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Data Advance October 2008 Retail Sales i Released November 14, 2008
Need vs. Want Products by 22%, further points to changes in the This trend continued overall as Food
Dominate Consumer Behavior music industry, as retailers strive to Services and Drinking Places fared
remain profitable. well; sales grew 5.3% in October.
Consumer confidence dropped sharply
from 60 points in September to 38, Clothing and Accessories Stores grew In the wake of multiple bankruptcies
reflecting the current volatility and 0.6% year-to-date, but was down for the and government indecision on
pessimism. month by -3.0%. GAP reported -16% bailouts, consumers have been
and Limited Brands announced -9% seeking bargains, limiting credit use
All Stores sales dropped -3.3% in declines in monthly same-store sales. and tightening their belts. Despite
October. The hardest-hit sector was this downward spiral, consumer
Motor Vehicle and Parts Dealers whose General Merchandise Stores were up behavior will be ambiguous at best
sales declined further this month by 3.5% in October with Walmart into the coming months. Retailers
-23.3%. reporting a 2.4% growth in sales. As will need to take strategic steps to
shoppers head to discount retailers, counter the ‘gloom and doom’
Categories highly dependent on Department Stores felt the punch as scenarios projected throughout Wall
consumer financing saw big declines in their sales dropped -5.3% for the month. Street, election platforms, and the
sales. Of these, Furniture and Home This was clearly reflected in the same- media.
Furnishing Stores decreased by -13.2%. store, monthly sales for Macy’s and
News of Circuit City’s impending Nordstrom’s which declined by -6.3% This special edition of the National
bankruptcy foreshadowed deteriorating and -5.8% respectively. Retail Bulletin includes a supplement
sales in the Electronics and Appliance to help retailers regain their ground
Stores, which was down -5.7% for the As consumers continue to smart-shop and stay successful, into the holiday
month. As consumer shopping and focus on need-purchases, retailers season and beyond.
behaviors shift from credit to debit card like Aldi’s are the clear winners.
use, consumers are estimated to Overall Food and Beverage Stores Release Date of the Next
purchase 13% more on debit cards. experienced a 6.7% growth in sales National Retail Bulletin:
These decreases in consumer financing while Grocery Store sales were up, December 12, 2008
and usage can continue to affect retail 6.4%. Health and Personal Care Stores
sales and expectations. also rose, by 4.2% for the month.
McDonald’s Corp. reported 5.3%
Retailers selling ‘want’ products growth in October for its U.S. locations.
weathered a gloomy month. Sporting
Goods, Hobby, Book and Music Stores Please note:
dipped by -3.4% in October with year- The J.C. Williams Group National Retail Bulletin compares the latest monthly release of “raw” (i.e.,
to-date sales growth remaining weak at unadjusted for seasonality, holiday, and trading day) retail sales figures to those in the same calendar
month of the previous year. The U.S. Census Bureau also reports seasonally adjusted sales that are
2.2%. Music stores may account for a compared to the previous month within the current calendar year to measure change in Gross Domestic
significant portion of the declining sales Product (GDP). Although other sources use seasonally adjusted figures, J.C. Williams Group believes
as the industry continues to struggle that using raw figures and making comparisons to the previous year’s performance more accurately
reflects the seasonality of the retail industry, and therefore, are more useful in analysis. Definitions can
with a morphing sector. Wal-Mart’s be found on the U.S. Census Website: www.census.gov.
plans, to cut prices on “Top 25” tunes
350 West Hubbard St. Ste. 240, Chicago, Il. 60654 Tel: (312) 673-1254 Fax: (312) 822-9162 Website: www.jcwg.com
For more information, please contact Jim Okamura at (312) 673-1254, John Archer (416) 921-4181, or e-mail info@jcwg.com
RETAIL SUCCESS IN TOUGH TIMES
NRB SUPPLEMENT
U.S. DATA - RELEASED NOVEMBER 14, 2008
Retail Success In Tough Times It is important to remember that not all The Customer
commodities are affected in the same The North American consumer is very
You would have to be living on a desert way. For example, general merchandise nervous right now. Just look at
island to not have read about the and food are holding up, while consumer confidence. However
challenging economy and consumers’ automotive and home/furniture are different consumers will react
reaction to it. In this special issue of the getting hit. It is also clear that some differently so make sure you know your
National Retail Bulletin, we would like retailers like Wal-Mart are doing very customers’ key concerns. What are they
to add our voices to the many that you well in this climate, others are suffering thinking? How can you make their
may have already heard first to bring badly. Each retailer must look at their lives easier? If you take the position of
some reality to the retail picture business model carefully to really assess the customer advocate, helping them to
including the data that was just released what the challenges are now and what deal with their fears, you will win out
today and second to present some of the they will be over the next year. over your competitors.
