Blame it on the Rain
May 16, 2005,
Retailers are putting a new twist on that old saw that “everybody complains about the weather but nobody does anything about it.”
But given the fact that sales and earnings results so far have not been uniformly dismal, one has to wonder whether pricey petrol and March thunderstorms are wholly to blame for shoddy numbers.
Take, for example, Wal-Mart, which missed its first quarter earnings target and warned that second quarter results could be much lower than analysts expect. Despite magnificent puff pieces in recent issues of The New York Times and the Wall Street Journal, the 800-lb. gorilla of retailing continues to grapple with fashionability. And yes, low-margin grocery gets 'em in the door, but it doesn't necessarily lead 'em to 400-count sheets — however sharply those sheets are priced.
Target's consumers also got rained on during the first quarter, and their fleets of SUVs presumably drank up millions of gallons of expensive fuel. Nonetheless, sales at the Tiffany of Middle America climbed a robust 12.7 percent and comps rose 6.2 percent.
And Federated apparently failed to read the memo instructing the country that department stores are dead. Its sales jumped 27 percent in the first quarter — and did so despite that fact that its big-ticket home categories (furniture, bedding and rugs) skunked out during the period.
OK, one may argue, but Target and Federated shoppers are better heeled than the Wal-Mart customer. Au contraire, says I. There is no such thing as single-channel shopper these days. The Dollar General customer still coughs up what she can for a special-occasion dress at Younkers. Even the elite few who orbit the Neiman's-Barney's axis find their way to Costco and Sam's Club.
The quarter's winners so far appear to be those that have forged a vision of fashion leadership and committed their resources to delivering it to the consumer.
Which bring to mind another old retail saw: It all comes down to product.
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