YONKERS, N.Y. -- 'Tis the season to tighten the belt on holiday spending for many Americans this year.
Over three-quarters (76%) of Americans plan to cut back on spending on traditional holiday expenses such as gifts, travel, entertaining, decorations, charitable giving, holiday cards, and tipping, according to a new Consumer Reports Holiday Shopping Poll.
Full results of the poll are available at www.ConsumerReports.org.
Consumer Reports Holiday Shopping Poll also found that some consumers will be starting the holiday season with leftover holiday debt. Six percent of Americans -- some 12 million consumers -- are still carrying debt from last winter's holiday season.
Among the holiday spending cutbacks, 59 percent said they will be giving fewer gifts, and nearly half (49%) will be cutting their travel plans.Who is most likely to be left off the holiday gift list?
Among consumers scaling back on gifts, most (84%) were willing to cut back on buying for themselves. But the family pooch may still get a treat or two. Only 23 percent of respondents plan to cut back on gifts for their pets this season -- far fewer than those willing to cut back on buying for friends and families (40%), service providers (30%) or co-workers (29%).
Release of Consumer Reports' Holiday Shopping Poll coincides with the launch of the "Tightwad Tod" Blog on www.ConsumerReports.org/TightwadTod.
For shoppers looking for great ways to save this holiday season, Consumer Reports' Tightwad, Tod Marks is the guy. Every day, Tod will blog on the news that affects the pocketbook, great buys for the holidays and those offers that sound too good to be true."Being a tightwad doesn't mean you're a cheapskate -- it just means you spend your money wisely, and have more to spend on the things you really want this holiday season," said Tod Marks, senior project editor, Consumer Reports and "Tightwad Tod" blogger.
The Consumer Reports Holiday Shopping Poll also finds:Shopping Season 2008: Off to a slow start-- Similar to the 2007 holiday shopping season, 2008 is expected to getoff to a slow start.
Only 29 percent of consumers have started theirshopping. Only about half (45%) of consumers anticipate they will bedone buying gifts by the second week in December. Approximately 24percent say they will push their holiday shopping right up to December24th. About 5 percent of consumers don't plan to complete theirshopping until after the holidays.
No humbug for the holidays: Consumers remain optimistic-- Despite all the budgeting and cutbacks, consumers remain optimisticthat their holiday will be as enjoyable as in year's past. Themajority (88%) expect their holidays to be at least as happy as lastyear, including 28 percentage points who expect to be even happierthan last year.
Making a list and checking it twice: Holiday Budgets-- If you want to control your spending over the holidays, considermaking a budget before you begin to shop. You won't be alone; thisyear 59 percent of consumers plan to make a budget -- an increase ofmore than 17 percent from the year before.-- Making a budget is the easy part, sticking to it proves harder formany shoppers. Of the 39 percent of consumers who made a budget lastyear, only 45 percent stayed on it while, nearly as many (44%) wentover budget last year. Only about 3 percent went way over budget.--
This holiday season may see an increase in the usage of cash.Twenty-one percent plan to use cash moreover half plan to rely less oncredit cards (51%). The change is especially evident in young peopleages 18-34 -- who have tended to favor credit in the past.Is it always better to give than receive? Not if it's socks!
-- The number one gift consumers are planning to buy for the 2008 holidayseason is clothing (69%). But, that was the category of gifts receivedin 2007 that triggered the most disappointment among recipients (39%).Forty-seven percent of men said they were disappointed to receivevarious types of clothing for the 2006 holidays including themost-hated socks.
-- The number two gift consumers are planning to give for 2008 is giftcards (66%), followed by toys (62%), cash (61%), electronics (47%),jewelry (40%), pet toys (31%) and small appliances (24%). Toys seem tobe making a comeback this season after last years recalls when only49% of consumers had planned to purchase toys.
