Ups and Downs of the Economy
July 27, 2009-- Home Textiles Today,
Walmart's got a $299 laptop offer. Kmart temporarily resurrected the Bluelight Special. Britney Spears is Twittering for Kohl's Candie's line.
All these early back-to-school promotions are threatening to overwhelm the extremely early Holiday season promotions — not to mention the regularly scheduled specials for 20 off, 40 off and 50 off.
As the Johnson Redbook comp sales tracker noted last week, price-cutting is helping to depress weekly results, which have been running negative for several weeks now. The firm noted the preponderance of price-oriented marketing campaigns could auger a price war among retailers.
Certainly, consumer sentiment has been herky-jerky all summer. Confidence ticks up, then falls again. WSL/Strategic Retail last week released survey results that found women would be willing to shop again if they were presented with truly differentiated product. The following day, Bigresearch presented a study saying consumers expect to cut back on their holiday spending.
There was an interesting nugget in the Bigresearch report — two out of five consumers believe the economy will go back to what it was before the recession. I'm not sure if that's a touching example of American optimism or the sad reflection of a delusional populace. Roughly one-third have no idea whether economic climate will be as robust as is was before.
HTT talked to several suppliers about their view of this year's back-to-school season, and the upshot seems to be that it will be 'good' in spots, particularly for well-priced merchandise. That 'good' doesn't mean 'good' by historical comparisons; it means 'good' next to the lousy sales environment we saw in much of the first half.
In seven weeks, we will anniversary Sept. 15, the day the financial meltdown began and retail sales started heading for the cliff. Because the post Sept. 15 business was so awesomely bad for so awesomely long, people sometimes forget that sales of home textiles were already in the dumps on D-Day — and had been for months.
I started hearing about it post-Thanksgiving 2007 as suppliers almost universally reported that none of their accounts were making plan. By January 2008, suppliers were predicting a soft first half. By February, they were expecting a slower sales recovery in the second half. And by the time we got to market week in March, a lot of suppliers were bracing for a bad year all the way through.
So home textiles suppliers and retailers have been tinkering, reformatting and reformulating longer than those that didn't begin to feel the pain until last fall. Let's hope that just as home was ahead of the pack in falling into the trough it will be in the lead in climbing out.
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