By Jessica Wohl
Aug 19 (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 have seen strong sales of apparel, but
others including Aeropostale Inc have seen a soft start.
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 Chief Financial Officer Charles Holley.
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 Aug. 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 — felt that the 2011 holiday
season would be better than the 2010 one, Tananbaum said. Now,
43 percent expect the 2012 season will outpace 2011.
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 Aug. 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 CFO Wes McDonald.
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 CFO Karen Hoguet told analysts on a conference call.
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, meanwhile, got its toy vendors to agree
to send early holiday goods in the third quarter rather than in
the second quarter, Executive Vice President of Merchandising
Kathee Tesija told analysts on a call in mid-August.
She said the change should not jeopardize Target having
items in stock “one bit.”
