Q3 beats estimates
New York — Finish Line Inc.’s third-quarter earnings rose 35% amid rising digital sales and higher demand for running and basketball gear. The chain has reported nine consecutive quarters of same-store sales growth, including a 7.7% jump in the latest period.
For the quarter ended Nov. 26, the company posted a profit of $5.5 million, up from $4.1 million a year earlier. Revenue increased 8.1% to $282 million. Digital sales jumped 61%, following similar increases in the first two quarters of the year.
“Our nearly 8% comp increase and EPS gain of more than 37% in the third quarter was another strong performance for our company,” said chairman and CEO Glenn Lyon. “It is the interplay of social media and technologies, such as mobile along with digital and bricks-and-mortar channels that is the sweet spot for Finish Line. Our strategic plan has led us to develop a strong presence on all of these fronts while working to keep our brand relevant everywhere.”
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