《经济学人》10.05.27——The retailers' dilemma-经管之家官网！

America's shoppers
The retailers' dilemmaAs they decide how to stock their shelves later this year, America’s shopkeepers are debating whether the recent rise in consumer spending will lastMay 27th 2010 | NEW YORK | From The Economist print edition
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THE mood of executives at retail firms normally moves in lockstep with that of their customers. But in America the news on May 25th that consumer confidence had reached its highest level in two years left them oddly subdued. Consumer spending per person, which fell for two years in a row for the first time since the Depression last year and the year before, has been rising again in recent months. But as retail executives place orders for the crucial end-of-year rush, they are anxiously debating how strong and lasting the consumer’s revival will be.
In the first quarter both fancier retailers such as Gap, Macy’s and Saks and workaday ones like Target, Wal-Mart and Home Depot all announced improved results. The rebound has been strongest in luxury stores: same-store sales at Neiman Marcus, for example, were 11% higher this April than last. But there was also reason for cheer at Home Depot, which relies on humbler consumers and the still-low housing market: revenues were up by 4.3% on the first quarter of 2009. Sales of home-improvement gear such as paint and gardening tools were especially strong.
Although profits were up at Wal-Mart, sales at its American stores fell by 1.4% compared with a year earlier. “More than ever, our customers are living pay cheque to pay cheque,” says Tom Schoewe, its chief financial officer. “I’m worried,” admits the boss of another large retail chain, privately. “Things seem a little rougher now than in the first quarter.” The effect of the government stimulus is running out and consumers’ finances remain stretched, he confides. The International Council of Shopping Centres, a trade group, recently trimmed its sales projections for May.
Everyone agrees that American consumers are more cheerful than they were last year. A new survey by Deloitte, a consultancy, found that nearly two-thirds of them say their financial situation is as good as or better than it was a year ago, and that accordingly they plan to spend the same as last year or more. “Retailers should be encouraged by consumers’ tone as they plan for the critical fall and winter selling seasons,” says Stacy Janiak, who heads Deloitte’s retail practice in America.
Yet the recent improvement is from a very low base, especially at the grandest stores. Neiman Marcus’s strong April marked a rebound from a 22.5% decline in the year to April 2009; the 3.2% increase in revenues reported by Saks in the first quarter followed a 32% decline in the same period a year earlier, points out Steven Dennis, an analyst at Gerson Lehrman, a research firm.
The typical customer “still has a lot of fear in her heart, and she is still being very cautious,” says Michael Silverstein, a consultant and co-author of “Women Want More”, which argues that women control the lion’s share of household spending. “She had over-consumed before the recession. At the bottom of the recession, she had nothing unworn, nothing new. This spring, she looked at her closet, her kitchen, said, ‘Goddamit, I still have a job’, and decided to loosen the purse strings.”
This might explain the recent sharp increase in spending on lingerie, dresses, coats and even the higher sales at Home Depot, given that women, Mr Silverstein argues with dogged consistency, tend to initiate redecorating sprees. Loosening the purse strings did not mean abandoning the frugality that was the clearest consumer trend during the recession. “She still bought everything on sale,” says Mr Silverstein. Moreover, the volatile economy is clearly taking its toll; falls in the stockmarket are quickly showing up in lower sales. In short, says Mr Silverstein, “It is going to be a stressful summer for the consumer. She will be moody.”
“The assumption that when the recession was over consumers would return to where they were has already been disproved,” says Paul Leinwand, a consultant at Booz & Company. Retailers are investing heavily to track consumers’ behaviour in an attempt to work out what they might want to buy and how much they are willing to pay.
In general, retailers have learned to focus far more on lowering prices, and in particular to stock a larger proportion of products at the low end of the price range. Saks has been especially astute at this, not least by increasing significantly the share of goods on its shelves that carry its own label. This has been a trend across the retail industry in the past two years, and no one expects it to be reversed now that consumer sentiment is starting to improve. On the contrary, the proportion of private-label sales may well continue to rise to levels long seen in Europe.
Nor does anyone expect any reversal of another trend: consumers have been buying through a growing number of channels, from department stores to discount warehouses to the internet, often going online first to hunt for the best prices. All of the leading retailers have tried to spruce up their online act during the downturn, but few have done as well as start-ups such as Gilt Groupe, which uses social networking to carry out discounted sales of designer-label clothes and homeware, and luxury holidays.
Retailers have also tried to shorten the ordering cycle, so that manufacturers end up carrying more of the risk of managing stock. Many are trying to replace the standard four annual “seasonal” orders with as many as 16 orders a year, says Mr Leinwand. Five years ago only Zara, a Spanish clothes retailer, followed such a strategy, but firms such as J.C. Penney, Saks and Macy’s have since adopted it too.
In some respects, it was easier for retailers to plan during the recession, provided they had accepted the gruesome reality, since plunging sales were all but assured. Now, there is great uncertainty about what consumers will do. If the recent uptick in sales proves short-lived, retailers who extrapolate from the latest numbers will spend a miserable holiday season trying to offload unwanted stock at crippling discounts. Conversely, excessive pessimism could lead to empty shelves, disappointed customers and red faces in the executive suite. “I am trying to create the flexibility in our supply chain to deal with both these scenarios,” says the worried boss of the large retail chain. He, unlike the typical consumer, is finding little comfort in retail therapy.