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Keeping Our Finger On The Pulse Of The Retail Industry

Retailers Report Slow September Sales

Same-Store Sales Rise 1.7%

The ICSC_UBS tally of retail sales rose a slim 1.7% in September, compared to a 4% increase in the year-ago period and forecast for a 2.5% improvement. U.S. retailers reported weaker than expected September same-store sales because of abnormally warm weather and concerns over the health of the economy, according to the International Council of Shopping Centers (ICSC).

 “Sales are coming in soft, as expected,“ said Ken Perkins, president of RetailMetrics LLC. “It was a perfect storm, a combination of abnormally warm weather, high food and energy prices, a continued sluggish housing market and tight credit.” Others warned that the slowdown could extend beyond September.

Among the retailers on Thursday reporting September sales, the results included:

·         Wal- Mart – 1.5% increase, slightly below the 1.8% estimated
·         Target – increased 1.2%, analysts expected 2.2%
·         Macy’s – posted 2.7% drop
·         J.C. Penney – went down 4.6%, well below the 0.1% forecast
·         Nordstrom Inc. – up 3.2%, lower than the 5.0% estimate
·         Gap Inc. – dropped 7%, worse than the 4.6% expected
·         Limited Brands, Inc. – had a 4% drop
·         American Eagle Outfitters Inc. – had a decline of 2%
·         Saks Inc. – rose 7.7%
·         TJX Cos. inc. – went up 2%

Michael P. Niemira, ICSC's chief economist and director of research, added, "Despite a softer September reading, the consumer spending pace has not fundamentally changed since February.  Overall, the fiscal year-to-date reading, at 2.3%, has seen a considerable drop since last year's 3.6%. We expect to see much of the same for the foreseeable future.”

Consumers Expected to Spend Over $5 Billion on Halloween

Retailers everywhere are stocking up on spooky Halloween merchandise in anticipation of the most haunting day of the year, according to the National Retail Federation.  The NRF 2007 Consumer Intentions and Actions Survey found that consumers are expected to spend $5.07 billion this Halloween, up from $4.96 billion last year and only $3.29 billion two years ago.  Spending is expected to rise slightly in all categories this year.

Halloween remains the sixth-largest spending holiday and continues to be one of the biggest decorating holidays of the year, second only to Christmas.   

The average consumer celebrating Halloween will spend $64.82 on Halloween, compared to $59.06 last year. 

HOW Consumers Plan to Celebrate Halloween

Canadian Dollar Reaches Parity With U.S. Dollar

American Online Retailers Stand to Gain

Canada's dollar rose, trading equal to the U.S. dollar for the first time in 31 years, as climbing commodity prices boosted the outlook for the world's eighth-biggest economy.  According to the Bank of Canada’s daily exchange rate, the Canadian dollar is now worth more than the U.S. dollar – trading at exactly 1.02 U.S. dollars yesterday, on October 10th.

As reported by Haris Anwar at bloomberg.com, the currency hasn't equaled $1 since November 1976, when Pierre Trudeau was Canada's prime minister. According to Toronto-based James Dutkiewicz, of CI Investments Inc., Canada's second-largest mutual fund manager, ``This is a story of U.S. dollar weakness, the commodity boom, and our unparalleled fiscal situation among the Group of Seven countries.''

Canada has benefited from rising demand for copper, gold, wheat and oil from the U.S. and from emerging economies such as India and China. The country is the world's largest producer of uranium, the second-biggest exporter of natural gas, and sits on the largest pool of oil reserves outside the Middle East.  Rising tax revenue and energy royalties have allowed the Canadian government to post 10 straight annual budget surpluses, the only country among the Group of Seven nations with a balanced account.  The Group of Seven (G-7) includes the U.S., Japan, Germany, the U.K., France, Italy and Canada

Ian Austen reports in the NY Times that large numbers of Canadians typically cross the border when the Canadian dollar rises vs. the U.S. dollar, in search of lower prices and greater selection at American stores... and today, online sales now let Canadians bargain-hunt in the United States without leaving home.

If early indications hold true, some of the biggest gains from the Canadian dollar’s strength may be at online retailers based in the United States. Because Canada’s relatively small population, some 33 million vs. 302 million in the U.S., makes online operations less cost-effective, relatively few Canadian retailers sell on the Web (less than 1/3 by some estimates).  That limited local competition, combined with the strong Canadian dollar and the moderate cost of expanding into Canada, make the country a tempting target for American online retailers.

Paulina Sazon, a direct-marketing strategist at Canada Post, said the volume of shipments through the Canadian postal service’s special service for American retailers increased 38% over the last year. A spokeswoman at UPS Canada said her company had also registered "significant growth" as a result of the strengthened Canadian dollar.

American online retailers tell the same story - with L. L. Bean, Crate & Barrel and Brookstone all posting noticeable increases in sales to Canada in the last few months. In some cases, American retailers could not say how much of their increase in Canadian sales was attributable to the strong Canadian dollar and how much resulted from increased marketing efforts.

