As school bells ring, retailers start listening for sleigh bells
By Jessica WohlPosted 2012/08/19 at 9:02 am EDT
Aug. 19, 2012 (Reuters) ? U.S. retailers expect another solid showing this holiday season, as summertime surveys and shipments show that companies are placing big orders even as some remain cautious about the economy.
A report from the National Retail Federation showed that increases are expected in imports during August, September and October, critical months when chains get their merchandise from overseas in time to stock their holiday shelves.
Meanwhile, manufacturers and importers surveyed by Capital Business Credit showed "cautious optimism" for the 2012 holiday season, said Andrew Tananbaum, executive chairman of CBC, a non-bank lender for the retail sector.
Such upbeat takes suggest that retailers expect the upcoming winter holiday season could help them overcome what has been a somewhat muted back-to-school season. Retailers such as Walmart and Gap Inc
Some school-related buying has moved later into the year so the books are not yet closed on back-to-school.
"A lot of customers will wait until school starts, and they don't buy things until they absolutely have to," said Wal-Mart Stores Inc
Any dip in the economy can quickly take a toll on sales. In 2008, with the United States in a recession and rocked by news such as the bankruptcy of Lehman Brothers, holiday sales fell 4.4 percent. They did not rise again until 2010.
TRACKING SHIPMENTS
The November-December holiday season makes up the biggest chunk of U.S. sales all year, followed by back-to-school, and recent projections suggest retailers are stocking up.
"Retailers don't import merchandise unless they believe they can sell it, so import numbers are considered a good leading indicator of future sales," said J. Craig Shearman, NRF's vice president for government affairs public relations.
Year-over-year imports are forecast to rise 6.3 percent in August, 7.3 percent in September and 13.2 percent in October according to the NRF's Global Port Tracker, produced by consulting firm Hackett Associates and released on August 13.
In 2011, year-over-year imports tracked by the report fell 7 percent in August, 0.6 percent in September and 5 percent in October.
For all of 2012, import cargo volume at major U.S. retail container ports should rise 4.8 percent from 2011, according to the report. In 2011, such volume rose just 0.4 percent.
Last year, 27 percent of Capital Business Credit's clients -- importers who sell goods to major retailers such as Wal-Mart and J.C. Penney Co Inc
Still, while 33 percent have seen holiday season orders perk up from 2011, 22 percent have seen such orders decrease.
Last year, U.S. holiday sales rose 4.1 percent, outpacing the NRF's October forecast of 2.8 percent but below the rebound of 5.2 percent seen in 2010.
This year, gas prices may be an added concern. The national average price was nearly $3.72 a gallon for regular on August 17, up from $3.58 a year ago, according to AAA data.
"Everyone is constantly worried about what's happening at the gas pumps," said Peter Whitsett, executive vice president of merchandising and marketing for Meijer, a private chain of nearly 200 stores and nearly 180 gas stations.
In states such as Michigan, where Meijer is based, the pop has been even more pronounced. The average price per gallon in Michigan is $3.95, up from $3.67 a year ago, and in spots across the country consumers are paying $4 a gallon or more.
RETAILERS GETTING READY
While the NRF will not issue its holiday forecast for several weeks, retailers are showing optimism, even though it can be hard to get a solid understanding of how consumers feel before the holiday season.
"Every Christmas is competitive and this will be no different," said Kohl's Corp
An extra two days between Thanksgiving and Christmas and Christmas falling on a Tuesday versus a Sunday in 2011 are expected to boost sales in the final stretch.
"Obviously, we have the additional time between Thanksgiving and Christmas, which will help the month of December," Macy's Inc
While the overall news in the economy is not all positive, shoppers are still feeling "better than they did in 2008 and 2009," said Jerry Storch, chief executive of Toys R Us
His chain will carry more exclusive products as well as classics such as Lego and Ninja turtles as it tries to win shoppers from its discount and online rivals, and Storch said he expects this should be "a good toy year."
Still, with some shoppers hesitant to spend, especially with rising gas prices, retailers are planning ways to entice such shoppers and reduce their own holiday-related costs.
Walmart will bring back layaway for the holiday season, letting shoppers pay for items over time, and said that it feels good about its inventory levels heading in the holidays.
Target Corp
She said the change should not jeopardize Target having items in stock "one bit."
(Reporting by Jessica Wohl in Chicago, additional reporting by Dhanya Skariachan and Phil Wahba in New York; Editing by Gary Hill)
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