Archive for November, 2011

Black Friday Sets Sales Record

by Elaine Misonzhnik November 28th, 2011

The holiday shopping season is off to a great start as sales for 2011 Black Friday weekend came in at a record-setting $52.4 billion. The National Retail Federation reports that 226 million people visited bricks-and-mortar stores and shopped online in the days after Thanksgiving, spending money on clothes (51.4 percent of shoppers), electronics (39.4 percent of shoppers) and home decor items (21.3 percent of shoppers.)

“Stuffed to the brim from their holiday meals and eager to shop, more consumers than ever turned out for retailers’ Black Friday promotions, a promising sign for the economic recovery,” said NRF President and CEO Matthew Shay. “After an historic holiday weekend, retailers know the holiday season is far from over and will continue to look for ways to excite holiday shoppers and build on the momentum we’ve seen thus far.”

Shopper Trak reports that during Friday alone shoppers spent $11.4 billion–the biggest dollar amount ever. Foot traffic during the day went up 5.1 percent over the traffic recorded last year.

Nevertheless, the blog RetailSails warns that Black Friday sales don’t always serve as an accurate predictor of how the entire holiday shopping season will play out. The blog points to 2008, when shoppers also spent a record amount of money over the Black Friday weekend, then tightened their purse strings for the rest of the year.

What’s more, The Big Picture warns that many of the sales figures were inflated by dubious counting measures. According to The Big Picture:

We actually have no idea just yet as to whether, and exactly how much, sales climbed. The data simply is not in yet. The most you can accurately say is, according to some foot traffic measurements, more people appeared to be in stores on Black Friday 2011 than in 2010.

Certainly, a lot of the sales this year, as during the previous few years, were driven by early openings and super promotions. Walmart, Target, Best Buy and Toys ‘R’ Us stores opened at midnight on Thursday, according to Business Insider, as did Mall of America. About 15,000 people showed up at the mall that night, the largest Black Friday crowd ever. Unseasonably warm weather also helped bring people into stores.

Large crowds and blockbluster deals, however, led to some ugly behavior by shoppers across the country. A woman shopping at a Walmart store in Los Angeles, for instance, used pepper spray to keep others away from the items she wanted to buy. In Michigan, a teenager was trampled on as she got caught in the rush to snag discounted electronics. In Alabama, police had to use a stun gun to subdue an unruly, intoxicated shopper. In yet another incident, a man was shot for refusing to hand over his family’s newly purchased loot to robbers.

The Business Insider has put together a list of videos chronicling multiple Black Friday scuffles.

The question for retail analysts today seems to be if we should pay more attention to the record-breaking sales volume, or to the desperation people are showing in the fight for discounted goods.

No Comments Related Topics: News, Research, Retail, Trends, Video |

World Trade Center Retail: Everything Old is New Again

by Elaine Misonzhnik November 22nd, 2011

It’s taken more than 10 years, but it looks like a comprehensive, detailed plan for new retail at the World Trade Center site has finally been established. The Architect’s Newspaper reports that three separate hubs, including an existing one at World Financial Center, would combine to form about 635,000 sq. ft. of retail space downtown.

The hubs, including 70,000 sq. ft. of retail at the Fulton Street Transit Station, 365,000 sq. ft. at the new World Trade Center and 200,000 sq. ft. at World Financial Center, will be connected by underground tunnels and pedestrian passageways.

Back in its heyday, the 400,000-sq.-ft. mall underneath the original World Trade Center was among the most profitable in the country. A press release from the Port Authority of New York & New Jersey outlines conditions at the mall in February 2001. At the time, the Port Authority expected sales at the complex to reach $900 per sq. ft. before the end of the year. With the residential renaissance that has taken place in the area in the decade since the terrorist attacks, the new retail hub is likely to be even more successful.

No Comments Related Topics: Development, News, Retail, Retail Real Estate |

Starbucks, McDonald’s Bent on Growth

by Elaine Misonzhnik November 11th, 2011

While next year might still bring a considerable number of store closures, at least two household name chains will contribute to new store openings. Starbucks has revealed plans to launch a new health and wellness concept in the first half of 2012. It has already bought a juice company called Evolution Fresh in preparation for the launch, planning to incorporate it into the concept.

