US retail’s rocky road: openings, closures, profits, losses, e-commerce

US retail’s rocky road: openings, closures, profits, losses, e-commerce

- in Retail, Slider
retail's rocky road in 2017

It’s still early in the year, but retail’s rocky road for 2017 is just getting started. We have news highlights and a roundup of the latest developments including openings, closures, profits, losses, e-commerce challenges and much more.

The National Retail Federation predicts 2017 retail sales will grow will grow 3.7% to 4.2% over 2016 and online sales will increase between 8%-12%. A PwC and JDA Software survey says 69% of retailers plan to increase investment in new technologies including mobile, big data and social media data.

e-commerce is 11.7% of US retail salesRetail Dive’s Consumer Survey shows shoppers want to touch and feel products and take them home immediately. Retailers need to up their game in-store. New research from the US Department of Commerce shows e-commerce sales grew 15.6% in 2016 and now make up 11.7% of total US retail sales.

Walmart had it’s best fourth-quarter since July 2012 with same-store retail sales up 1% and online sales up 29%. TJX plans to open four locations for a new home decor concept to complement plans for the opening of 81 new HomeGoods stores. Neiman Marcus opened new Last Call Plus Size departments in five of its Last Call outlet stores to cater to a new market. The Savills Global Luxury Retail report said London had the most new luxury retail openings with 41 in 2016, followed by 36 in Paris and 31 each in New York and Dubai. International tourists are the biggest market for these luxury stores.

JCPenney will close 140 storesPayless continues talks with lenders and plans to close many as 1000 US stores as it struggles with a huge debt load. JCPenney plans to close up to 140 stores and provide voluntary retirement for 6,000 employees in a plan to save $200 million annually. GNC’s Q4 2016 total sales dropped 8% and online sales dropped 29% as the company adjusted its pricing strategies and started selling on Amazon as well, to rebuild sales.

NRF Forecasts Retail Sales Will Increase Slightly Over 2016 National Retail Federation has released its economic forecast for 2017, projecting that retail industry sales, which exclude automobiles, gasoline stations and restaurants, will grow between 3.7 and 4.2 percent over 2016. Online and other non-store/online sales, which are included in the overall number, are expected to increase between 8 and 12 percent.

“The economy is on firm ground as we head into 2017 and is expected to build on the momentum we saw late last year,” said Matthew Shay, NRF President and CEO. “With jobs and income growing and debt relatively low, the fundamentals are in place and the consumer is in the driver’s seat. But this year is unlike any other—while consumers have strength they haven’t had in the past, they will remain hesitant to spend until they have more certainty about policy changes on taxes, trade and other issues being debated in Congress.

“Lawmakers should take note and stand firm against any policies, rules or regulations that would increase the cost of everyday goods for American consumers,” Shay said. Via

Survey: Digital transformation 2017’s top priority for many retailers transformation looks to be the top priority this year for a majority of merchants, as about 69% of retail executives say they plan to increase their investment in emerging technologies, according to a survey from PwC and JDA Software.

Mobile-enabled applications (85%), big data (86%) and use of social media data (85%) are the top technologies survey respondents are investing in or plan to over the next 12 months, while automation and the Internet of Things are lower on the list for investment but gaining momentum as they are perceived as true game changers.

About 52% of survey respondents have either not defined or not started implementing a digital transformation strategy, though progress varies by region. About 58% of Chinese retailers say they have started implementing such strategies, while in the U.S. the figure is just 40%, with 19% of U.S. retailers struggling to or choosing not to define this strategy at all. Via

Why most shoppers still choose brick-and-mortar stores over e-commerce ability to see, touch and feel products as well as take items home immediately rank highest among the reasons consumers choose to shop in stores versus online, according to Retail Dive’s Consumer Survey. For the first question in a six-part series looking at consumer shopping habits, we surveyed 1,425 U.S. consumers via Google Surveys about the reasons why they choose to shop in stores over online.

By a wide margin, the primary motivation for shopping in stores is to see and try out products before purchasing. However, some notable differences exist among shoppers, depending on their gender, age and location.

In particular, female shoppers overwhelmingly want to see, touch and feel products before buying them. Males, however, skew more toward the immediate satisfaction of taking items home with them. Via

US E-commerce Sales Grew 15.6% in 2016; 11.7% of Total US Retail Sales

E-commerce is 11.7% of US retail salesThe U.S. Department of Commerce has recently released a report that highlights the flourishing e-commerce scenario in the U.S. According to the report, e-commerce industry in the US accounted for 11.7% of the total retail sales for the year 2016, grew 15.6% year over year.

The total retail sales in the US for 2016 is estimated to be at $4,832.7 billion. The online sales accounted for 8.1% of the total retail sales in the US, bringing in $394.9 billion in revenue. The share of commerce sales in the US went up by 0.8% point from 7.3% in 2015.

