Bucking the Downward Trend
With a few exceptions, August results were generally in line with the six-month trend. The past quarter’s results were influenced by the government rebate checks and, therefore, not reflective of the actual environment.
As always, some companies continue to be unaffected by the slowdown. It is particularly interesting to see the broad range of retailers, in a broad rage of segments, with improving trends:
Opening price: Family Dollar, Wal-Mart, Dollar Tree
Warehouse: Costco, BJ’s, Sam’s
Specialty: Aeropostale, Buckle, Guess, Jos. A. Bank, Urban Outfitters
Shoes: Almost all companies
Others: Big Lots, Jo-Ann, Cost Plus, Radio Shack, Game Stop, Hibbett, Kroger
#b#Retail Trend Tracker
The Gordman Group, Back-to-School RTT, a study of 500 consumers nationwide, provides some interesting data. (See the charts below.) Retail is always a business of churning customers. While all retailers have a base of core customers who love what they do and are loyal, they have many more who are infrequent and only shop occasionally.
The following charts generally mirror the reported August results. Wal-Mart Stores and Internet retailers are doing the best job attracting more infrequent customers than they are losing. While price is clearly a factor, having what the customer wants, being in-stock, and having a convenient location are primary drivers of additional sales. The 80% of the customers who reported spending more at Wal-Mart for school shopping because it is convenient is almost equal to the 86% who mentioned price.
#b#Consumers Look Ahead
It appears consumers plan to be a bit more conservative in their spending during the next few months but then get back to a normal spending pattern for the holiday season. As always, intentions to spend can be significantly influenced by factors that affect consumer confidence. Hopefully, we have seen the bottom of the cycle and it’s up from here.
Robert Gordman is the president of The Gordman Group, Breckenridge, Colo., and is the author of “Secrets of the Super Sweet Spot.”