News
Results From Our 2012 Retail Trends Survey- Just Released!
February 4, 2013
In November 2012 we conducted a survey of thousands of retailers regarding their current business and how the economy is effecting sales compared to years past. Many retailers responded and we are glad to share with you the results we have compiled over the last few months.
JOIN OUR EMAIL LIST TO PARTICIPATE IN THIS YEARS BUSINESS SURVEY! CLICK HERE
2012 Retail Business Survey Results:
We never expected this holiday season to be as good as last year. But, it underperformed our projections and most of our retail contacts are saying business was worse than expected for the holidays in 2012. Still sales were generally up from 2011.
There are several contributing factors. Hurricane Sandy depressed business on the east coast. Mild weather in many parts of the country hurt clothing sales, and the tragedy in Newtown Connecticut took enthusiasm out of the holidays for many, depressing their inclination to spend.
Our retail contacts around the country have expressed concern about rising expenses driven in part by gas costs and the rising cost of shipping. New healthcare costs are also expected to have a negative impact. The ability to raise prices is being constrained by off-price competition and the Internet.
On the positive side, rising agricultural sales are improving the economy in farming areas. Historically low interest rates are motivating increases in house sales. This is good for all related areas of retail. Furniture, appliances and other home furnishings should continue to see increases.
There is a great deal of uncertainty caused by our government. We now look forward to another showdown over the debt limit. Republicans in the house see this as their best leverage to gain concessions on the spending side.
Currently government spending is on track to hit 25% of Gross Domestic Product (GDP) by 2016 and 30% of GDP by 2065. This results from current entitlement spending in addition to the new healthcare spending. Revenue will stay at less than 20% of GDP. History of income tax rates show that revenue will stay around this 20% level regardless of tax rates. Even when the top tax rates on the wealthiest citizens were 75%, revenue stayed near 20% of GDP.
It appears default on the debt is not a possibility. A January 11th Wall Street Journal article by Washington Attorneys David Rivkin Jr. and Lee Casey explained why. The Constitution’s 14th Amendment demands that public debts must be repaid. There is no such Constitutional protection for entitlement programs such as Unemployment Compensation, Food Stamps, Medicare, Medicaid and Social Security. These programs are not public debts but are subject to modification by Congress as are all other public spending programs.
The Executive Branch does not have the Constitutional authority to raise the debt ceiling by executive order. So, Congress could vote not to raise the debt limit and force the Executive Branch to make cuts in spending. Of course, Republican’s can be expected to take the blame for resulting cuts.
Any action taken by Congress and the President will affect retailers. The best way to spur sales in the short term is unlimited borrowing and spending. It will also get more incumbents elected in the midterms. It will surely have a very negative impact on the economy, at some point, but the current administration will be out of office by then.
Should our government make some meaningful effort to reduce government spending now, it will have a near term negative impact on the economy and retailers. However, it will give our children and grandchildren a better chance of escaping the debt burden of our government’s profligate spending.
In either case we expect the economy to slow in the second half of the year and to experience a mild recession in 2014. Our next holiday season will be worse than either 2011 or 2012. The economy should begin improving in 2015.
