Surveys, predictions and reality — a retail season of wonder

It’s certainly a matter of “who ya gonna believe” when it comes to sales data and predictions. SNEWS follows all the reports and survey data closely and this year, we’ve decided to try something new — present all the various pertinent facts and predictions in one story for you to eyeball.

Reality is found not in predictions, but in hard sales and while economists are touting modest increases for retailers this year, Black Friday (the day after Thanksgiving and so named because it is the day when retailers expect to head into the black) gave reason to hope if not get downright giddy. The National Retail Federation reported that three out of four consumers went shopping over the Black Friday weekend, and that’s a good thing. Many retailers, including a few outdoor specialty folk who took time to email us, reported record sales.

This holiday is when most retailers — and outdoor and fitness retailers are no exception –expect to account for 20 percent to 40 percent of the annual sales volume. Perhaps the fact that consumer confidence numbers began to turn around after hitting nine-year lows boosted sales. Perhaps it was because consumers have spending cash from holding back for so long and from refinancing homes that they were finally ready to shop, despite gloom and doom predictions.

Whatever the reason, things appear to be heading toward a strong season, and that bodes well for retail. Retailers are telling SNEWS that October was awful, November slightly better, and the first few days of December are looking downright peachy. Of course, a little weather cooperation would be nice too, but there’s not much statistics or predictions can do to help us with that one.

Here then, is our digested look at predictions, stats and reports for your reading pleasure…it’s best digested over milk and cookies we think.

RETAIL DATA AND SURVEYS

A quick glance at all the data — who to believe is the question
Nov. 29 — We’ll begin with Deloitte Research, considered by many to be the leading index of consumer spending. In its economic report offering an outlook for the holidays, Deloitte states, “Even before the West Coast dock strike, retailer inventories were at record low levels. Lean inventories will reduce the need for the kind of aggressive price cutting the industry has endured during recent holiday periods, giving retailers some respite on margins. Labor costs have also been kept well under control. Headcount at retailers is down about 1 percent from a year ago. Total labor costs are only marginally above their year ago levels. That leaves sales as the only question mark in the retail profitability puzzle. With consumers sitting on a mountain of cash generated from mortgage refinancing, tax reduction and modest employment gains, this should be one of the better holiday selling seasons of the past decade.” Deloitte predicts a 6.32 percent increase in holiday spending over last year. For more, go to www.us.deloitte.com.

A bit of history then. According to the U.S. Commerce Department, last year’s holiday sales generated $284 billion. Online retail accounted for $11.2 billion.

So, what do all the surveys think will happen this year? Beyond Deloitte, Retail Forward predicts a 3.3-percent increase. The National Retail Federation is banking on a 4-percent increase. About Retail Industry thinks we’ll see between 3.7-percent to 4.2-percent increases with a sales prediction of $295 billion for the season.

As for online sales, those who are selling on the web are smiling. Retail Forward expects a 15-percent increase to $13 billion. Jupiter Research thinks the increase will be 17 percent to $13.1 billion. GartnerG2 is betting on a 32-percent jump to $15.7 billion. eMarketer predicts the rise will be 16 percent to $12.97 billion, while comScore thinks more modestly at a 27-percent increase to $13.8 billion. Most bullish of the bunch is BizRate.com which believes sales will top $16.8 billion for a 35-percent jump.

Of course, if you’re really into crunching numbers, you’ll quickly see that those percentage increases and numbers don’t actually jibe with U.S. Commerce figures, meaning that each survey has its own base sales numbers and that’s just downright confusing!

Business Journal survey finds small business owners very worried
Nov. 29 — For the first time in the 18-month history of the quarterly American City Business Journals Insight poll — www.bizjournals.com — business owners have turned pessimistic with 55 percent now saying the economy is weak and 43 percent say they don’t expect it to improve for the next six months. In the survey, scores are arrived at by combining opinions about economy and business plans, with a score of less than 100 considered negative. Two of the regions in the survey — the West and Northeast — dipped below 100 for the first time in the poll’s history. The Midwest was the only region that saw improvement, up to 109 from 106. The South remained the most optimistic with a score of 115, down from 119 in July.

Michigan Retailers Association expects modest sales gains
Nov. 27 — Despite a shorter holiday selling season, Michigan retailers reported that because of holiday season sales starting earlier than ever before, 52 percent expect to increase sales for the month of November compared with same-time results last year. Twenty-four percent expected flat sales no matter what. Overall, the MRA stated that retailers in their region are expecting holiday season sales to increase 3.7 percent, in line with previous projections. Last year’s sales gains were 3.3 percent.

