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THE |
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MONITOR |
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Keeping
Our Finger On The Pulse Of The Retail Industry |
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Volume VIII,
Issue 8 |
August 2010 | |
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Hart Systems, LLC
is the rental
solution for inventory scanning.
We Make Self-Inventory Simple!
Contact us to find out how we may help you improve your
physical inventory process.
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Sales
Results Mixed in July |
Hot weather, deep discounts and concerns about the economy made for
mixed sales in July, raising retailers’ concerns about
back-to-school spending. According to Thomson Reuters, 61% of
retailers missed expectations. However, there were some strong
performances; including Macy’s whose efforts at localizing its
assortment continue to pay off.
July marks the fourth straight month of weak spending after
retailers got a surprise bounce earlier in the year. But confidence
is waning as worries grow that the economic recover is stalling.
July also marks the end of most retailers’ fiscal second quarter.
However, it is considered the least important month in the
quarter because stores use it to clear out summer leftovers and
bring in fresh fall merchandise.
Some bright spots:
• Limited Brands reported
a 12% gain in July, more than double what analysts expected.
• Abercrombie & Fitch
reported a 7% gain in July. Analysts expected a 4.1% gain.
• Gap also exceeded
expectations with a 1% rise in expectations.
• Macy’s reported a 7.3%
increase in July.
Other same-store sales for July:
• Ross Stores’ sales rose
2% in July.
• Aeropostale reported a
1% increase for July.
• Target reported a 2%
increase in same-store sales for July.
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Sales
Are Up For Back to School Merchandise |
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Having held out last
year on many purchases, kids heading back to school this year
will be returning in style. The National Retail Federation's
2010 Consumer Intentions and Actions Back to School survey,
conducted by BIGresearch, found that the average American family
will spend $606.40 on clothes, shoes, supplies and electronics,
compared to $548.72 last year, and close to the $594.24 in 2008.
Total spending on school-aged children in grades K-12 is expected to
reach $21.35 billion.
Total 2010 K-12 and college spending will reach $55.12 billion,
making Back-To-School the second biggest consumer spending event for
retailers just behind the winter holidays.
"We are encouraged by the fact that parents are eager to start
their back to school shopping this year, but the industry still
remains cautiously optimistic about recovery," said NRF President
and CEO Matt Shay. "As the second half of the year gets under way,
retailers will gauge their customers' spending appetites, which
often serve as a bellwether for the all-important holiday season."
The economy will still play a role in American families' back to
school spending. This year's survey found:
• 44.3 % will buy more store brand or generic products
(from 41.7 in 2009)
• 30.3 % will comparative shop online (up from 26.4% in
2009.)
• 8.1 % will decide if their children
should attend public or private school (compared to 5.7% in 2009).
With growing children there are growing apparel budgets.
Spending on apparel will take up most of consumers' budgets with the
average family of school-aged kids expected to spend $225.47 on
jeans, shirts and other types of clothing. From laptops and net
books to smart phones and MP3 players, parents are expected to spend
an average of $181.60 on electronic or computer-related school
needs. Families will also spend an average of $102.93 on shoes and
$96.39 on school supplies.
As far as where they will shop this year, seven in 10 (71.2%)
will head to a discount store and more than half (53.9%) will visit
their favorite department store. Other popular shopping
destinations include clothing stores (49.0%), electronics stores
(23.0%), office supply stores (41.2%), drug stores (19.5%) and
thrift stores (17.0%). Whether saving a few bucks, comparing
prices or simply because of convenience, more people will shop
online this year (30.8% vs. 22.2% last year.)
Spending on school items for K-12 students is expected to increase
this year while spending on college-specific items will remain
similar to last year. According to the NRF's 2010 Back to
College Consumer Intentions and Actions survey, conducted by
BIGresearch, the average college student's family will spend $616.13
on new apparel, furniture for dorms or apartments, school supplies
and electronics. Students and their families spent only slightly
more last year ($618.12). Total spending on back to college
merchandise is expected to reach $33.77 billion. The survey also
found that just over half (51.8%) of college students will live with
mom and dad, down from 58.5 percent last year when money was tighter
and jobs were more scarce.
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Sales
Tax Holidays are Win for Retailers, Shoppers and States |
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As reported in an article in Retail’s
BIG Blog, nearly all types of tax relief are well received with most
of us, however, the current climate of budget shortfalls at both the
state and federal level mean that relief is not in abundance in
2010. However, there may be some hope in with the upcoming
Back-to-School season in the form of state sales tax holidays.
Here are a few reasons why sales tax holidays represent a big check
in the “win” column for shoppers, retailers and the states that
implement them.
Shoppers - Since 1997, a number of individual states (New
York was the first) have offered sales tax holidays each year to
help soften the blow of back-to-school expenses on families. NRF’s
recently released Back-to-School survey found that the average
family will spend $606.40 on back-to-school merchandise in 2010 –
meaning a sales tax holiday in a state with a 5 percent tax rate
would save the average family $30.32. (This assumes all items
purchased were tax-free, when in actuality the list of items
exempted from tax varies from state to state.) While those savings
may seem small, a few extra dollars saved here and there is crucial
for families trying to stick to a budget in the current economy.
