Holiday sales to cross trillion dollar mark; brick-and-mortar stays strong
Holiday retail sales are poised to cross a major threshold this year, fueled by low unemployment, income growth, high consumer confidence and a favorable calendar.
Total retail sales in the United States will increase 5.8% to $1.002 trillion, according to eMarketer, which raised its projections from its earlier forecast. It is the first time holiday sales will cross the $1 trillion mark, with 2018 showing the strongest growth since 2011. Spending momentum will get an added boost from a favorable holiday calendar that features the maximum 32 days between Thanksgiving and Christmas.
Brick-and-mortar sales for the holiday season will jump 4.4% to $878.38 billion (higher than the $863 billion that eMarketer previously had projected). Brick-and-mortar still represents the majority (87.7%) of holiday sales, although its share has steadily declined in recent years.
“While e-commerce will continue to see strong double-digit gains, brick-and-mortar retail should be a particular bright spot this holiday season,” said Andrew Lipsman, principal analyst at eMarketer. “Retailers are luring in shoppers with remodeled stores, streamlined checkout and options to buy online, pick up in-store.”
E-commerce sales this holiday season will increase 16.6% to $123.73 billion, according to eMarketer, representing 12.3% of all holiday retail sales this year.
“For retailers, it will be a battle for e-commerce market share,” said eMarketer forecasting analyst Cindy Liu. “We should expect more promotions and perks like free and fast shipping, as retailers compete against Amazon.”
Holiday sales via tablets and smartphones is also growing, representing 43.8% of e-commerce this year, equate- to 5.4% of total holiday sales.
Sears looks to sell its home improvement business to a rival
An online rival wants to acquire the Sears Home Improvement business.
Sears Holdings Corp. announced it is seeking court approval of a “stalking horse” asset purchase agreement with Service.com to acquire the Sears Home Improvement business (SHIP) in a sale process under the U.S. Bankruptcy Code. SHIP, which is based in Longwood, Florida, is a unit of the Sears Home Services division.
Under the agreement, which is subject to higher or better offers, Service.com would purchase SHIP for approximately $60 million in cash. Service.com is an online service that helps consumers find contractors.
“The sale of SHIP is an important step for Sears Holdings as we continue working to achieve a comprehensive restructuring,” said Robert A. Riecker, CFO and member of the “office of the chief executive, which managing the company’s day-to-day operations during the bankruptcy restructuring process. “We look forward to completing this process expeditiously so that we can maximize the value of SHIP and ensure a seamless transition for all of our stakeholders.”
Sears intends to implement bid procedures to allow other qualified bidders the opportunity to submit competing bids through a court-supervised sale process. The auction process and final agreement will be subject to the approval of the court. Sears anticipates that a sale will be completed by early January 2019.
Sears filed for Chapter 11 bankruptcy proceedings on Oct. 15, 2018.
Kroger in deal to sell some former Toys ‘R’ Us brands
Kroger is the latest retailer to jump into toys for the holiday season, but it’s doing so via a partnership with the hedge fund owners of brands that were exclusive to Toys “R” Us.
The nation’s largest supermarket retailer will sell Geoffrey’s Toy Box exclusive brands in nearly 600 stores across its portfolio for the 2018 holiday season. Geoffrey’s Toy Box is a division of Geoffrey LLC, which owns and operates a portfolio of more than 20 exclusive brands that were previously exclusive to the now defunct Toys “R” Us.
Starting this month, Geoffrey’s Toy Box branded toys and displays will appear in select stores operated by Kroger, with a curated selection of 35 items, ranging in price from $19.99 to $49.99. The holiday program will feature exclusive toys from such brands as Imaginarium, Edu Science, and Just Like Home. The product assortment will vary by location.
“Geoffrey’s Toy Box delivers a unique shopping destination within Kroger stores,” said Robert Clark, Kroger’s VP president of merchandising. “We’re excited to offer Geoffrey’s Toy Box this holiday season to provide our customers with the opportunity to purchase a selection of toys once exclusive to Toys “R” Us.”
With the shuttering of Toys “R” Us, an array of retailers, ranging from J.C. Penney Co. and Target to Party City and Five Below, have expanded their toy selection as the holidays approach.