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Keeping Our Finger On The Pulse Of The Retail Industry

Retail Sales Cool at Many Chains

Sales down 0.5%

According to a preliminary tally by UBS-International Council of Shopping Centers, sales slid 0.5% versus its original estimate of 1% growth. The results, based on same-store sales or sales at stores opened at least a year, were the weakest since March 1995, when the industry registered a decline of 0.8 percent.

Monthly same-store sales declined at many of the nation’s stores in March. The timing of Easter led many stores to shut down for the holidays and continuing worries about the economy also kept consumers from spending.

At the pump, the national average price of a gallon of gas rose 1.4 cents overnight to a record $3.357 a gallon, according to AAA and the Oil Price Information Service. Prices have set a string of records in recent weeks, and are 56 cents higher than a year ago.

“So far the majority of retailers have missed expectations and are blaming the Easter effect and macroeconomic conditions,” said Thomson Financial in a note wrapping up some of the results. “Gap posted an anemic 18% [drop in same-store-sales] while Costco registered a robust 7% comp followed by BJ’s Wholesale with 6%.”

Most chains missed Wall Street’s expectations, although discount stores held up fairly well.  The same-store sales for the world’s biggest retailer, Wal-Mart, rose 1.1% last month, including fuel sales, or 0.7% without fuel sales. Total revenue in March climbed 7.9% to $36.97 billion from $34.26 billion a year earlier. For April, U.S. comp sales, without fuel, should rise between 1% and 3%, Wal-Mart said.

Teen retailers’ same store sales “have been declining over the last couple of months, suggesting consumers are not spending discretionary income.  We expect to continue to see growth in those areas where consumers have less discretion, while retailers selling apparel and home goods, including the department stores, have been hurting,” Thomson noted.

The weak job market, higher gasoline and food costs, along with the declining housing market and credit markets not only have eaten shoppers’ budgets, ICSC said, and have also hurt their confidence in the economy and curbed their willingness to spend. Plus, the arrival of Easter in March instead of April like last year meant retailers lost one selling day.

"Discounters are going to continue to do well in this economy," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. "Anything that is discretionary is going to continue to be under pressure."

Online Sales Expected to Rise 17% in 2008

Men Favor Convenience and Service, Women Price

Almost half of all chief female shoppers — those who do more than 60% of their household’s grocery shopping — said price-related offerings such as lowest everyday prices, best advertised specials and store coupons were most important to them in deciding where to spend their grocery dollars, according to a new study from marketing research firm Vertis Communications. 

It’s a different story for men.  The study found that while price-related offerings are important to approximately 30 percent of chief male shoppers, 41 percent of male shoppers aged 18-34 value convenience, such as proximity to home and work, more than any other factor.

“Recently, we revealed through our 2008 Customer Focus Findings that 47 percent of adults feel advertising inserts best capture their attention over any other medium,” said Scott Marden, director of marketing research for Vertis Communications.  “This new set of data regarding chief female shoppers is further evidence that marketers can ensure the largest return on investment by devoting dollars to solid advertising insert campaigns targeting male and female shoppers of varying ages.”

According to the findings, 48 percent of women aged 35 — 49 who do more than 60 percent of the grocery shopping value these offerings, as do 47 percent of chief female shoppers aged 50 and older, and 46 percent of chief women shoppers aged 18 — 34.

Additionally, the study found that 22 percent of Hispanic household decision makers prefer super-sized grocery outlets over any other super discount, wholesale, or regular discount store, compared to just 15 percent of non-Hispanic decision makers.

Selection and quality ranged third behind price and convenience for almost all age groups.  Also, the best quality food overall was important to only 1 percent of total adults.

Designing Out Crime

How Store Environments Affect Crime and Loss

Can the store environment deter shoplifting and at the same time boost sales?  The Loss Prevention Research Council and the University of Florida think so.

Together they have done much of the existing research on place-based crime theories regarding the retail environment. Armed with this new set of information, store designers, managers, and LP professionals can work together to create and maintain store environments that promote sales, while minimizing theft opportunities.

Seasoned shoplifters assess these opportunities as a combination of security cameras, employees, space and other customers, and usually know within a matter of a few seconds upon entering a store if it provides a desirable theft target.

