According to March reports, sales at some of the country’s largest retailers are up, but caution is the watchword, experts say.
“I think there are a number of factors contributing to that,” said Elaine Notarantonio, Ph.D., professor of marketing at Bryant College. “Typically, retail sales pick up around Easter. Generally, I think we’re coming out of a long winter.”
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The increased buying, Notarantonio said, is linked to consumers wanting to believe that the worst of the economic slump is over and “hold onto the hope that whatever happened in the stock market was only temporary.”
Notarantonio said “cautious optimism” is the phrase she would use to describe the spring season.
“Based on what I’m reading and seeing, I think we’ve bottomed out,” she said. “I think we’ll start to climb out. I’m optimistic that the market is going to rise a bit and stay there, but I’m watching it cautiously.”
America’s largest retailer, Arkansas-based Wal-Mart Stores, Inc. reported net sales for the five-week period ending April 6, 2001, of $18.8 billion, an increase of 11.3 percent over the $16.9 billion in the similar period in the prior year.
Sales for the nine-week period were $33.7 billion, an increase of 11.5 percent over the $30.2 billion in the similar period in the prior year.
The primary way Wal-Mart continues to grow is through its superstores, which include grocery components, said Ronald Kuntze, Ph.D., assistant professor of marketing at Northeastern University.
“They’re becoming the dominant food retailer in the United States,” he said.
Framingham, Mass.-based TJX Companies, Inc., has reported that March 2001 sales results for the five-week period ended April 7, 2001 were $890 million, up seven percent over $835 million achieved during the comparable five-week period ended April 8, 2000. For the nine weeks ended April 7, 2001, sales reached $1,537 million, a 7 percent increase over last year’s $1,440 million.
Consolidated comparable store sales for the five-week period ended April 7, 2001 decreased one percent from last year. For the nine-week year-to-date period, consolidated comparable store sales decreased one percent from last year.
TJX includes Marshalls and T.J. Maxx.
Kuntze said a lot of the huge excesses are gone, and frugality is becoming a phenomenon fueled by a slowing economy.
“It’s very ‘in’ to get a high end name at a discount,” he said. “It’s cooler and hipper to go to Costco (a large discount chain popular in the Midwest and Far West) and buy beluga caviar for half off. Discount brand places are doing very well. The mall rats are getting older — they know what a Kenneth Cole shirt costs. Cheap chic is in.”
Minneapolis-based Target Corporation reported that its net retail sales for the five weeks ended April 7, 2001 increased 8.4 percent to $3.2 billion from $2.95 billion for the five-week period ended April 1, 2000. Comparable-store sales increased 2.4 percent from March 2000.
“Certainly Target is the one to watch,” Kuntze said. “They do a good job — young people like them.”
Kuntze said that even though the store is new to New England (with several Boston-area stores that opened around Christmastime, a store on Route 2 in Warwick, another off Route 1 in North Attleboro, and a new store under construction off Route 6 in Seekonk), about half of the students in his retail class have visited a Target store compared to only a handful that have visited a J.C. Penney.
But that Texas-based company could be experiencing a turnaround.
J.C. Penney Company, Inc. announced that comparable department store sales, for the five weeks ended March 31, 2001 increased 2.7 percent from the same period last year. Total department store sales for March increased 1.3 percent to $1.2 million from $1.2 million in the 2000 period.
The strongest categories for the month were home furnishings, women’s apparel and women’s accessories.
Notarantonio said she uses J.C. Penney regularly in her classes as a classic example of “confused positioning.”
“They’ve always competed directly with Sears,” she said. “They’ve tried to reposition themselves to compete with the middle end department stores like Filene’s and Macy’s.”
Recent advertising campaigns which portrayed the chain as being “fashion forward,” contradicted by stores with seemingly unchanged merchandise, gave shoppers mixed signals said Notarantonio.
That, coupled with threats from Macy’s and Filene’s to drop some of their distributors if they supplied clothing to J.C. Penney as well — “they didn’t want to jeopardize their positions as higher-end stores,” she said – further confused consumers.
Today’s improved numbers could indicate that things have turned around.
“I think they’re just beginning to come out of that and carve a niche for themselves,” said Notarantonio.
Department store sales have also increased.
The May Department Stores Company, headquartered in St. Louis and including Lord & Taylor and Filene’s reported preliminary net retail sales of $1.24 billion for the five-week period ended April 7, a 10.5 percent increase over $1.12 billion in the similar period last year. Store-for-store sales increased 5.2 percent.
March held mixed results for Seattle-based Nordstrom, which reported preliminary sales of $442.3 million for the month of March 2001, an increase of 9.5 percent compared to sales of $404.1 million for the month of March 2000. Same-store sales declined 1.1 percent.
Preliminary year-to-date sales of $794.4 million increased 8.0 percent compared to 2000 year-to-date sales of $735.8 million. Year-to-date same-store sales declined 2.4 percent.
“Nordstrom is suffering from two things: a general malaise in the department store business and the discount brand places — the TJXes,” Kuntze said. “Nordstrom was the epitome of service. I don’t know if they can hold that up now — everybody has a page from their book now. Today, people need a little bit of a deal to get them to go back again.”
