Author: Helen Thomas

In an era when e-commerce is growing and chains like Kohl’s, Macy’s and Staples are closing stores, Dollar General is expanding. At it’s annual investor day last Thursday, the discount chain announced it will open 900 new stores this year and plans to open another 1,000 in 2017. Adding 1,900 new stores will bring Dollar General’s store count to over 14,000.

Last year was Dollar General’s 26^th straight year of same-store sales growth and they have added new stores consistently for the past 8 years, growing from 8,362 locations is 2008 to nearly 12,500 by the end of 2015.

In the late 2000’s, as the economy rebounded from the recession, deep discount retailers like Dollar General, Dollar Tree and Family Dollar exploded in popularity as consumers sought discounted items at no-frills stores located close to home so they could save on gas. Consumer’s frugal spending habits have continued and Dollar General is targeting annual sales growth of 7% to 10%.

Source: Fortune.com

Despite an expected snow storm in the mid-Atlantic States and New England, consumer spending and apparel sales should both rise as the weather improves, according to analytics firm Planalytics. In its weekly report, Planalytics said that warmer weather is resulting in “many consumers thinking and purchasing spring. The warming conditions during the Easter run-up period will help drive demand for seasonal apparel as well as live goods.” Looking ahead, the analytics firm said, “western locations can expect strong gains for both spring apparel and consumables.

Last week, the warmer weather already had an impact on retail sales – but not in all regions. Chief economist of the Retail Economist LLC,  Michael Niemira said spring-like “weather continued to drive interest in spring clothing in the east over the past week, but cool and wet weather in the west curtained demand.” Easter sales are getting a slight boost due to the holiday falling early in the season this year.

Looking ahead, Planalytics said that businesses throughout North America can expect above normal temperatures in most markets over Easter weekend. “Sandals, short sleeve shirts, cold beverages and sun care will be in demand as temperatures rise above normal,” researchers said.

Source: planalytics.com

Last year, Wall Street firm Cowen & Co. famously predicted that Macy’s would be be dethroned by Amazon.com as the top apparel retailer in the U.S. But Macy’s CEO Terry Lundgren believes that Macy’s nearly 800 stores offer a huge advantage over Amazon. He noted that shoppers typically order multiple sizes of the same piece of clothing, keep the one that fits, and send the rest back.

According to a Cowen research report published in July, Amazon’s apparel business was on pace to hit $16.34 billion for the year, compared to $22.2 billion for Macy’s in 2015. But as Amazon pushes further into fashion beyond basic clothing, it could get dinged by all that merchandise being sent back.

“They’re going to have an interesting challenge when they start getting all those returns coming back online,” said Lundgren. He added, “The large, large majority of online purchases which are returned in our case come back to stores because they’re so convenient. And so we at least have a shot at selling them something else.”

Despite closing 36 stores this year, Macy’s is now the fourth largest U.S. internet retailer according to eMarketer, with annual online sales in 2015 of about $5 billion. Their position as a leader in the online market is a result of years of multi-billion dollar investments in integrating its stores and its digital business. The ability to handle returns of online orders is key to generating traffic to stores.

Source: Fortune.com

With two big spring holidays upon us in March, the National Retail Federation reports that consumer spending appears to be on the rise. The NRF conducted two consumer surveys that indicate that trend is coming. According to its annual St. Patrick’s Day Spending Survey, over 125 million Americans will spend $4.4 billion on today’s holiday. 56.5% of those celebrating will purchase food and beverages, 28% will buy apparel or accessories, 23.3% will buy decorations and 17.2% will buy candy.

According to the NRF Easter Spending Survey, consumers plan to shop at 13-year high levels. The holiday is expected to reach spending of $17.3 billion. Half of that spending will be on clothing, gifts and flowers. “Retailers are beginning one of their busiest times of year and are more than ready as consumers shop for Spring essentials, “NRF President and CEO Matthew Shay said.

58.4% of shoppers will head to discount stores, followed by 41.4% in department stores. Online shoppers grows to 21.4%, up from 18.8% last year.

Source: National Retail Federation

It seems that sporting goods retailers are in a slump. Last week The Sports Authority filed for bankruptcy and said it will close nearly a third of it’s 450 stores over the next three months. It ha not yet been disclosed which stores will close. Bankruptcy has been looming since January when the retailer disclosed that it had missed a $20 million debt payment.

Earlier this week, Performance Sports Group Ltd., one of the biggest makers of baseball bats and other sporting equipment slashed their 2016 fiscal year forecast. The company expects to report revenues of approximately $125 million, or 9% lower compared to the same quarter last year. Shares of Performance Sports fell 65% to about $4.00 in trading on Tuesday.