Results by Percentage:
Area Economy Ratings
48.5% of retailers rate their area economy as: Moderate (was 47% in Dec. 2011)
3.8% of retailers rate their area economy area as: Strong (Was 4.7% in Dec. 2011)
47.65% of retailers rate their area economy area as: Weak (Was 48.3% in Dec. 2011)
0.50% declined to answer
Business Environment
14.6% of retailers describe their business environment as: Getting Better (Was 19.8% in Dec. 2011)
39.5% of retailers describe their business environment as: Getting Worse (Was 38.5%in Dec. 2011)
45.9% of retailers describe their business environment as: Staying about the same (Was 41.7% in Dec. 2011)
0.05% declined to answer
Competitive Environment
36.8 % of retailers describe their competitive environment as: Heavy Competition (Was also 36.8% in Dec. 2011)
11.5 % of retailers describe their competitive environment as: Little Competition (Was 10.8% in Dec. 2011)
51.05% of retailers describe their competitive environment as: Moderate Competition(Was 51.75% in Dec 2011)
0.65% declined to answer
Anticipated Economic Change in 2013
13% of retailers anticipate Continued Improvement. (Was 19% in Dec. 2011)
28% of retailers anticipate a Lapse Back into Recession (Was 20% in Dec. 2011)
21 % of retailers believe economic change is Not Foreseeable (Was 16% in Dec. 2011)
37.4% of retailers say the economy will stay about the same (Was 45% in Dec. 2011)
.65% declined to answer
2012 Holiday Season Sales
20% of retailers report their 2012 Holiday selling season was: Better than 2011: (Was 27.4% in Dec. 2011)
42% of retailers report their 2012 Holiday selling season was: The same as 2011 (Was 35% in Dec. 2011)
34% of retailers report their 2012 Holiday selling season was: Worse than 2011 (Was 32% in Dec. 2011)
4% of retailers declined to answer
Business Expenses
31.3% of retailers say their business expenses in 2012 stayed about the same (Was 40 % in Dec. 2011)
56% of retailers say their business expenses in 2012 increased moderately (Was 48% in Dec. 2011)
9.2% of retailers say their business expenses in 2012 increased rapidly (Was 10% in Dec. 2011)
3% of retailers say their business expenses in 2012 were unsustainable (Was 2% in Dec. 2011)
0.50% of retailers report a Decrease in Expenses
Credit Environment
23% of retailers report credit is easy to obtain (Was 31% in Dec. 2011)
58.6% of retailers report credit is getting harder to obtain (Was 47% in Dec. 2011)
10% of retailers report credit is impossible to obtain (Was 11% in Dec. 2011)
8.4% declined to answer or reported the Credit was N/A for doing business.
Future of the retail business
5.5% of retailers say it will be impossible to succeed (Was 9% in Dec. 2011)
75% of retailers say their future looks difficult (Was 70% in Dec. 2011)
15.5 % of retailers say their future looks great (Was 21% in Dec. 2011)
4% of retailers declined to answer
What do retailers worry about (Many worry about more than one issue)
25% of retailers worry about excessive debt (Was 28% in Dec. 2011)
15% of retailers worry about obtaining credit (Was 13% in Dec. 2011)
27% of retailers worry about inflation (Was 26% in Dec. 2011)
60% of retailers worry about a recession (Was 55% in Dec. 2011)
25% of retailers worry about their competition (Was 34% in Dec. 2011)
49% of retailers worry about Government Taxes/regulation (Was 26% in Dec. 2011)
10% of retailers worry about their lease/retail location (Was 12% in Dec. 2011)
Percentages/results listed are calculated based on number of responses
Retail Exit Strategies Revealed
January 17, 2013
FOR IMMEDIATE RELEASE:
Denver CO~G.A. Wright Sales Inc, the leader in Store Closing Sales events for retailers has developed key strategies for preparing to exit the retail business.
G.A .Wright has prepared an extensive package of materials dealing with all of the key issues a retailer might face when making a decision to get out of the business. These include, obtaining the highest return on investment, selling everything including furniture and fixtures, negotiating debt, complying with government regulation, dealing with vendors, bankers and landlords and many other issues few retailers face in the course of every day business.
For this Exit Strategies Planning Kit CLICK HERE.
There are many ways for a retailer to leave the business. Some might choose to sell as a going concern. Others will auction their inventory or try to negotiate a bulk sale. These approaches are generally not the best way to sell a retail business quickly, safely or for the highest return on investment in inventory and other assets.
“The sale of a business that was a significant personal investment and carried some incredible emotional baggage was a difficult decision to make. But once we signed with G.A. Wright, I experienced an immediate feeling of relief.” GA Wright client Martha S. Murphy
You’d probably agree that it’s possible to sell items individually at a higher price than can be obtained by selling those items in bulk. I can show you how to sell a retail business by selling every piece, from inventory ... to fixtures ... to office furniture and equipment, to the buyer who will pay the most.
