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Survey: Chief marketing officers project 3.7% increase in holiday comp sales

BY Michael Johnsen

CHICAGO — According to a recent BDO USA survey, chief marketing officers at leading U.S. retailers expect a 3.7% increase in holiday comparable store sales, marking the survey’s most optimistic forecast since 2007, when CMOs projected a 5% increase in comparable store sales.

The majority of chief marketing officers (62%) expect consumer electronics will be the strongest selling category in 2012. The continued confidence in consumer electronics sales is likely fueled by similar expectations from 62% of CMOs that the category will see the most discounts and promotions during the holiday season. Price-matching programs at Target and Best Buy suggest that retailers will be battling with both online and brick-and-mortar retailers for these purchases.

“While we haven’t returned to pre-recession levels of optimism, retailers are gearing up for what looks to be a promising holiday season,” stated Doug Hart, partner in the Retail and Consumer Product Practice at BDO USA. “Still, consumers have more choices than ever, and retailers are looking to avoid showrooming by curating a mix of exclusive and top-selling products to get consumers in their door or on their site.”

Total holiday sales are projected to increase by 4.7%, reflecting slightly more optimism than the 4.1% projection released by the National Retail Federation in October.  

Despite the optimism for consumer spending, most CMOs (61%) expect holiday season inventory purchases will stay at about the same levels as last year. CMOs forecast a 1% increase in inventory levels, which is consistent with the projections cited in BDO’s September survey of CFOs. On average, CMOs expect SKUs to increase 1.2% during the holidays, meaning shoppers may see slightly more variety on the shelves this year.

Unemployment has been identified as the greatest threat to those holiday sales lifts, BDO reported, with more than half of CMOs identifying that as a significant concern. 

These findings are from the most recent edition of the BDO Retail Compass Survey of CMOs, which examined the opinions of 100 chief marketing officers at leading retailers located throughout the country. The telephone survey was conducted in September and October of 2012.

 

 

 

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Walgreens posts 2.1% drop in October sales, signs more than 28 million to Balance Rewards program

BY Michael Johnsen

 DEERFIELD, Ill. — Walgreens on Monday posted October sales of $6 billion, a drop of 2.1% as compared to October 2011. However, in only six weeks on the market, the chain’s Balance Rewards loyalty program signed more than 28 million customers through Oct. 31. 

The results include the brunt of the impact from Hurricane Sandy — at the peak of the storm, approximately 750 of 1,400 stores in the impacted area were closed, Walgreens reported. Nearly all of those locations have since reopened.

Total front-end sales fell 1.5% compared with the same month in fiscal 2012, while comparable store front-end sales decreased 2.9% through Oct. 31. Customer traffic in comparable stores decreased 5.2%, while basket size increased 2.3%.

Prescriptions filled at comparable stores decreased by 1.8% in October. Pharmacy sales decreased 2.6%, while comparable store pharmacy sales decreased 7.5%. Total same-store sales were down 5.9%. 

Flu shots administered at pharmacies and clinics season-to-date were nearly 3.6 million versus approximately 4 million last year.

Pharmacy sales accounted for 64.8% of total sales for the month.

 

 

 

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Retailers, suppliers recover, provide relief in Sandy’s aftermath

BY Alaric DeArment

NEW YORK — The Northeast is still recovering from one of the worst disasters it has ever faced. Many residents remain without electrical power, while others have lost their entire homes, businesses, workplaces and in a growing number of cases, their lives.

Retailers were by no means left untouched. Some found themselves forced to close large numbers of stores, while others didn’t close any and kept themselves open for people who would be in need as the storm was bearing down on them. Suppliers also stepped in, as did nonprofit pharmacy organizations. Below are some highlights of how retailers and suppliers fared.

  • Walgreens closed 750 stores ahead of the hurricane, and as of Nov. 2, about 130 remained closed in New York, New Jersey, Maryland, Virginia and Pennsylvania. The company began stocking extra items like nonperishable foods, water, batteries and flashlights, as well as arranging special transportation and lodging for employees who depend on public transit and preparing 160 portable generators for rapid deployment to stores as needed and dry ice for medicines requiring referigeration. The company also donated $250,000 to the American Red Cross for storm-relief efforts and three semitrailers full of bottled water to a Red Cross center in New Jersey.

  • CVS/pharmacy closed “up to 800” stores ahead of the storm due to mandatory evacuation orders, and 60 remained closed at press time due to evacuations or power outages, spokesman Mike DeAngelis told DSN, and 90 were operating on generators. At the same time, 100 were operating without power, meaning they were operating in an “off-line mode” without generators. About 15 stores in New York and New Jersey experienced either a total inventory loss due to water damage or couldn’t be reached for a damage assessment, but the company has donated more than $100,000 to the American Red Cross National Disaster Relief Fund to provide support to affected communities and is distributing $50,000 worth of snacks and bottled water in New Jersey.

