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Jeff Green Partners

A LEADER IN RETAIL REAL ESTATE FEASIBILITY

jgreen@jeffgreenpartners.com

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Archives for August 2014

Middle-class shoppers more sensitive to back-to-school supply costs

Rick Romell and Kylie Gumbert / Miwaukee Journal-Sentinel – The giant pencil cutouts screaming “One Big Sale Here” throughout the Target store on Miller Park Way are a dead giveaway: This is the country’s second-biggest shopping season.

And for the great majority of Americans, the annual back-to-school extravaganza is unfolding across an increasingly price-sensitive landscape.

Cash-strapped, middle-class parents are being economically challenged by ever-growing lists that have expanded beyond protractors and No. 2 pencils to include graphing calculators, flash drives and Handi Wipes.

How did Lululemon fall so far?

Catey Hill / Wall Street Journal/Marketwatch – Product missteps and increased competition helped hobble the yoga-gear seller.

It wasn’t too long ago that ladies of a certain, er, social status wouldn’t be caught dead in their yoga class without cloaking their thighs in a pair of form-fitting Lululemons (with the coordinating Lululemon top, of course). But these days, many of those same women are shunning the pricey brand — and you can’t fully blame that on their fear of inadvertently revealing a bit too much while doing a downward dog.

Pass or Fail?

As an article that recently appeared in Chain Store Age has noted, there is something interesting going on with back-to-school shopping this year. At a time when online sales seem to be inexorably chipping away at brick-and-mortar sales, taking a bigger bite with every passing year, the 2014 back-to-school shopping season has actually seen the exact opposite trend: the International Council of Shopping Centers (ICSC) states that “the share of online as a BTS shopping venue will be 8.1% this year — a drop from last year’s 8.6%.” Overall, brick-and-mortar retail sales are projected to make up about 90% of all back-to-school shopping.

Additionally, the continued expansion of the back-to-school shopping window has some potentially significant implications for many retailers, who need to think and plan strategically to maximize their promotional efforts and optimize their merchandising. Instead of a busy couple of weeks, the back-to-school season is now a prolonged period of heightened activity: closer to months than weeks. In this edition of Retail Rap, the question remains: “Will that longer shopping window translate to more sales?” There the forecast is a little cloudier. While people do seem to be buying earlier, there are differences of opinion as to whether that means they will be buying more. ICSC and the National Retail Foundation (NRF) are expecting varying outcomes of this year’s back-to-school spending.

In this edition of Retail Rap, I consider the growing trend of consumers buying discount retail over specialty retail and how online shopping may begin to decrease and brick-and-mortar retail to increase in the coming back-to-school seasons, this year included.