By conducting a professional store closing sale, the inventory and other assets of a business can be sold to consumers for far more than can generally be obtained any other way. It’s fast, safe, and the best way to get the highest price.
“In 27 years, no sale brought so much response. ... We could never have planned or executed it by ourselves. We were absolutely stunned by how fast and completely our store emptied out into the hands of happy customers. It far exceeded our expectations in sales, customer participation, and excitement.” G.A. Wright Client Sheila Sattler Kale
If you plan to exit the retail business you can receive an extensive packet of information at no cost or obligation if you CLICK HERE.
G.A Wright creates action-oriented Store Closing Programs that sell the entire inventory and all other assets of a store quickly, safely and for the highest possible prices. Each Store Closing Program is custom designed, taking into consideration store location, market demographics, inventory, sales history, competitive environment and the store’s employees. The objective of the sales plan is to obtain immediate results, produce heavy shopper traffic, and turn that traffic into sales.
New Retail Trends Report Holiday 2012
December 4, 2012
CLICK HERE TO TAKE THE RETAIL TRENDS BUSINESS SURVEY FOR DECEMBER 2012
The Holidays
Holiday sales look good but gains are mixed and will not equal the increases seen last year. Overall I predict retail sales, not including cars, to be up 4% over the same period last year. Furniture stores will be up 8% but this is still 10% below the peak year for furniture in 2006. Clothing and accessories will be up 5%. Sporting goods and other specialty stores should be up 5%. This will be a much better holiday than last year for specialty stores with sales equaling the peak year of 2007. Home improvement stores will be up about 1%. General merchandise stores won’t see an increase. Electronic and appliance stores will have no increase and this is still 12% below peak sales in 2007. Department stores won’t see a holiday gain. Department stores have been losing ground since 2000.
Online sales compete with brick and mortar and are expected to be up 16% for the holidays compared to last year. This should bring e-commerce sales for retailers to 6% of total sales. Not only do online sales cut into brick and mortar sales but online shopping continues to provide price competition. Traditional retailers must look for ways to differentiate. Examples are high levels of service, personalization, tailoring, unique products not found online and private label.
The Economy
The economy varies by region. I’d like to know how it is in your part of the country so I’ve attached a short survey. Please take a minute to fill it out and send it back in the enclosed envelope. I’ll get back to you with results.
Expect very slow growth to continue. I have anticipated another slowdown next year, after the election when politicians are likely to get more serious about addressing some of the Nation’s economic problems. The Federal Reserve apparently sees the same possibility and has announced a program to keep interest rates low through 2015. They obviously expect slow growth with the possibility of recession unless more stimulus is applied. This is uncharted territory. Who knows what happens when stimulus stops and the national debt needs to be repaid. Higher taxes, big cuts in spending or high inflation are the apparent options.
Although consumer confidence has shown a recent increase it remains well below the level indicated by a healthy economy. An increase in inflation is not anticipated. It should stay in the 2% range until unemployment drops and the GDP growth rate picks up. Unemployment will remain about 8%.
Good news for home furnishing retailers. The Federal Reserve will buy 40 billion dollars of mortgage back securities per month. This is intended to keep home mortgage rates low. More people refinance or decide to buy a home. That puts money in the system to fuel expansion but, more important to retailers, it stimulates home buying. More homes mean more home furnishing business. Existing home sales in August of 2012 were up 9.3 % from a year ago according to the National Association of Realtors.
Retail Trends
Don’t expect to see gains in retail sales from a growing market. The huge baby boom population is retiring and starting to curtail spending. The generation following the baby boom and in its prime spending years is considerably smaller. The U.S. fertility rate estimated at 2.06 births per woman is barely sufficient to maintain our population but only because of immigrants, mostly from Mexico. Many immigrants have not yet entered the middle class and don’t have significant disposable incomes. In general we can’t expect big gains in retail sales from growth in the market any time soon.