-- Consumers planning to give electronic gifts on a whole have declinedfrom last season from 53 to 47 percent this year, despite the factthat it remains the most wanted gift for both men (26%) and women(14%). Women also were equally interested in gift cards (14%),followed by jewelry (13%), and money (12%).
-- Gift-givers may still want to opt for electronic gifts; ConsumerReports poll found that it's the gift people would most like toreceive (20%). Mp3 players or iPods (18%) remain strong at the top ofthe most wanted electronics, and video games, which fell back lastseason, are back on top (18%).
-- Among those who plan to give money or cash as a gift this year, nearlyone-quarter (23%) plan to give it less frequently than they did lastyear.-- Does that gift look familiar? Re-gifting is on the rise. Nearlyone-third of respondents (31%) admitted to re-gifting a present lastyear. This is up from 25 percent in 2006. The most likely suspectsare still women (38 %). Only 24% of men admitted to ever re-gifting,which is about the same as last year.The gift that keeps on taking: Gift Cards
-- Gift cards continue to be a popular choice among shoppers, 66 percentof respondents plan on buying gift cards, up from 62 percent in 2007.Gift cards are second only to clothing (69%) for the 2008 holidayseason.-- For the 2007 holidays, 62 percent of respondents received a gift card,which is up 6 percentage points from the previous year. Nearly a yearlater, 25 percent of the gift card recipients have not used one ormore of these cards. Among consumers with unredeemed cards from lastseason, 57% have two or more.
-- The gift card is a gift that keeps on taking 58 percent of consumersspend more than the amount of the card when they go to redeem thegift.-- Time continues to be the most common reason gift cards have not beenredeemed. Well over half (54%) of consumers indicate not having thetime was the reason for unused cards. This was followed by they forgotabout it (38%) and can't find anything they want (35%).
Showing posts with label retail trends. Show all posts
Showing posts with label retail trends. Show all posts
Tuesday, November 11, 2008
September Outdoor Sales Mixed Bag, Buoyed by Accessory and Internet
Overall September numbers reported in the most recent edition of The Outdoor Topline Report, produced for Outdoor Industry Association (OIA) by the Leisure Trends Group are a mixed bag as September saw one of the worst economic crisis in recent history affect all types of consumer spending.
The Commerce Department reported overall personal spending dropped .3 percent in September, the largest drop since June 2004.According to The Outdoor Topline Report, core outdoor retailers saw sales in all three channels (specialty, chain, and internet)* total $351M this month, 2% above September 2007. Unit sales for all three channels increased 5% for the same period.
But specialty stores posted a decline for the first time since October 2007.Channel & Category BreakdownBreaking down the September sales by store channel, chain store sales totaled $174M, gaining 6% in units and 4% in dollars compared to the same month last year.
Independent outdoor specialty stores sold $111M, a 5% decline from September 2007. Unit sales also dropped 5% for the period. Outdoor internet merchants were not slowed down by the economy at all.
In September, the entire outdoor internet channel brought in $67M, increasing sales by 20% in units and 11% in dollars compared to September 2007. Similar to findings in other industries, core outdoor shoppers seemed reluctant to buy big-ticket items such as tents, sleeping bags, packs, instruments and sport racks.
However, lower-priced camping equipment accessory categories gained 15% in units and 8% in dollars helping buoy overall outdoor sales.Apparel and footwear were mixed, with outwear and sportswear remaining flat, boots and shoes made modest gains and sandals declined.Following the accessory trend, apparel and footwear accessories saw healthy increases compared to last September.
Look for accessories and small-ticket items to gain traction in a soft economy. PaddlesportsAll paddle product sales from all three channels (specialty, chain, internet) totaled $26M in September, down 13% from September 2007. Unit sales decreased 8% for the same period. Paddle specialty stores had sales of $20M this month, suffering a 17% decline in units and a 15% decline in dollars. Total chain paddlesport sales reached $4.5M, down 3% from September 2007.
The internet channel saw September sales increase 14% in units but decrease 7% in dollars with $1.8M in total sales.