  • Rite Aid closed 790 stores at the height of the storm, and 188 remained closed or were operating without power as of Oct. 31. In addition, eight stores sustained “substantial damage,” and the company expected that number to increase as field leaders gained access to more locations, but the company was re-opening stores “as quickly as possible.” The Rite Aid Foundation, the company’s philanthropic arm, donated $100,000 to the American Red Cross for relief efforts.

  • Sears Holdings, which operates the Sears and Kmart chains, had 187 stores closed at the height of the storm, but as of Nov. 1, that number was down to 40, while 20 were operating on generators or had generators en route, a representative of the company told DSN. The company announced that it would give out $350 million in rewards to Shop Your Way cardholders living in affected areas, amounting to $20 per cardholder. The company was also shipping extra supplies like flashlights, batteries, generators and sump pumps to stores.

  • Ahold USA, which operates 772 supermarkets under the Giant Food Stores, Martin’s Food Markets, Giant Food and Stop & Shop banners throughout the Northeast and Virginia, closed four stores, all in Stop & Shop’s New York-metro division, division spokeswoman Arlene Putterman told Drug Store News. One of the stores was in Long Island, N.Y., another was in Brooklyn and two were in New Jersey; the division has 184 stores total. Putterman said the stores would open periodically, starting the week of Nov. 5. Suzi Robinson, spokeswoman for Stop & Shop’s New England division, said the company had “deep experience” handing natural disasters and that all of the division’s 219 stores stayed open.

  • Supervalu closed all of the 117 Acme stores in the path of the storm on Monday, the day the storm made landfall, but had reopened all but four of them. “We want to make sure that anything we do really helps the communities that we serve,” Supervalu spokesman Mike Siemienas told DSN. “Our top priority right now is making sure that all of our stores that we can get up and running for the community are. And then we’ll work to see what community needs we may be able to assist with.”

  • ShopRite had 27 stores that remained closed at press time, but all its warehouses and distribution centers were fully operational and delivering products to stores “as quickly as possible to ensure our customers’ needs are met during this difficult time,” according to the company.

  • Target had reopened all of the stores affected by press time and also announced a donation of $500,000 in money and goods for storm-relief efforts, including $425,000 to the American Red Cross, $50,000 to the Salvation Army and $25,000 in gift cards.

  • Walmart had four stores that remained closed as of Nov. 2, but had pledged $1.5 million in relief efforts. The company said it was “working closely” with the American Red Cross, Salvation Army and Feeding America and also donating truckloads of water, food and other basic items and providing charging stations at Sam’s Club stores for members of the public without electricity to charge cell phones and other devices.

Many suppliers responded to the disaster as well — 

  • Duracell deployed its Power Forward Fleet, including the Rapid Responder, a truck that was making stops around the New York metropolitan area to provide power so that people could charge mobile devices and computers to communicate with loved ones, in addition to distributing more than one ton of batteries.

  • Drug maker Abbott and its philanthropic arm donated $1 million in funding and products to support storm-relief efforts.

  • Bayer donated $150,000 from the Bayer USA Foundation, to the American Red Cross and Save the Children — each will receive $75,000. Bayer has approximately 7,000 employees along the East Coast in the states most impacted by Hurricane Sandy, the company noted.

  • Anheuser-Busch sent 44,000 cases — 1,056,000 cans — of emergency drinking water to aid the relief effort in the New York and New Jersey areas. "Relief workers and people in the region are in need of safe, clean drinking water, and Anheuser-Busch is in a unique position to produce and ship large quantities of emergency drinking water," said Peter Kraemer, VP supply for Anheuser-Busch. "Our local distributors help identify those communities most in need and work with relief organizations, such as the American Red Cross, to make sure the water gets where it’s needed."
    In addition, the company also donated $100,000 to the American Red Cross.

Meanwhile, Rx Response, a collaborative partnership between drug makers, distributors and retail pharmacies, said it was working through the National Association of Chain Drug Stores and the National Community Pharmacists Association and liaising with government agencies like the Federal Emergency Management Administration and the Department of Health and Human Services. (For more on Rx Response efforts, click here.) Among other things, Rx Response activated its Pharmacy Status Reporting Tool, which provides information about pharmacies that are open in affected areas. The organization also said it received a request from FEMA for the NACDS and NCPA to see if any of their members could provide charging stations or mobile trucks that could go to identified areas to offer charging of durable medical equipment. “The object is to both facilitate communication about the supply chain and troubleshoot problems in the supply chain with managers,” a spokesman of the Rx Response member organization the Pharmaceutical Research and Manufacturers of America told DSN

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