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Retail sales in July remain sluggish; Cash for Clunkers to blame?

Found in: Economy, Monthly Retail Sales
Friday
August 7, 2009
1 Comment

Retail sales in July continued to be a mixture of disappointment and mediocrity.

Retailers catering to teens saw a mixed bag of results as teens decided to spend more money at Aeropostale (same store sales up 6%) and Buckle (same store sales up 2.8%), but both retailers missed analysts projections. American Eagle saw an 11% drop in same store sales, on top of the 7% drop they saw this time last year. Abercrombie & Fitch continued their terminal velocity fall with a 28% drop in same store sales. No good.

Macy’s saw a 10.7% drop in same store sales, JCPenney reported a 12.3% drop in same store sales, while Kohl’s managed to eek out a nearly flat month (0.4% increase in same store sales). I guess shoppers are really going nuts over that new line by Avirl Lavigne.

Besides the general state of the economy and unemployment through the course of the year, some analysts suggest that the, recently enacted and more recently refueled, Cash for Clunkers program is diverting money from the retail industry:

“One of the unintended negative side effects of the cash for clunkers program was that it’s going to remove money that probably would have been spent in retail stores and restaurants and is now going to go toward a car payment,” said Purdue Consumer Sciences Professor Dr. Richard Feinberg.

And not just “spare change.”

Feinberg estimates the nation’s retailers could lose up to $300 million a month as consumers spend their disposable income on loans instead of lunch. By the end of what’s expected to be another tough holiday shopping season, losses could add up to between $1.5 billion and $2.5 billion, Feinberg says.

More information on retail sales from the New York Times and Los Angeles Times.

Most Popular Posts of 2008

Found in: Industry News, Retail, Site News
Wednesday
December 31, 2008
No Comments

I just took a look through my statistics for the year and have compiled a list of the most popular posts here on No Turn On Red. Looks like the real-time information provided by retailers via Twitter was the breakout topic that I wrote about this year.

Happy New Year to all my readers. May we all be surprised and see 2009 turn into a brighter year than we are all expecting! Thanks to everyone who visits, reads, and shares information from this blog. I do appreciate the readership!

Express Lane for November 25

Found in: Black Friday, Economics, Express Lane, Holiday 2008, Industry News
Wednesday
November 26, 2008
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Couple of stories that I’m reading this morning:

CNBC’s got a great run down on Amazon’s holiday strategy. The online retailer saw a 42% sales growth in Q4 2007 and forecasts 12 – 15% growth this year. Remarkable feat considering consumer spending is forecast to be down this season. The retailer looks to siphon sales from other retailers by offering low prices and “ridiculous deals”.

Shop.org has released more data on expected consumer habits through this Holiday season and especially for this weekend. Bottom line, consumers are using the web to enhance their real world shopping experience. Be prepared.

Just on the heals of reporting very soft e-commerce sales growth in October, Comscore forecasts flat growth in e-commerce sales for this holiday season. They estimate a 4% decline in sales through the first 23 days of the Nov-Dev shopping season.

Earlier today I talked about JCPenney’s use of social media, Twitter, and viral marketing. I missed this press release from the retailer detailing some of the improvements they’ve launched on jcp.com for a better online shopping experience. More product photos, customer reviews, and more online-only promotions. Kohl’s holiday strategy also emphasized a better online experience.

JCPenney, Twitter, YouTube and Viral Marketing

Found in: Effective Use Of, Retail, Tips for Using, Twitter, Use of Social Media
Wednesday
November 26, 2008
5 Comments

JCPenney has unveiled an intriguing viral marketing campaign called “Beware of the Doghouse”. The concept is simple: Men should get the “right” gifts for their spouses in order to avoid being put in the doghouse. There’s a website and a four minute video out there supporting this campaign.

The campaign is also supported by a Facebook tie-in that some feel is a poorly executed social media strategy. I tend to agree on this one – I’d rather see retailers put their effort into making lasting relationships with their customers, rather than gimicky Facebook apps.

However, I can’t completely fault JCPenney for their social media efforts as the retailer has also unveiled a Twitter account that, so far, seems to be a very effective use of the service. The account (@askJCP) was started last week and there seems to be a real person behind it (rather than a marketing script). Yesterday, there were a lot of Tweets about the Doghouse viral video, which does seem a bit forced and contrived. But there’s also some helpful information about the retailer and I hope they continue to engage people on Twitter and attempt to make solid relationships.

I should also point out that JCPenney uses Youtube to broadcast a weekly run down of the hot items and promotions in-store. Their channel is updated weekly and the commercials are well produced and informative. I believe the retailer started these broadcasts with the Back to School season.

I’m interested to see how the viral video plays out. I personally found it funny and remarkable well produced. So far, it’s getting some reaction on Twitter but people generally see the humor in the video. But frankly, I wonder if JCPenney had any second thoughts about rolling out their campaign so shortly after another major brand has such a nightmare on their hands last week.

Last week, the people being the ibuprofen Motrin unveiled a viral video campaign that most people agreed missed the mark. Reaction was quick and fierce and turned into a PR nightmare for the company.

I am enthused by JCPenney’s use of social media, social networks, and other available web applications. I hope that marks a long term commitment on behalf of the retailer and all of this doesn’t disappear after Christmas.

Here’s hoping other retailers continue to hop on the social media bandwagon and aim to connect with their customers online.

Boscov Brothers Bid for Boscov Stores

Found in: Bankruptcy, Economics
Friday
October 17, 2008
1 Comment

Members of the family that founded and, for many years, ran the Boscov department store chain have revealed that they have bid to buy back the stores current under bankruptcy protection:

Albert R. Boscov and his brother-in-law Edwin A. Lakin are among the group who put in an offer for Boscov’s Inc., in a bankruptcy auction that culminates next week with the selection of a winning bidder, Boscov said in a report published today.

The pair, who helped run the company for decades, received multimillion-dollar buyout packages when they retired in January 2006 and handed the controls to Lakin’s son, chief executive officer Ken Lakin.

Boscov’s, you may remember, filed for bankruptcy protection in August and immediately closed 10 of their 49 stores. The remaining 39 stores are still operating under bankruptcy protection while bids are accepted that will determine the future of the company.

The deadline for bids was October 15 and more information may be revealed next week as to who the new owner will be. The other top bidder is Versa Capital Management.

I’d like to see someone buy Boscov’s who will continue to operate it. It’s a respectable mid-size department store chain. While my local Boscov’s has already closed, I hope the other 39 can remain open as long as financially feasible.

With the economy as it stands today, I can’t really imagine someone buying the chain with the intention to shut it down and sell off the real estate. There’s not a huge market for mall anchor real estate right now. Other department store chains, like Kohl’s and JC Penney, have already announced reductions in their short-term growth plans. Who else would be moving in to these locations?