Year-to-date, all paddlesport sales from all three channels totaled $327M, down 1% from the same period in 2007.Big-ticket paddlesport items saw the largest declines in September. Boats and paddles lost sales in each of the three distribution channels, while accessories and apparel saw sales increase in chain and internet stores.
August & September Sales CombinedSeptember sales numbers alone miss a key factor in sales growth. A large portion of revenue in August and September occurs during the traditional Labor Day Sales. In 2007, Labor Day Sales were mostly counted in September, while this year’s sales gave August the boost because of the calendar.
Looking at August and September together, all products in all stores grew 8% in units and 7% in dollars. Equipment increased 6% and 5% in units and dollars, respectively. Equipment accessories grew 16% and 13% respectively and apparel grew 5% and 4%. Footwear dropped 10% in units but grew 5% in dollars
The Commerce Department reported overall personal spending dropped .3 percent in September, the largest drop since June 2004.According to The Outdoor Topline Report, core outdoor retailers saw sales in all three channels (specialty, chain, and internet)* total $351M this month, 2% above September 2007. Unit sales for all three channels increased 5% for the same period.
But specialty stores posted a decline for the first time since October 2007.Channel & Category BreakdownBreaking down the September sales by store channel, chain store sales totaled $174M, gaining 6% in units and 4% in dollars compared to the same month last year.
Independent outdoor specialty stores sold $111M, a 5% decline from September 2007. Unit sales also dropped 5% for the period. Outdoor internet merchants were not slowed down by the economy at all.
In September, the entire outdoor internet channel brought in $67M, increasing sales by 20% in units and 11% in dollars compared to September 2007. Similar to findings in other industries, core outdoor shoppers seemed reluctant to buy big-ticket items such as tents, sleeping bags, packs, instruments and sport racks.
However, lower-priced camping equipment accessory categories gained 15% in units and 8% in dollars helping buoy overall outdoor sales.Apparel and footwear were mixed, with outwear and sportswear remaining flat, boots and shoes made modest gains and sandals declined.Following the accessory trend, apparel and footwear accessories saw healthy increases compared to last September.
Look for accessories and small-ticket items to gain traction in a soft economy. PaddlesportsAll paddle product sales from all three channels (specialty, chain, internet) totaled $26M in September, down 13% from September 2007. Unit sales decreased 8% for the same period. Paddle specialty stores had sales of $20M this month, suffering a 17% decline in units and a 15% decline in dollars. Total chain paddlesport sales reached $4.5M, down 3% from September 2007.
The internet channel saw September sales increase 14% in units but decrease 7% in dollars with $1.8M in total sales.
Year-to-date, all paddlesport sales from all three channels totaled $327M, down 1% from the same period in 2007.Big-ticket paddlesport items saw the largest declines in September. Boats and paddles lost sales in each of the three distribution channels, while accessories and apparel saw sales increase in chain and internet stores.
August & September Sales CombinedSeptember sales numbers alone miss a key factor in sales growth. A large portion of revenue in August and September occurs during the traditional Labor Day Sales. In 2007, Labor Day Sales were mostly counted in September, while this year’s sales gave August the boost because of the calendar.
Looking at August and September together, all products in all stores grew 8% in units and 7% in dollars. Equipment increased 6% and 5% in units and dollars, respectively. Equipment accessories grew 16% and 13% respectively and apparel grew 5% and 4%. Footwear dropped 10% in units but grew 5% in dollars
2008 Retail Container Traffic to be Lowest Since 2004
WASHINGTON – Cargo volume at the nation’s major retail container ports fell again in October, and 2008 is now expected to be the slowest year since 2004 as the downturn in the nation’s economy continues, according to the monthly Port Tracker report released today by the National Retail Federation and IHS Global Insight.Volume is projected to total 15.3 million Twenty-Foot-Equivalent Units for the year, compared with 16.5 million TEU in 2007.
