Valentine’s Day spending expected to rise this year
New York — Consumers expect to spend slightly more on Valentine’s Day merchandise this year than last year, according to a report by market research firm IBISWorld.
The report forecasts spending of $134.08 per person, compared with last year’s $133.99. Total revenue for the holiday is expected to grow by 3.2%, to $20.8 billion, despite incomes and consumer sentiments remaining below what they were before the recession.
"Although overall spending will increase slightly, consumers are still watching their wallets, and spending on expensive items will suffer as a consequence," IBISWorld industry analyst Lauren Setar said. "Due to these trends, Valentine’s Day purchases are expected to trend toward conventional gifts, giving candy and flowers an edge this year."
In terms of specific product categories, spending on greeting cards is expected to increase 0.4% from 2012 to $866 million; candy sales are expected to increase by 4.3% to $2.89 billion; jewelry sales will increase by 2.2% to $1.61 billion; flower sales will increase by 5.7% to $1.78 billion; dining out will increase by 2.9% to $9.95 billion; clothing and lingerie sales will increase by 1.8% to $1.26 billion.
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Sales events to make a comeback at J.C. Penney
New York — J.C. Penney is changing course on its no-sales policy. It was just one year ago that the retailer, amid much fanfare, announced it was nearly eliminating sales events from its stores in favor of a three-tier pricing strategy and everyday low pricing. But on Monday the Associated Press reported that J.C. Penney is not only bringing back sales promotions to its stores, but will also add price tags or signs for approximately half of its merchandise that will show the "manufacturer’s suggested retail price" next to J.C. Penney’s "everyday" price.
For store branded items, J.C. Penney will show comparison prices for similar merchandise from competitors. Comparison prices, however, will not be shown for merchandise that is part of the exclusive partnerships J.C. Penney has entered into with brands such as Mango.
J.C. Penney’s decision to strictly limit promotional events, one part of CEO Ron Johnson’s ambitious reinvention plan for the company, has not gone over well with consumers. The company has struggled, reporting three consecutive quarters of drops in sales and profits. Industry analysts expect more of the same for the fourth quarter. J.C. Penney will announce its results in February.
J.C. Penney is not revealing how many sales events it will offer. But the company said the number will be well below the nearly 600 that it used to offer prior to Johnson’s new strategy, according to the report.
Johnson told the Associated Press that the decision to bring back sales was an "evolution" of his strategy.
"Our sales have gone backward a little more than we expected, but that doesn’t change the vision or the strategy," said Johnson in the report. "We made changes and we learned an incredible amount. That is what’s informing our tactics as we go forward."
To promote the price comparison strategy, J.C. Penney will air TV, print and digital ads, the report said.
Johnson is not a strategist
All it would have taken was for him to examine the traditions and habits of shoppers to realize the EDLP is not a viable option. What he may have gained in saved marketing dollars he lost to declining revenues. JCP will now compound that blunder by destroying its pricing integrity all together. The board needs to take action, bring on a mass merchant or department store pro to take the reigns and hire some decent strategists to get them back on track. The one plus to all this was the visual updates in the stores.
JCP promotion strategy
Johnson could have done a little research and discovered other retailers' attempts at "everyday low prices" with little or no sales promotions has never worked in JCP's price points or below. Americans have become conditioned to expect "sales" on everything from apparel to cars. And expect a conflict on "MSRP" or "compare at" signs. That won't last long as they will be sued to prove the claims which can't be proven. It's hard to imagine how Johnson has kept his job this long after such a huge blunder.
Macy’s realigns exec team on CAO’s retirement
CINCINNATI — Macy’s has assigned additional responsibilities to several of its executives following the retirement of Thomas Cole, chief administrative officer, who is leaving the company in May after 41 years of service.
Cole’s responsibilities have been re-assigned as follows:
• William S. Allen has joined Macy’s, effective today, as chief human resources officer. Allen, a seasoned corporate human resources executive who previously served as senior vice president of AP Moller-Maersk A/S, joins the Macy’s executive committee and reports to Terry J. Lundgren, chairman, president and chief executive officer. Allen will oversee Macy’s human resources, diversity strategies, and corporate communications and external affairs functions. In addition, Allen will have administrative responsibility for the law function that reports directly to Lundgren.
• Robert B. Harrison, previously Macy’s executive vice president for omnichannel strategy, is assuming the newly-created role of chief omnichannel officer, reporting to Lundgren. He also will join the company’s executive committee. In addition to his existing role managing the development of strategies to closely integrate the company’s stores, online and mobile activities, Harrison will assume responsibility for systems and technology, logistics and related operating functions.
• Karen M. Hoguet, Macy’s chief financial officer, will assume additional responsibility for credit and customer services, real estate, non-merchandise purchasing and sustainability. All of the company’s finance and accounting functions report to Hoguet. In addition, she will have administrative responsibility for the internal audit function that reports directly to Lundgren. Hoguet is a member of the Macy’s executive committee and reports to Lundgren.
• Peter Sachse, Macy’s chief stores officer, will assume additional responsibility for store planning, design and construction. The company’s nationwide portfolio of Macy’s stores, as well as the region, district and central stores organization and visual merchandising, continue to report to Sachse. He is a member of the Macy’s executive committee and reports to Lundgren.
"Our company remains on a path of continuous improvement and growth, and the foundation of our success is the strength of talent at every level of our organization," Lundgren said. "These adjustments to our senior leadership team provide continuity and strengthen our ability to innovate as we work to maximize results in the years ahead from our core business strategies, including My Macy’s localization, omnichannel alignment, and customer engagement.
"Our company and I owe a great debt of gratitude for the skill and leadership of Tom Cole in guiding the company’s operations and key corporate functions through periods of unprecedented change. Tom’s influence has been particularly profound over the past seven years as we integrated the acquisition of The May Department Stores Company, migrated to the nationwide Macy’s brand, developed new business and organization structures, aggressively pursued our omnichannel vision and improved our customer shopping experience. Tom played a key role in these subjects and many, many more. While we wish Tom continued health and happiness in the next chapter of his life, I am confident in knowing that ours is a better and stronger company today because of his exceptional work over the past four decades," Lundgren said.
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