Just as U.S. retailers are benefiting from the strength of the Canadian dollar, so are U.S.-based companies that offer services to Canadian businesses... and Hart Systems, the leading provider of self-scanned physical inventory services to retailers, is no exception. 

Jared Goldsmith, president of Hart Systems, explains that Hart’s Canadian business has steadily increased over the past three years - with several large, national, Canadian chains utilizing the Hart Self-Inventory System for their physical inventories – and there has been a dramatic upturn in just the past few months.  According to Jared, “This year, over 20,000 Canadian store associates will use Hart scanners to conduct their physical inventories.”

“Our growth in Canada, just as in the U.S., is due mainly to the exceptional system and service that we provide, and the value that we add to our clients’ operations,” says Jared, adding, “but the strong Canadian dollar has certainly had a positive influence.  While our pricing has always been very attractive – offering significant savings compared to the cost of outside counting services –the new exchange rates have really increased those savings for Canadian retailers.”

Pointing to the savings and process improvements of the Hart Self-Inventory System, along with the growing trend toward self-inventory and the Canadian retail community’s increased desire for an alternative physical inventory provider, Jared predicts that Hart’s growth in Canada will continue to accelerate.

NRF 2007 Holiday Survival Kit

October is here and the Holidays are upon us!

For some, the thought of the holidays seem in the distant future.  For retailers, the rush is on!

The National Retail Federation has released the 2007 Holiday Survival Kit - and this will be the first of three monthly excerpts in The Hart Monitor, highlighting some of the key points and bits of information from the release.

§         The NRF projects that holiday sales will be 4.0% higher in 2007 than they were in 2006.  If correct, 2007 holiday sales will amount to $474.5 billion.

§         On the average, holiday sales have increased 4.8% per year for the last ten years.

§         The holiday season can represent between 25%-40% of many retailers annual sales.  In 2006 holiday sales represented 19.6% of total retail industry sales.

§         To determine holiday sales, the total retail industry sales from November through December are used.  This includes Thanksgiving, Christmas, Hanukkah and Kwanzaa.

§         Retail industry sales include discount stores, department stores, grocers, specialty stores, etc., and exclude automotive dealers, gas stations and restaurants.  Online sales are tallied separately.

When do consumers start their holiday shopping?  According to the NRF 2006 Holiday Research Results:

In 2006, 40% of consumers started shopping before Halloween and 10.8% completely finished shopping ten days before Christmas.

Look for Part Two of the 2007 Holiday Survival Kit information in the November Hart Monitor! 

See you there.

Last Week was Customer Service Week

October 1st – 5th, 2007

Customer Service is recognized and celebrated annually during the first full week in October.  It provides the opportunity to boost morale, and to motivate and promote teamwork - not only in the customer service department, but company-wide as well.  It recognizes the importance of customer service and honors the people on the frontlines.

The International Customer Service Association (ICSA) began Customer Service Week in 1988.  In 1992 the U.S. Congress proclaimed Customer Service Week a nationally recognized event.  Since 1988 the Customer Service Group has been the sponsor of the official Customer Service Week program.  They provide how-to information, materials imprinted with the official logo, and suggestions from hundreds of professionals who share their celebration stories, plans and ideas.

We at Hart have celebrated our employees’ exceptional performance and dedication to delivering excellent customer service for many years now.  The Hart Help Desk has always received high praise from our clients for their helpfulness and professionalism – they’re a true source of pride within our organization - and we’re committed to continuing that trend. Last week, along with many other companies around the country, we took some time out to say “THANKS!” to the people that help make us who we are - with decorations, breakfasts, goodies and a celebration luncheon where senior management had a chance to offer sincerest thanks and congratulations to each employee.

For more information on Customer Service Week, go to www.CSWeek.com .

Movers & Shakers

People you know, who are on the go…

The Wet Seal:
 
John Luttrell left for Old Navy and is being replaced as EVP and CFO by Steve Benrubi of Charming Shoppes.

Start checking for Missing Fixtures BEFORE THE END of the inventory

To ensure a timely and less stressful inventory, you should begin checking for missing fixtures (fixtures that contain merchandise that have not yet been counted) at least an hour before you expect to complete the count.

For instance, many inventories begin in the morning, and the merchandise on the Floor should be counted before the store opens.  If you wait until it’s time to open the store to check for any missing fixtures, you may find yourself in a bind with a number of fixtures to be located and counted, and customers starting to enter the store.

If you begin tracking down fixtures earlier, you will not be pressed for time, and you’ll be able to reassign your counters quickly after they finish the sections that they’ve been working in.

If you’re using the Hart Self-Inventory System, print or display the “Missing Stickers” report, and then make sure that those stickers are accounted for.  In many of our systems, the Missing Stickers report is automatically printed once the inventory reaches 90% complete.  This is just one of many features of the system that helps guide your stores through the best practices for physical inventory, and helps ensure an accurate and trouble-free count. 

Happy Hunting!

HART SYSTEMS The Self-Inventory Experts 

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/.

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© 2007 Hart Systems, Inc.

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“Failing to plan is planning to fail.”

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Hart Systems Inc.
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Hauppauge, NY 11788