Retailers - Retailers win because they sell more. NRF members
report that stores in states with sales tax holidays see significant
increases in traffic and sales during these periods. Retailers also
report that increased sales are especially significant in the first
year or two that a sales tax holiday is held. While it is true that
some of these sales are just shifted from other weekends when people
would shop, the importance to retailers is that the traffic in the
stores results in many additional sales that would not otherwise be
made.
States - Shoppers that are attracted to sales tax holidays
generally make additional purchases of items that are not eligible
for the tax holiday, raising additional sales taxes for the state
and additional income taxes for the state. So far in 2010, 16 states
have announced sales tax holidays for back to school. These tax-free
holidays usually include a list of non-taxed items which range from
clothing and footwear to school supplies, books and even computers
and sports equipment. In many cases, residents of bordering states
without a sales tax holiday will cross the state line to do their
spending, shifting state sales and income tax revenue from the state
without the holiday to the state with the holiday.
Many state governments have recognized the sales uptick and are
getting creative with the incentives they offer. Some offer sales
tax holidays at other times of the year for energy-saving
appliances, or hurricane preparedness items, for example. Regardless
of the type of sales tax holiday, the positives that this action
brings – increased spending and saving budget-minded customers a few
extra bucks, should put this movement at the top of the radar for
retailers, shoppers and states alike.
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Marshalls Discount Stores Heading North to Canada |
According to Toronto Sun, Marshalls will
be heading to Canada with plans to open six new stores in the coming
months. The Retailer’s parent company TJX Companies Inc. recently
made their announcement about the expansion to the North.
TJX, which also owns Winners and Home Sense stores, will be opening
it’s first store Marshalls, north of the border in Spring 2011. This
is just a part of a corporate global expansion strategy that will
see the company open new stores in the U.K., Ireland, Germany and
Poland.
They are an off-price retailer that carries thousands of fashion and
house wares items for less, and will offer Canadians yet another
avenue to great brands, great fashions and excellent values for the
entire family. The Canadian market can support between 90 and 100
Marshalls stores and as many as 330 outlets between all four chains.
More recently, Victoria’s Secret and Juicy Couture announced plans
to open Canadian locations, due to Canada’s sound economy. Big
Companies are seeing that now is a good time to strike and they’re
seizing the opportunity, due to cheap rental space, and economic
spending.
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Movers
& Shakers
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People you know,
who are on the go… |
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This monthly installment to The Hart Monitor
includes executive moves within the retail industry as reported in
publications such as WWD, Hoover's, and various other sources. |
Estée Lauder:
The title of president, Tom Ford Beauty and new business has been
issued to Caroline Geerlings at cosmetic and fragrance
company The Estée Lauder Companies. Meanwhile, Kathleen Pierce
has been named VP global communications, Aramis and Designer
fragrances.
Borders:
At bookstore operator Borders, Mark Bierley's new title has
become EVP and CFO as well as COO, Borders, Inc. while Roz
Thompson is now SVP of human resources.
Pep Boys :
Scott Webb has been named EVP merchandising and marketing and
Bill Shull is now EVP stores at automotive parts retailer The
Pep Boys – Manny, Moe & Jack.
Wal-Mart:
At mega-retailer Wal-Mart Stores, COO Bill Simon has been
promoted to president and CEO of U.S. He succeeds Eduardo
Castro-Wright, who remains as vice chairman and moved to
president and CEO, global.com and global sourcing. Also, EVP and
chief merchandising officer John Fleming will resign from the
mega-retailer while EVPs John Westling and Jack Sinclair
will temporarily succeed him.
Paul Stuart:
At upscale apparel retailer Paul Stuart, CEO Clifford Grodd
has passed away. SVP Michael Ostrove, who handled the
day-to-day business during Grodd's illness, will continue to do so
now as president.
Dillon:
As president John Bays retired from regional supermarket
chain Dillon Companies, Joe Grieshaber stepped in and was
named president at the Kroger-owned company.
J.Crew:
At apparel retailer J.Crew Group, Jenna Lyons is now the new
president and executive creative director. President of retail and
direct channels Tracy Gardner will resign in September.
Zale:
Becky Mick has become SVP and chief stores officer at jewelry
retailer Zale.
PriceSmart:
Membership-based retailer PriceSmart, president Jose Luis Laparte
is now president and CEO. Robert Price has resigned.
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Every issue of The Hart
Monitor will contain a 'TIPS' section of helpful information regarding
Inventory or Loss Prevention for retailers, including some of the
industry's "Best Practices." If you have any Inventory or LP
tips that you'd like to share, please
CLICK HERE
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Attend Upcoming Loss
Prevention Conferences |
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Canada’s LP industry’s leading
conference is right around the corner: |
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Retail Council of Canada
2010 Loss Prevention Conference |
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September 14, 2010, International
Centre – Conference Centre, Mississauga, Ontario, Canada |
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From the RCC Website: |
The Retail Loss Prevention Conference
serves loss prevention and retail operations professionals
across Canada and focuses on all loss prevention aspects within the
retail industry. This event brings in a full complement of
exhibitors who provide ideas and expertise on a variety of products
and services geared toward preventing retail losses. The
conference's aim is to provide strategic insight and best practices
of the industry, and strengthen relationships between the retail
industry, law enforcement, and governments
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