That would be a decline of 7.1 percent and the lowest total since 2004, when 14 million TEU moved through the ports. The estimate is down from the 15.43 million projected a month ago, which would have been a 6.5 percent decline from 2007 and the lowest number since 2005’s 15.4 million TEU.
One TEU is one 20-foot container or its equivalent.“Retail sales forecasts this year are the lowest they’ve been in more than half a decade, and the cargo volume we’re seeing reflects those numbers,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said.
“The balancing act between supply and demand is tougher than ever because retailers want to make sure they have enough merchandise on the shelves to satisfy customers and not be forced into unplanned markdowns to move excess inventory once the holidays are over.”
U.S. ports surveyed handled 1.33 million TEU in September, the most recent month for which actual numbers are available. The number was down 2.9 percent from August and 9.8 percent from September 2007. October was estimated at 1.36 million TEU, down 5.7 percent from a year ago.
If estimates hold true, October will have been the peak shipping month for 2008 but will have fallen significantly short of the 2007 peak of 1.48 million TEU set last September.November is forecast at 1.26 million TEU, down 8.7 percent, and December is forecast at 1.21 million TEU, down 5.5 percent.
January 2009 is forecast at 1.17 million TEU, down 5 percent, and February – traditionally the slowest month of the year – is forecast at 1.12 million TEU, down 8.3 percent. The first year-over-year increase in months is expected in March, which is forecast at 1.18 million TEU, a 2.3 percent increase from March 2008.
Meanwhile, Port Tracker’s congestion rating for the Ports of Los Angeles and Long Beach – the nation’s two largest retail container ports – continues at medium because collection of fees for the new Clean Truck Program there begins this month.
“The October startup of the Clean Truck Program regulations did not cause the disruptions we had been concerned about, but collection of fees for the program begins this month and it is not clear that all trucks will be ready,” IHS Global Insight Economist Paul Bingham said. “
Despite that, weak import demand has reduced pressure for port truck drivers, so capacity should be adequate.”The remainder of the U.S. ports covered by Port Tracker – Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Hampton Roads, Charleston and Savannah on the East Coast, and Houston on the Gulf Coast – are rated “low” for congestion, the same as last month.
Port Tracker, which is produced by the economic research, forecasting and analysis firm IHS Global Insight for NRF, looks at inbound container volume, the availability of trucks and railroad cars to move cargo out of the ports, labor conditions and other factors that affect cargo movement and congestion. The report is free to NRF retail members.
That would be a decline of 7.1 percent and the lowest total since 2004, when 14 million TEU moved through the ports. The estimate is down from the 15.43 million projected a month ago, which would have been a 6.5 percent decline from 2007 and the lowest number since 2005’s 15.4 million TEU.
One TEU is one 20-foot container or its equivalent.“Retail sales forecasts this year are the lowest they’ve been in more than half a decade, and the cargo volume we’re seeing reflects those numbers,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said.
“The balancing act between supply and demand is tougher than ever because retailers want to make sure they have enough merchandise on the shelves to satisfy customers and not be forced into unplanned markdowns to move excess inventory once the holidays are over.”
U.S. ports surveyed handled 1.33 million TEU in September, the most recent month for which actual numbers are available. The number was down 2.9 percent from August and 9.8 percent from September 2007. October was estimated at 1.36 million TEU, down 5.7 percent from a year ago.
If estimates hold true, October will have been the peak shipping month for 2008 but will have fallen significantly short of the 2007 peak of 1.48 million TEU set last September.November is forecast at 1.26 million TEU, down 8.7 percent, and December is forecast at 1.21 million TEU, down 5.5 percent.
January 2009 is forecast at 1.17 million TEU, down 5 percent, and February – traditionally the slowest month of the year – is forecast at 1.12 million TEU, down 8.3 percent. The first year-over-year increase in months is expected in March, which is forecast at 1.18 million TEU, a 2.3 percent increase from March 2008.
Meanwhile, Port Tracker’s congestion rating for the Ports of Los Angeles and Long Beach – the nation’s two largest retail container ports – continues at medium because collection of fees for the new Clean Truck Program there begins this month.