The retail sales in the US also clocked the highest growth, 1.9%, in Q4 2016 during the year. Interestingly, the quarterly growth of e-commerce in the US remains disappointing. Via

Wal-Mart’s US stores just had their best quarter in more than four years’s U.S. business accelerated during its fiscal fourth quarter, helping the world’s largest retailer top Wall Street’s earnings expectations and record its largest domestic same-store sales increase since July 2012.

Wal-Mart has invested heavily in both its stores and e-commerce operations, which have weighed on its profitability. Last year, Wal-Mart earned $1.49 per share.
But those investments have paid off for its U.S. business, which recorded its ninth straight increase in quarterly traffic. The retailer’s total sales also edged 1 percent higher from $129.67 billion a year ago.

Wal-Mart’s online sales also accelerated, boosted by its acquisition of and the continued rollout of its online grocery service. U.S. digital sales rose 29 percent during the quarter. The company will no longer report an overarching global figure for its e-commerce growth in order to focus on the U.S. market. Its domestic online performance has outpaced its results overseas. Via

TJX plots new home decor chain concept, HomeGoods expansion to the strength of its HomeGoods stores unit, TJX Cos. CEO Ernie L. Herrman said Wednesday the company is poised to launch a second home decor concept, according to a transcript of his conference call with analysts from Seeking Alpha.

Herrman declined to name the concept or divulge many concrete details, but said TJX “will [strive] to differentiate these two U.S. home concepts to encourage customers to shop both stores” by offering merchandise not found at HomeGoods stores.

Herrman added that TJX will open four of the new U.S. home stores this year, as well as 81 new HomeGoods stores nationwide. Via

Neiman Marcus Realizes What It’s Missing With Plus-Size Shoppers Marcus is making a foray into the plus-size market. The Dallas-based department store is unveiling Last Call Plus Size departments in five of its Last Call outlet stores.

Starting this weekend, shoppers will be able to find designer goods in sizes 14 to 24, or up to 3X, in special “in-store boutiques,” according to WWD. Designer names will include NYDJ, Marina, and Nic + Zoe. The five locations — in Georgia, Texas, Florida, Maryland, and Michigan — open February 18th.

“I always have customers come up to me and say, ‘We love your jewelry. We love your shoes. When are you going to carry clothes for people like me?’” Frank Crisci, vice president of merchandising at Neiman Marcus Last Call, told WWD. “It struck a chord that we are not serving this customer the way we should be. It’s a huge market, and we’re not playing in it.” Via

Economy Watch: Tourism Growth to Boost Luxury Retail Worldwide topped the global ranking for new luxury retail store openings in 2016, according to the Savills Global Luxury Retail report, which was released this week. Tied for No. 3, New York was also high in the rankings—the highest in the United States, in fact. The British capital saw a total of 41 new luxury openings during the year, of which 15 were the respective brands’ first-ever stores in London, compared to 36 openings in Paris and 31 in both New York and Dubai.

For European luxury brands, London is a useful stepping stone to expand into the U.S., while for U.S. brands, it provides a gateway to Europe both geographically and in terms of brand profile. A number of European and U.S. luxury retailers opened new stores in the capital in 2016, including Moncler, de Grisogono and Valextra. Via

Payless Is in Talks to Close 1,000 Stores Inc. is in talks with its lenders over a restructuring plan that includes closing about 1,000 stores as it wrestles with an unsustainable debt load, according to people with knowledge of the matter.

The discount shoe retailer may consider filing for bankruptcy if it’s unable to reach a deal with the creditors, said the people, who asked not to be identified because the information isn’t public. A decision on whether to restructure in or out of court may be reached as soon as this month, they said. Via

JC Penney shuttering up to 140 stores as sales weaken, more sluggish growth seen ahead Penney finally lifted the lid on its plans to downsize its fleet, telling investors on Friday that it would close between 130 and 140 of its stores over the next few months.

The retailer expects to save roughly $200 million a year by closing these stores. It will take a pretax charge of roughly $225 million related to the closures in the first half of fiscal 2017.

Penney’s will provide roughly 6,000 employees with a “voluntary early retirement program” for workers of a certain age and tenure. As a result, the company expects a net increase in hiring as the number of full-time employees expected to accept the package will “far exceed” the number of full-time positions affected by the store closures. Via

GNC’s online sales drop 29% in Q4 sales are shrinking for health products retailer GNC Holdings Inc. and e-commerce sales are becoming a smaller part of those sales.

GNC, No. 166 in the Internet Retailer 2016 Top 500 Guide, said e-commerce accounted for 8.8% of its sales in the U.S. and Canada in the fourth quarter of 2016, or $41.6 million, down 29.0% from $58.6 million during the same time the year before, when e-commerce accounted for 11.4% of sales in the region.

The retailer has launched initiatives aimed at turning things around. GNC began selling its products on Inc. (No. 1) last month in hopes of broadening its online reach. Via

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