“The second half of fiscal 2016 has been impacted by adverse market conditions and related customer credit issues,” said Kevin Davis, CEO, Performance Sports Group. “The baseball/softball market is experiencing an unexpected significant downturn in retail sales, including in our important bat category. This weakening of consumer demand, coupled with the chapter 11 filing by one of the largest U.S. national sporting goods retailers, is reducing our sales for baseball and softball products.”

Also this week, Dick’s Sporting Goods Inc. reported weak holiday results, with both fourth quarter and full-year same-store sales declining. Despite the decline in profits, Dick’s announced ambitious store expansion plans in 2016 and points to the success of their e-commerce business. The company ended the year with e-commerce penetration at a record 15.7% of sales, compared to 14.4% in the fourth quarter of 2015.

“This is certainly a unique time in the industry. The competitive landscape is evolving, which is creating pressure for some and opportunities for others,” said Dick’s CEO Edward Stack.

Amazon.com opened its first brick-and-mortar store in Seattle in November, and announced plans to open another store in San Diego. Macy’s announced it is shutting down almost 40 stores this year. Kohl’s plans to follow suit and close 18 stores, stating its online sales increased 30% in the fourth quarter, causing their reevaluation of its store footprint. Similar announcements of closing stores were also made by Sears, JC Penney and The Gap, as 8% of total US retail sales are now online.

Companies that began their retail lives online, such as Athleta, Fabletics and Birchbox are now adding brick-and-mortar stores. They are moving into prime real estate that was once reserved for top-performing retail stores, such as Birchbox opening its first store in Manhattan.

Is this the new evolution of retail, blending the two worlds? Experts say the trend will continue to grow. The impact will be different in each retail category, such as electronics versus clothing. “For most products, consumers actually prefer to shop in store because they want to see and touch what they’re buying,” said Dave Parro, vice president of the retail technology practice at Walker Sands, a PR marketing firm. “But they also shop online regularly because of the convenience and range of products available.”

The winners of the switcheroo? The consumer. Those who are omni-shoppers know which retail channel and retailer is best to fit their needs.

Source: Philly.com, WSJ

The NRF (National Retail Federation) commented on the Labor Department’s report that retail employment (excluding gasoline stations, automobiles and restaurants) was up 51,100 jobs in February. Compared with February 2015, retail jobs were up by 247,300. Apparel stores saw a significant gain of 11,100 jobs. The NRF noted that weather played a big part of the increase.

“Weather has a serious impact on the retail industry, and when cold winter weather finally made its appearance shoppers headed to stores and brought shopping patterns to a good level,” said National Retail Federation chief economist Jack Kleinhenz said. “This solid report shows that the consumer is confident and continuing to shop.”

Source: Retailing Today

According to data from Chain Store Guide’s Consumer Spending Report, the month of March is likely to see a slowdown in consumer spending. While current economic reports are varied, the unpredictable stock market and upcoming elections have likely created unease among consumers.

When polled on the state of the U.S. economy, nearly 30% of those asked would rate the economy as “Poor” compared to only about 25% the previous month.  The data did, however, reveal some positive trends as well.  Notably, 80% of consumers polled reported personal finances as either “excellent”, “good” or “fair”. And, all three of CSG’s indexes – US Spending Monitor, Restaurant Spending Monitor and Retail Spending Index – are close to their 12-month averages.

Source: Chain Store Guide

Last Thursday, J.C. Penney announced impressive increases in same-store sales and earnings, as well as a new marketing campaign called Penney Days.

For the fourth quarter ending on January 30th, the retailer announced that same store sales grew 4.1% . “We are very pleased with our performance for the fourth quarter and full year. Our focus on private brands, omni-channel and revenue per customer is clearly resonating as we continue to win market share in a competitive environment,” said Marvin R. Ellison, CEO. “We are also pleased that we delivered strong fourth quarter results while effectively managing our inventory, which finished the year up 2.6 %. I would like to thank our over 100,000 associates who embrace our strategy and come to work each day focused on driving sales and providing excellent customer service.”

They also announced a new promotional event called Penney Days. At different times throughout the year they will make limited number of some of their highest rated private brand items available for one cent. The new campaign will give J.C. Penney the opportunity to showcase the company’s assortment of private brands and it will give customers the opportunity to try them for just a penny.  J.C. Penney will promote Penney Days through television spots, weekly sales circulars and digital marketing. They will also launch a social media campaign reminding users of the power of a penny and will promote the hashtag “#SoWorthIt” with all elements of the campaign.