“The October startup of the Clean Truck Program regulations did not cause the disruptions we had been concerned about, but collection of fees for the program begins this month and it is not clear that all trucks will be ready,” IHS Global Insight Economist Paul Bingham said. “
Despite that, weak import demand has reduced pressure for port truck drivers, so capacity should be adequate.”The remainder of the U.S. ports covered by Port Tracker – Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Hampton Roads, Charleston and Savannah on the East Coast, and Houston on the Gulf Coast – are rated “low” for congestion, the same as last month.
Port Tracker, which is produced by the economic research, forecasting and analysis firm IHS Global Insight for NRF, looks at inbound container volume, the availability of trucks and railroad cars to move cargo out of the ports, labor conditions and other factors that affect cargo movement and congestion. The report is free to NRF retail members.
Managing your retail business for stability in a tumultuous economy
And the hits just keep on coming. Consumer Reports just released a report that finds 76 percent of consumers will be cutting back on their holiday spending (click here to read). Outdoor Industry Association reports outdoor retailer sales, long argued to be recession-proof, are now taking lumps, too (click here to read). And, the National Retail Federation issued a November report that showed cargo volume at major U.S. retail container ports fell again in October and hit their lowest levels since 2004 (click here to read).
In an email notice to his retail clients, Pruitt wrote, "Business may be down by 30 percent, but remember, 70 percent of customers are still shopping. Keep your focus on these customers." Which is very good advice, considering that Pruitt sees the economic downturn lasting well into 2009. "We actually started seeing a retail slowdown starting during the April/May period of 2007. Typically, these cycles last 18 to 20 months, which meant we were anticipating a rebound just in time for the holidays this year," Pruitt told us. "But five weeks ago, the dream of a holiday rebound was shattered with further financial unraveling that was unprecedented, meaning we are in a double dip -- back into another 18- to 20-month cycle of slowing retail trends.
"Pruitt said he hopes that this second cycle will last less than the typical 18 to 20 months, shortening to 12 months, but he admits everyone is in uncharted territory now. He did point out bright spots and opportunities, though. Retailers with strong vendor relationships have been able to work with those companies to discount in-stock merchandise, trim or cancel existing orders, and work to extend terms. Of course, vendors are also feeling the economic pinch, so their support can and will continue only for so long. The most important steps a retailer can take immediately are:
Minimize excess inventory risk now. While the holidays may generate a small sales lift, immediately following the holidays, business will likely slow as everyone tries to liquidate inventory.
Adjust your merchandising style. With the inventory you do have, work to flow it onto the floor and onto shelves in smaller amounts to keep your store looking fresh with new inventory. It will give those consumers who are still shopping a reason to keep checking back in.
Get a handle on inventory. Have a very good understanding of how much inventory you now own, and how much you will need in the future. You have to be able to maintain sufficient inventory on hand to be able to buy into margin on a consistent basis. It used to be that 10-percent open-to-buy levels were sufficient. The new rule of thumb is 25 percent.
Be realistic with your inventory management. Once you determine what your reasonable sales targets will be, and how much inventory you will need to achieve those targets, plan down, not up from there. Be conservative!
Be flexible and responsive. Where it may have been traditional to manage retail inventory in terms of monthly performance levels, in this economic climate, retailers need to shift to weekly reviews of inventory levels and manage accordingly.
Keep expenses in check. This is perhaps the most challenging aspect for smaller retailers who do not enjoy the capital backing of larger or public companies. When sales start dropping quickly, it is very difficult to push expenses down fast enough to compensate and doing so without the proper strategy can put a company at risk simply because it is eating the bottom out of its business.
