Retailers are trying various strategies to counter the drag from inflation and tariffs, from leaning on wealthier customers and celebrity ads to outright store closures. Headed into the year-end shopping season, they have had mixed success as consumers have turned much more cautious- even as they opened their wallets for the Black Friday shopping season.
Retail chains are seeking to adapt to evolving consumer behaviour – Bloomberg
Among the retailers that reported thus far this week, Dollar Tree raised its annual profit expectations, American Eagle forecast an upbeat holiday quarter, Macy’s hiked annual targets, and Zara owner Inditex surpassed expectations for fourth-quarter sales. Dollar General and Kroger will report quarterly results on Thursday.
“The unexpectedly positive results are likely a function of two key factors: lowered corporate expectations and greater consumer resilience,” said Jeff Derman, a partner in the consumer retail group at financial advisory firm Solomon Partners.
American Eagle’s “Great Jeans” denim campaign with actress Sydney Sweeney was among a flurry of celebrity tie-ups that helped the company boost demand- and bump its stock price, which has gained more than 60% since the beginning of September. Shares of American Eagle rose 15% on Wednesday after the company raised its annual comparable sales forecast after markets closed on Tuesday. The results also show that consumers are loyal to specific brands and looking for bargains, said Jay Woods, chief market strategist at Freedom Capital Markets.
Chesapeake, Virginia-based Dollar Tree drew in more customers from different income groups as it expanded its product assortment. It, too, beat earnings estimates. “The low-end consumer has been joined by the high end looking for bargains and has become more frugal and trading down in their shopping habits,” Woods said.
Meanwhile, department store operator Macy’s, which has been undergoing a months-long turnaround, on Wednesday surprised investors with a profit- but still warned of a “more choiceful” consumer due to inflation pressures. It forecast holiday-quarter profit below expectations, pushing its shares down about 1%. “Consumers are more discerning about how and where they spend their dollars,” Macy’s CEO Tony Spring said on a post-earnings call.
The crucial five-day Thanksgiving holiday shopping event saw a surge in online spending, mainly from more affluent shoppers. But underlying signs of economic fragility signal a pullback in spending could be looming.
During Cyber Week, shoppers at Target and Walmart cut down on impulse purchases, while more consumers than ever tapped short-term debt from buy-now-pay-later providers, Adobe data showed. In Europe, consumer demand has been tepid as shoppers trade down from high-street fashion to cheap online platforms such as Shein.
Inditex, a bellwether for global fast-fashion, beat analysts’ expectations for the start of its fourth quarter, a period that includes the crucial Black Friday weekend. It reported currency-adjusted sales growth of 10.6% for November. Inditex- which also owns Bershka, Massimo Dutti, Oysho, Pull & Bear, and Stradivarius– has been closing smaller stores and opening new, bigger flagships that deliver higher revenues.
“The question will be whether the consumer now backs off more than thought between now and December 25. Have they spent all to be spent on sales, and refrain from regular-priced spending from now to Christmas,” said independent retail analyst Bruce Winder.
On Friday, France demanded a series of measures from Shein to demonstrate that the products sold on its website comply with the law, but dropped its initial request for a total three-month suspension of the online platform, which had been based on the sale of child-like sex dolls and prohibited weapons.
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At a hearing before the Paris court, a lawyer representing the state said that Shein must implement controls on its website, including age verification and filtering, to ensure that minors cannot access pornographic content. The state asked the court to impose a suspension of Shein’s marketplace until Shein has provided proof to Arcom, the French communications regulator, that these controls have been implemented.
Shein deactivated its marketplace- where third-party sellers offer their products- in France on November 5, after authorities discovered illegal items for sale, but its site selling Shein-branded clothing remains accessible. The state invoked Article 6.3 of France’s Digital Economy Act, which empowers judges to order measures to prevent or halt harm caused by online content.
“We don’t claim to be here to replace the European Commission,” the state’s lawyer said. “We are not here today to regulate; we are here to prevent harm, in the face of things that are unacceptable.” At the time of writing, the hearing is still ongoing.