Conference Board predicts holiday spending will rise 5 percent
Nov. 25 — The Conference Board — www.tcb.org — conducted its annual survey of Christmas spending intentions covering a sampling of 5,000 households and discovered the following. Thirty-four percent of U.S. families will spend more than $500 on Christmas gifts this year with another 38 percent spending between $200 and $500. Twenty-seven percent of American households have said they intend to purchase their gifts online this year, a significant increase from last year’s number of 21 percent. Overall, the average family will spend $483 for Christmas gifts, up from last year’s $462 total, an increase of 5 percent. The most dollars will be spent in New England, with the lowest average spenders in Kentucky, Alabama, Mississippi and Tennessee.

CONSUMER CONFIDENCE AND SATISFACTION INDEXES

The Consumer Confidence Index rises slightly perhaps indicating turnaround
Nov. 26 — The Conference Board’s Consumer Confidence Index, which has declined for five straight months, rebounded in November. The Index now stands at 84.1, up from 79.6 in October. The Expectations Index rose to 88.4 from 81.1. But the Present Situation Index remains relatively flat, edging up to 77.6 from 77.2. The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by NFO WorldGroup, a member of The Interpublic Group of Companies (NYSE: IPG). The November preliminary survey period dates were November 1 to 18. Consumers’ expectations improved over last month’s readings. Those anticipating an improvement in business conditions in the next six months rose slightly to 19.9 percent from 19.3 percent. Those expecting conditions to deteriorate fell to 11.4 percent from 14.3 percent. The employment outlook was also more favorable this month. Consumers expecting fewer jobs over the next six months declined to 18.9 percent from 22.1 percent, while those anticipating more jobs held steady at 15.3 percent. Income expectations were more optimistic. Now, 19.0 percent of consumers anticipate a rise in their incomes, up from 17.9 percent in October. For more info, go to http://www.tcb.org/economics/consumer.cfm.

ACSI reports rise in consumer satisfaction levels for glimmer of hope
Nov. 18 — Although consumer confidence levels have been slipping for nearly five months, customer satisfaction and consumer spending continue to rise according to the latest results from the American Customer Satisfaction Index (ACSI). Customer satisfaction data on non-durable goods (food processing, soft drinks, beer, tobacco, apparel, athletic shoes, personal care products, and pet foods — ed note: yeah, we wonder the same thing…how on earth any of those are even related) rose slightly from a second quarter score of 73 to a third quarter rank of 73.1 (maximum score is 100). Compared to the same time last year, the index is up 1.5 percent from a score of 72. The survey experts and economists note that the ACSI and GDP (Gross Domestic Product) numbers typically move in the same direction and that holds true in this case. Statistics show that consumer spending accounted for much of the GDP growth in the third quarter. The survey also pointed out that the trend for companies to simultaneously improve quality and costs (possibly at the expense of margin) continues, which is good for the consumer. Lack of pricing power continues to be an issue for the economy. Individually, the study pointed out the adidas and New Balance continue to produce the highest satisfaction levels in the athletic shoe segment. For more, go to www.theacsi.org.

ONLINE STATS AND REPORTS

Online sales and number of shoppers increase on Black Friday
Dec. 2 — Online holiday sales are up compared to last year, as consumers spent $196 million on the web the day after Thanksgiving, according to comScore Networks. That represents a 30-percent increase over the $150 million web shoppers rang up with their plastic a year ago. According to Nielsen/NetRatings, virtual department stores attracted nearly 3.2 million shoppers on Black Friday. Shopping aggregators drew more than 2.5 million visitors, while consumer electronics posted 838,000 shoppers. comScore reported that computer hardware, consumer electronics and apparel were the top three non-travel e-commerce categories for both Thanksgiving and Black Friday.

Of course, while comScore is boasting its figures, BizRate has rolled out another set, for the same time period. Go figure. According to BizRate, Black Friday rang up $234.2 million in sales for online merchants, a 61-percent increase over the same day last year. Month-to-date data from BizRate.com (Nov. 1 to 29) placed sales at $5.4 billion, a 37-percent rise over the same period last year. BizRate is also going out on a limb predicting that Dec. 9 will be the peak online shipping day with projected sales of $387.7 million.

For E-tail, consumer satisfaction is on the rise boosting sales
Nov. 26 — According to the first installment of the 2002 eSpending report from Goldman Sachs & Co., Harris Interactive and Nielsen/NetRatings, the average online shopper spent nearly $72 per person during the week ending Nov. 15, a 28-percent increase over the same time a year ago. The increase in spending was partly a result of greater customer satisfaction: 22 percent of 770 online shoppers surveyed rated their e-commerce experience better than last year’s.