Grow your gross profit dollars. One way to ensure cash flow that will keep a retail business healthy even in a depressed sales market is to ensure you are able to create more gross profit dollars by building higher initial markups and minimizing your inventory markdowns. As a guide, Pruitt has developed a formula: "For every one point of additional maintained markup (M/M), you will need to increase your in-season open-to-buy (OTB) by 5 points. So, if you want to increase your M/M by 5 percent, you need to increase your in-season OTB by 25 percent to be able to execute your plan, going after off-priced and immediate buys."
Pruitt pointed out that there are huge opportunities for stronger businesses in this economic climate, but retailers need to be sure they are positioned to take advantage of those opportunities as they come along. And, he adds, the opportunities are going to be coming fast and furious in the form of distressed merchandise, bankruptcies and more. It is also a great time to negotiate leases at low rates and build out stores at a much lower cost. He said he believes these opportunities will last for another year.
In an email notice to his retail clients, Pruitt wrote, "Business may be down by 30 percent, but remember, 70 percent of customers are still shopping. Keep your focus on these customers." Which is very good advice, considering that Pruitt sees the economic downturn lasting well into 2009. "We actually started seeing a retail slowdown starting during the April/May period of 2007. Typically, these cycles last 18 to 20 months, which meant we were anticipating a rebound just in time for the holidays this year," Pruitt told us. "But five weeks ago, the dream of a holiday rebound was shattered with further financial unraveling that was unprecedented, meaning we are in a double dip -- back into another 18- to 20-month cycle of slowing retail trends.
"Pruitt said he hopes that this second cycle will last less than the typical 18 to 20 months, shortening to 12 months, but he admits everyone is in uncharted territory now. He did point out bright spots and opportunities, though. Retailers with strong vendor relationships have been able to work with those companies to discount in-stock merchandise, trim or cancel existing orders, and work to extend terms. Of course, vendors are also feeling the economic pinch, so their support can and will continue only for so long. The most important steps a retailer can take immediately are:
Minimize excess inventory risk now. While the holidays may generate a small sales lift, immediately following the holidays, business will likely slow as everyone tries to liquidate inventory.
Adjust your merchandising style. With the inventory you do have, work to flow it onto the floor and onto shelves in smaller amounts to keep your store looking fresh with new inventory. It will give those consumers who are still shopping a reason to keep checking back in.
Get a handle on inventory. Have a very good understanding of how much inventory you now own, and how much you will need in the future. You have to be able to maintain sufficient inventory on hand to be able to buy into margin on a consistent basis. It used to be that 10-percent open-to-buy levels were sufficient. The new rule of thumb is 25 percent.
Be realistic with your inventory management. Once you determine what your reasonable sales targets will be, and how much inventory you will need to achieve those targets, plan down, not up from there. Be conservative!
Be flexible and responsive. Where it may have been traditional to manage retail inventory in terms of monthly performance levels, in this economic climate, retailers need to shift to weekly reviews of inventory levels and manage accordingly.
Keep expenses in check. This is perhaps the most challenging aspect for smaller retailers who do not enjoy the capital backing of larger or public companies. When sales start dropping quickly, it is very difficult to push expenses down fast enough to compensate and doing so without the proper strategy can put a company at risk simply because it is eating the bottom out of its business.
Grow your gross profit dollars. One way to ensure cash flow that will keep a retail business healthy even in a depressed sales market is to ensure you are able to create more gross profit dollars by building higher initial markups and minimizing your inventory markdowns. As a guide, Pruitt has developed a formula: "For every one point of additional maintained markup (M/M), you will need to increase your in-season open-to-buy (OTB) by 5 points. So, if you want to increase your M/M by 5 percent, you need to increase your in-season OTB by 25 percent to be able to execute your plan, going after off-priced and immediate buys."
Pruitt pointed out that there are huge opportunities for stronger businesses in this economic climate, but retailers need to be sure they are positioned to take advantage of those opportunities as they come along. And, he adds, the opportunities are going to be coming fast and furious in the form of distressed merchandise, bankruptcies and more. It is also a great time to negotiate leases at low rates and build out stores at a much lower cost. He said he believes these opportunities will last for another year.
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