In a statement issued last week, the Paris public prosecutor’s office said that a three-month suspension could be deemed “disproportionate” in light of European Court of Human Rights case law if Shein could prove that it had ceased all sales of illegal products. However, the public prosecutor’s office said it “fully supported” the government’s request that Shein provide evidence of the measures taken to stop such sales.
France’s decision comes against a backdrop of heightened scrutiny of Chinese giants such as Shein and Temu under the EU’s Digital Services Act, reflecting concerns about consumer safety, the sale of illegal products, and unfair competition. In the US, Texas Attorney General Ken Paxton said on Monday that he was investigating Shein to determine whether the fast-fashion retailer had violated state law relating to unethical labour practices and the sale of dangerous consumer products.
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BasicNet’s Kappa turns back the sporting clock for its new AW25 collection, which celebrates “local heroes in football” with a community-focused campaign “honouring the places and people that inspire a lifelong love of the game”.
Image: Kappa
The campaign shines a light on local talent Tyrone Marsh in his hometown of Bedford, revisiting the streets, pitches and community spots “that shaped his football journey”.
Local photographer Simon Gill, who had pictured Marsh during many home and away games, not only “captures the Bedford Town player in the spaces that helped define his skill”, but also highlights the brand’s “rich football heritage with contemporary streetwear energy, creating visuals that pay tribute to community, culture and grassroots football”.
The journey includes Hartwell Drive, the early days of his after-school kickabouts, Hillgrounds Road, synonymous with Bedford football culture, and then onto Faraday Square, locally identified by the concrete pitches and community spirit.
To reflect that journey, the AW25 collection “offers a sense of nostalgia” with Kappa’s long-standing history in fashion and sports “seen through the Omini logo placements and 222 Banda strip”.
The campaign sees Marsh wearing Kappa styles including the Lyman and Uriah Track Tops paired with the Ulrich Track Pants in classic colourways including navy and light blue.
The wider collection includes track tops, track pants, shorts, polos, sweatshirts and T-shirts, available at select retailers across the UK including 80s Casual Classics, Terraces Menswear and RD1 Clothing.
UK footfall down in November? Blame the Budget and bad weather. Those two important factors damaged shoppers’ desire to venture out, resulting in an albeit slender 0.8% year-on-year dip in footfall last month, with all types of destinations suffering. It was also the seventh consecutive footfall decline, noted the latest British Retail Consortium (BRC)/Sensormatic report
Image: Nigel Taylor
That meant visits to high streets were down 1.2% in November and down from a 0.6% rise in October; shopping centre footfall dipped 1.3% last month, down from a 0.9% dip in October; and retail park visits were down 0.4% in November, but were better than a 0.5% dip in October.
The BRC also noted that November’s Storm Claudia prompted many consumers to search online for Black Friday deals throughout November, leading some to not visit physical stores on Black Friday.
But there was good news, with some northern UK cities – including Manchester and Sheffield – continuing to buck the trend, “recording positive footfall for the eighth consecutive month”.
So with many shoppers holding off on store visits until this month, Helen Dickinson, chief executive of the British Retail Consortium, said: “With the Golden Quarter in full swing, retailers are continuing to invest what they can to entice customers into stores over Christmas.
“However, as we approach the New Year, given the downward trend in footfall across recent years, we need a comprehensive strategy to revitalise our high streets and shopping centres, from better transport, affordable parking, to a reformed planning system to enable faster, better development.”
Andy Sumpter, Retail Consultant EMEA for Sensormatic, added: “November may have been dominated by caution, but there are glimmers of hope. The Golden Quarter isn’t over yet, and with four of our predicted Top Five shopping days still to come, the festive season could deliver the lift retailers need. A last-minute rush may top off the year, turning caution into celebration. With the right balance of value, convenience, and experience, there’s still time to make December count.”
Politics8 years ago