thinking and actions that we believe
will help retailers achieve success in Another key element to consider is The Store
tough times. consumer confidence which has Stores are retailers’ most visible
dropped dramatically since July 2007 presence, so making the most of these
The Facts and Outlook when it was above 110 and now stands assets is critical. Smart retailers will be
This month retail sales dropped below at 38. While this measure is obviously editing tactics by region and store to
those of November 2007 by 3.3% and affected by real issues such as job losses maximize customer satisfaction and
have been getting progressively worse and decreases in the stock market, even success. Implement in-store tactics for
over the year. In the first quarter, total consumers who are in good shape are increasing traffic, increasing sales per
sales grew at 3.8% over Q1 2007 with concerned about debt and spending customer and creating loyalty. The GAP
GAFO growing at 2.8%, and Food money. This has led to a new thriftiness has cut television spend but will
Stores increasing by 6.5%. Drug stores, that is shaping customers’ shopping concentrate on in-store marketing.
consumer electronics retailers, and behavior. Stores like Coach and Borders are
sporting goods/hobby/books all gained implementing creative displays to put
over 4% from the year before. Retailer’s Response shoppers in the holiday mood.
In these times, retailers can either shape
This month, we can look at the revised their future or let the events push them Value
third quarter numbers as well as the into a place that they do not want to be. All customers, not just the ones that are
October advance release. These Q3 It is clear that all businesses will be cash strapped, will be looking for value.
numbers show that retail sales grew at looking carefully at all spending and This does not mean cutting prices.
2.5% over last year with food and drug cutting back where they can save the Think about what worked in the past.
stores as well as consumer electronics most without affecting their core Stores like TJX and Kmart are bringing
all performing relatively well compared business. Smart retailers will not risk
to the first quarter. However, the abandoning a previously successful
discretionary purchases in categories strategy because of the need to make
like sporting goods/hobby/books were short term cuts. Here is our roadmap to
eroding. October they dropped below navigating these challenging times.
last year’s sales.
350 West Hubbard St. Ste. 240, Chicago, Il. 60654 Tel: (312) 673-1254 Fax: (312) 822-9162 Website: www.jcwg.com
For more information, please contact Jim Okamura at (312) 673-1254, John Archer (416) 921-4181, or e-mail info@jcwg.com
back layaways so that customers can get Online Retailer Checklist
what they want but not use their credit
cards. Another “blast from the past” are
Non-travel sales online grew 21% last
year and are expected to slow down but
□ Recognize value is more than
coupons. Customers will be looking for price
grow between 6% and 10% over the
coupons from retailers as well as from holiday period. Clearly this is an area □ Fine-tune tactics by region and
suppliers. Be ready. that requires special attention. While store
350 West Hubbard St. Ste. 240, Chicago, Il. 60654 Tel: (312) 673-1254 Fax: (312) 822-9162 Website: www.jcwg.com
For more information, please contact Jim Okamura at (312) 673-1254, John Archer (416) 921-4181, or e-mail info@jcwg.com
NATIONAL RETAIL BULLETIN Release Date: 14/11/08
Source: US Census Bureau. All Values are expressed in millions of US dollars and are not seasonally adjusted
350 West Hubbard St. Ste 240, Chicago, Il. 60610 Tel: (312) 673-1254 Fax: (312) 822-9162 Website: www.jcwg.com
For more info, please contact Jim Okamura at (312) 673-1254, John Archer at (416) 921-4181, or e-mail info@jcwg.com
NATIONAL RETAIL BULLETIN Release Date: 14/11/08
Source: US Census Bureau. All Values are expressed in millions of US dollars and are not seasonally adjusted
350 West Hubbard St. Ste 240, Chicago, Il. 60610 Tel: (312) 673-1254 Fax: (312) 822-9162 Website: www.jcwg.com
For more info, please contact Jim Okamura at (312) 673-1254, John Archer at (416) 921-4181, or e-mail info@jcwg.com
NATIONAL RETAIL BULLETIN Release Date: 14/11/08
U.S. Consumer
Confidence Index
120
110
100
90
80
70
60
50
40
30
Aug…
Aug…
Aug…
Aug…
Aug…
Nov…
Feb-…
May…
Nov…
Feb-…
May…
Nov…
Feb-…
May…
Nov…
Feb-…
May…
Nov…
Feb-…
May…
Nov…
Source: U.S. Conference Board
May-08
Nov-06
Feb-07
Mar-07
Apr-07
Aug-07
Nov-07
Feb-08
Aug-08
Jul-07
Mar-08
Apr-08
Jul-08
Oct-06
Dec-06
Jan-07
Sep-07
Oct-07
Dec-07
Jan-08
Sep-08
Jun-07
Jun-08
350 West Hubbard St. Ste 240, Chicago, Il. 60610 Tel: (312) 673-1254 Fax: (312) 822-9162 Website: www.jcwg.com
For more info, please contact Jim Okamura at (312) 673-1254, John Archer at (416) 921-4181, or e-mail info@jcwg.com