Meanwhile, McDonald’s, which in recent years became Starbucks’ competitor in the war for Americans’ coffee dollars, announced it will step up both new store openings and store renovations worldwide in 2012.

When two of the largest restaurant chains in the U.S. want to expand, is that a sign that the future might not be as bleak as we may fear?

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Wal-Mart Opening Pop-Ups

by Elaine Misonzhnik November 8th, 2011

The world’s biggest retailer seems to be putting out all the stops lately to adapt to a new retail environment. Earlier this year, Wal-Mart launched its small-format Express stores, meant to allow the chain to enter urban markets with high barriers to entry and compete with supermarkets and drug stores on their own turf. Now, Retail & Consumer reports the retailer has opened two pop-up stores, measuring 1,000 sq. ft. and 3,000 sq. ft. at the Topanga Mall in West Los Angeles and at Horton Plaza in San Diego.

Wal-Mart has been quietly working on this initiative for some time, according to The New York Post. In part, this is an attempt to compete with Toys ‘R’ Us’ pop-up Express stores during the holiday shopping season since Wal-Mart’s pop-up units will concentrate on toys and electronics and will operate through December 31.

At the same time, it’s a testing ground used by Wal-Mart’s management to create more synergy between its bricks-and-mortar locations and its online sales, a strategy pioneered by Apple stores. According to a Wal-Mart spokesperson quoted by CSPnet.com:

“The store will display key holiday items such as toys, electronics, gaming and home theater. These items can be picked up at the Walmart.com store or nearest Walmart store via the Site to Store and Pick Up Today options. Products can also be delivered to customers’ homes via the standard shipping options currently available through Walmart.com. Customers will also have an opportunity to purchase a small selection of items at the store, mostly accessories.”

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Same-Store Sales Trend Lower in October

by Elaine Misonzhnik November 3rd, 2011

Worries about the state of the U.S. economy finally worked their way into same-store sales numbers in October, after several months of surprising stength.

Reuters reports that the U.S. same-store sales index rose only 3.5 percent during the previous month, more than a percentage point below expectations.

Even as the stock market rose, unemployment barely budged, and shoppers faced a barrage of scary headlines last month that gave them pause about spending, experts said.

“This uncertainty, the news changing every day, it causes a freeze,” said Wharton School professor Barbara Kahn.

ICSC also reported the slowest month since March 2011, with same-store sales growth of 3.7 percent. Apparel stores posted the worst results, with flat growth. Wholesale clubs performed the best, with growth of 9 percent during the month. Results in most other retail sectors fell below 5 percent.

ICSC’s results were based on a survey of 25 chain retailers.

Kantar Retail, which tallied 24 chains, mostly apparel and department stores, reported that its same-store sales index rose 3.9 percent. Like everyone else, Kantar attributed the lackluster results to consumers’ worries about the economy.

The blog Retail Sails also reported a 3.9 percent increase, based on its survey of 23 retail chains. According to Retail Sails:

Laggards in October included the usual suspect The Gap (-6%), who announced recently they would close roughly a quarter of their U.S. stores to focus on overseas growth, J.C. Penney (-2.6%) which continues to lose market share to Macy’s (+2.2%) and Kohl’s (+3.9%), Wet Seal (-9.7%) and Bon-Ton (-10.2%).

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Filene’s Basement to Liquidate

by Elaine Misonzhnik November 2nd, 2011

As the year winds down, the annual parade of retailers headed for bankruptcy and liquidation has begun. This morning, Syms Corp. announced it was filing for Chapter 11 protection for both itself and Filene’s, which became its subsidiary in 2009.

Syms plans to liquidate the remaining 21 Filene’s stores after the end of this holiday season. The company partly blames the current economic environment for the troubles the chains have faced.

In a statement, Syms chief executive Marcy Syms said that fierce competition, along with the “worst economic downturn in our lifetimes,” were among the reasons for the move.

Filene’s Basement has been in operation since 1908.

The liquidation of its stores will have a macro impact on the retail real estate sector, delivering more vacant space to an already strained market, and might also further complicate the redevelopment of the Downtown Crossing area in Boston.

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