Older people don’t spend as much in stores as younger consumers. They buy more services and fewer products. The growing population of Hispanic immigrants shop differently than the population of middle class Americans. The result for retailers is a transformation that can be very painful unless it is anticipated and necessary changes are made. Significant opportunities for some specialty retailers lie in the Hispanic and baby boom markets.
The number of traditional retailers in the United States is declining. Store closings will continue as a result of competition from online shopping, growth of big box retailing, no growth of the middle class and a large number of retirees on fixed income who spend less on products in retail stores.
Growth opportunities do exist for smart retailers who understand the direction of change. Traditional specialty retailers that survive and prosper will provide high levels of service, target market niches where they can compete, and will carry unique or very high quality products. Mass market retailers will serve the less affluent segments of the population but will also provide commodity products to all consumers. Retailers that can provide show rooms for online sellers, install products and provide other services while retailing the most popular products on a sales floor can create profitable alliances with online businesses. Retailers with unique wholesale supply lines can exploit the powerful sales environment of the store while gaining new markets through the Internet.
There is no more powerful sales environment than provided by the traditional retail, brick and mortar store. Only in the store can you appeal to all five of the customer’s senses. A computer can only use two dimensional graphics and sound. A retailer who uses the store environment effectively will always be able to appeal to the consumer in the most compelling way. The problem is creating a strategy for using the retail environment to motivate a sale and prevent the shopper from going elsewhere to find a better price or selection.
The rapidly growing global middle class does provide a very attractive market for some retailers who have learned how to sell online. The key is being able to differentiate products and services, overcome language and cultural barriers and handle fulfillment of products and services internationally.
The World Economy
Don’t expect breakthroughs in product sourcing from China. Although China has made great economic strides and pulled millions of people out of poverty they face significant demographic challenges. A rapidly aging population and the one child per family policy have left China with a huge growing population of old people and a relatively small population of workers to support them. With no equivalent of Social Security or Medicaid one child must now support two aging parents in the best case. Society is left with the task of supporting those without children in the worst case. Growing social unrest, rising wage demands and decline in the working population will make it increasingly difficult for China to compete with other emerging economies. The result will be higher prices, contracting export volume and a slowing GDP growth rate.
India will be the next emerging economic power. India has a growing middle class, a large English speaking population, an improving education system, a growing population of young workers and are well positioned to compete globally. India and other emerging economies will produce the best import opportunities for retailers in the future as China’s influence declines.
Europe is dying. The economic problems being experienced now will not be resolved. Fertility rates well below the replacement level of two births per woman will keep these economies from growing even if the social policies inhibiting growth can be changed. A growing population of people on government assistance and demanding benefits, a shrinking population of working age citizens and a growing number of imported workers, who do not share the culture of host countries, present problems that appear impossible to resolve. Even if these countries can motivate increases in fertility and overturn entitlement policies, it will take generations to have a positive economic impact.
Japan will continue to decline. Again, the problem is demographic. Fertility estimated at 1.39 births per woman is not sufficient to replace the population and Japan is not importing workers from other countries. Their only gains are coming from increases in productivity. But, the strain of an aging population and declining number of workers will prevent any significant economic growth. Japan is not a likely source of new products for retailers or a growing export market.
The Middle East is in flames. War is likely to continue for the foreseeable future as the Middle East undergoes a huge transformation. Iran’s nuclear program remains the biggest problem and it is extremely unlikely that Israel will allow this threat to continue building. Israel can be expected to act unilaterally if not with the help of the United States or other countries. The possible result for retailers is a disruption in oil supplies, higher prices, inflation, and periods of recession. Retailers should anticipate economic volatility and be prepared to weather the storm.
Good news globally is a huge growing middle class in developing countries. These people want to live the lifestyle we have enjoyed. Growth is resulting from more stable governments, the rule of law and free enterprise economies. These growing economies need energy, infrastructure, food, natural resources, the technical products and expertise we can supply. There is every reason to believe that the long term prospects for economic growth in the United States are extremely good if we can adjust to the changing world and sell our products, services and resources to these developing societies.
