Target Corp. reported that December same-store sales will below an expected three-to-five percent increase, despite the fact that last week’s sales were above expectations. Last week’s strength reportedly came from pharmacy, entertainment, toys and consumable products.
Post-Christmas sales are expected to be sluggish in virtually every retail segment, ranging from discounter Wal-Mart to upscale federated Department Stores. A story from Reuters suggested that one of the few retailers that is doing well is JC Penney, as aggressive advertising and price promotions seem to be attracting shoppers.
Unified Western Grocers delayed filing its annual report with the US Securities and Exchange Commission (SEC). The wholesaler, which is getting out of the retail business, reportedly needs more time to go through a “quasi-reorganization” before filing the report, which is now expected to be ready on January 13, 2003.
The real estate investment firm Archon Group is looking to acquire 15 former Albertsons stores in San Antonio. Albertsons closed 23 stores there earlier this year, of which five were picked up by HEB.
A USAToday/CNN/Gallup poll reveals that while Americans say they are financially worse off now than they were a year ago, there is at least a modest expectation that a year from now, things will be better. Whereas in 1999 and 2000 people were financially better off than the year before by a wide margin, and last year it was even money between those who were better off and those who were worse off, this year 44 percent of respondents said they were worse off, while just 33 percent said they were better off.
On the other hand, just percent of those polled said they expected to be worse off next year at this time, while 61 percent believed that they will be in better shape financially. Of course, these numbers aren’t as positive as in the past three years, when 12 percent (1999), 15 percent (2000) and 14 percent (2001) of respondents said they believed they would be worse off, and close to seven out of ten people believed they’d be better off.
Other interesting numbers from a variety of polls quoted in the USAToday story:
• About 1.7 million people have been out of work for six months or longer, the highest number since 1994; stock losses topped $2.6 trillion, an all-time high.
• The US Census Bureau says that the number of Americans in poverty rose in 2001 by 1.3 million, to 32.9 million, and no doubt climbed again this year.
• The number of people without health insurance jumped 1.4 million from 2000 to 2001 to 41.2 million; 14.6 percent of the population had no health insurance coverage during all of 2001, up from 14.2 percent in 2000.
• More than a million employees lost their jobs in 2002.
• About 35 percent of workers plan to change jobs in 2003, according to a poll by CareerBuilder.com. And more than half of college students say it's likely they will someday start their own businesses or work for themselves, according to a 2001 Harris Poll.
• Nearly 70 percent of workers say family is their top priority now, up from 54% in 2000. People saying work is a top priority dropped from 27 percent to 25 percent this year.
The numbers simply don’t look good going into 2003, and retailers will have to adjust their sights, their strategies and their expectations to deal with many consumers’ diminished ability to buy. The old saw that food is recession-proof simply doesn’t work anymore, especially because there is so much competition fighting over the same dollars.
This doesn’t necessarily mean that everyone has to compete with Wal-Mart on price. It does mean that there has to be some truly original thinking about what comprises “value,” with commitments and investments made in a new approach to customer service and consumer services.
Never before has the customer been as important, required as much, and even offered as much opportunity to the right-thinking retailer. It’s just that figuring out how to put the puzzle together correctly takes a whole different level of intelligence and instinct than ever before.