The three main crime-related theories relevant to retail design are:

Rational Choice Theory:  Shoplifters weigh the risks and rewards before committing the crime.

The Theft Triangle:  Offenders decide to shoplift based upon three factors:  perceived need, perceived access, and perception of personal risk.

Crime Prevention Through Environmental Design (CPTED):  Factors such as employees, product placement, visibility and cameras can impact a shoplifter’s perception of access and risk.

Maximizing the CPTED causes the potential shoplifter to feel like he is being watched and recorded, and boil down to 5 strategies:

1) Improve natural surveillance:  Improving lines of sight throughout the store.

2) Optimize CCTV:  Coverage must leave no “blind spots” and be free of glare, high fixtures, signs or other objects blocking camera views.

3) Support store and LP employee efforts:  Territory and boundary definition helps staff guard particular areas and should be designed to optimize visibility, especially entry and exit points.  Guards at exits are a very effective means of discouraging theft.

4) Control exit access and provide exit screening:  Indirect access to exits, receipt checkers, exit rails, and exit doors with electronic detection antennas can be very effective at increasing perceived risk.

5) Harden Targets:  Limiting accessibility with devices such as cords, cables and glass cases increase perceived risk but also make the protected items harder to sell.  Target hardening exists on both store and fixture levels.  Each store has areas which are “safer” or more visible than others.  This is where the highest loss items should be placed, where they are away from exits, covered by obvious CCTV and in direct line of sight of employees.  Fixture level hardening involves glass cases, spotlighting while attaching it to the store, using fixtures that cause loud noises, forcing two-handed selection and slowing selection rates will deter thieves.

More research is still needed and it’s clear that designing stores to prevent crime is still in its infancy, but it’s a sure bet that preventing theft is a lot cheaper than the alternatives.  Granted, each store and department within a store is different, and poses different LP challenges.  These challenges should be addressed at the most preliminary stages of store design and carried through construction and management of the store.  Asset protection should be treated as the priority it is, since in order to sell merchandise you have to keep it available for the paying customer.

Movers & Shakers

People you know, who are on the go…

Attend Upcoming Loss Prevention Conferences

Some of the LP industry’s leading conferences are right around the corner:

Retail Industry Leaders Association (RILA) Loss Prevention Auditing & Safety Conference in Dallas,Texas — April 29 — May 2 

From the RILA website:

Loss Prevention Auditing & Safety 2008 is the meeting place for loss prevention executives and their retail partners. With the experts themselves presenting on some the top issues facing loss prevention including organized retail crime, shortage analytics, hiring talent and building partnerships within an organization, RILA’s Loss Prevention conference continues to be recognized as the most important educational event in LP and asset protection. 

http://www.retail-leaders.org/latest/rlEducationEvents.aspx?section=EDUCPC

Please stop by our booth #435, introduce yourself, and enter our free raffle to win a 42” LCD Digital Television.

National Retail Federation (NRF) Loss Prevention Conference & Expo in Orlando, Florida — June 23 — June 25

From the NRF Website:

The NRF Loss Prevention Conference & Expo is the Nation's leading retail-specific loss prevention conference. NRF's event can help you Predict, Prevent, Protect company assets- focusing on key issues: organized retail crime, on-line fraud, eFencing, interviewing, investigating, pandemic preparedness and more!

http://nrf.a2zinc.net/lp08/public/enter.aspx

As usual, Hart Systems will be participating in both of these exciting events, and we'll be discussing loss prevention through inventory control, and displaying our rental system for self-scanned inventories - the most accurate physical inventory system available today.

Please stop by our booth #545, introduce yourself, and enter our free raffle to win one of two 42” LCD Digital Televisions.

We're also planning some fun and interesting networking events.  To find out more about these events, to make arrangements for a private demonstration at the conference, to get your free Exhibit Hall passes or to simply learn more about our scanning solutions, Click Here or call us at (800) 252-2818.

To learn more about how we can help you achieve your physical inventory goals, please call us at 800-252-2818, click here -Tell Me More- to send an e-mail, or visit our website at http://www.hartsystems.com/.

To view a previous Hart Monitor, click January, February, March

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Hart Quote !!!

"Failing is good as long as it doesn’t become a habit." 

Michael Eisner — former CEO of Disney

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