What to Do Now!
Take advantage of this holiday season. Attract new customers, gain market share, and generate more sales volume. Although this holiday season will not see as large an increase as we experienced in 2011 this is likely to be a better holiday season than we’ll see in 2013 and 2014.
Retailers should be cautious going into 2013. Keep inventory levels in check. The next few years will be difficult. We are in for a long period of slow progress and could see some negative
surprises along the way.
It is the time to put your financial house in order. If you’re overstocked with merchandise, use every opportunity to eliminate this problem.
What about January and February? Customer traffic slows, sales volume drops off and cash flow problems develop. If the sales volume you’ve anticipated for the holidays isn’t realized then please give me a call now so we can start planning to eliminate the overstock and solve cash flow problems before this becomes critical.
Now is the time to create a program that will get 2012 off to a great start with increases in both customer traffic and sales. Volume increases of 2 to 3 time normal are common for my clients and this additional cash flow in January and February can solve a long list of problems.
If you need some help with your planning process let us know. We have experience with every type of retail in all parts of the country. We also have senior consultants who’ve dealt with stores just like yours. We’ll put you in touch with a professional who knows the business you’re in and can talk, in complete confidence, about your store and problems over the phone without any cost or obligation.
If you’re thinking about getting out of the business I’d be glad to send you some information about the best way to exit the retail business while recovering the maximum return from your investment in inventory and other assets.
In some cases it’s actually possible to liquidate a retail store for a net profit. But, you can’t wait until inventory is depleted and customer traffic has dropped off.
Start planning now. Planning well ahead can significantly improve your total return. And, there are several steps you can take to enhance your results now or years from now.
You can receive a detailed guide showing, “How to sell a store quickly, safely, and for the highest possible price” or one entitled, “How to produce big increases in sales volume, attract crowds of new customers, and unlock the hidden potential in your retail business.” Give me a call now or return the enclosed survey and reply form in the postage paid envelope.
CLICK HERE TO TAKE OUR RETAIL BUSINESS SURVEY
Call us at 303-333-4453
Industrial Clothing Store Closing Video Testimonial
September 29, 2011
Mary was very skeptical about the success of doing a public store closing event. But due to her bad experience with closing two of her three locations on her own, she decided to call in the experts at G.A Wright and was very happy with the results.
Retail Trends Blog Launched!
July 5, 2011
New and improved Retail Trends Blog was relaunched today to provide news to retail business owners on Store Closing Sales, High Impact Sales Promotions, Tips on advertising, case histories and current economic trends in retail.
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Owner of Western Apparel Store talks about his experiences using G.A Wright Store Promotion Services in the past, as well as using G.A Wright Store Closing Services prior to his retirement.
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Fabric Store Closing Video
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Fabric Store owner talks about the overwhelming success of thier Store Closing Sale event with G.A Wright. This store closed two weeks early and sold everything including fixtures!
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Local ABC station interviews Caldwells Classic Collections about using thier Store Closing Sale and using the services of G. A Wright Sales Inc.
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West Coast Furniture Gallery Closing Its Doors
March 1, 2010
SEBRING - Millie Havlock jokingly calls it "The Retirement Sale." The owner of West Coast Furniture Gallery is closing the store after 21 years in Sebring. "It's time; I'm ready," she said Wednesday. "The furniture business is not what it was 10 years ago."
Shuttered: Every Closing Has a Story
July 16, 2009
No one will fail to figure out what’s going on at the World of Music. “Closing.” “Fantastic Prices.” “Huge Sale.” The oversized signs in pink and green hang outside and throughout the store, where a liquidation consultant sits by the front door presiding over the going-out-of-business sale.
G.A. Wright's New Retail Trends 2009 Special Report Predicts a Long Recession but a Big Opportunity for Retailers in the Months Ahead
May 12, 2009
G.A. Wright Sales, Inc. the country's leading retail sales promotion firm, has just released its highly anticipated annual Retail Trends Special Report for 2009