>This season the National Retail Federation calls for a 1% decline in holiday sales from last year. The group uses Commerce Department data for November and December, excluding auto dealers, gas stations, restaurants and Internet sales. Craig Johnson our Consumer Chair and President of Customer Growth Partners forecasts 2.4% growth.

Craig believes that industry forecasting “is a sport”. The reason for the wide range of forecasts is that they rely on different pools of data. One survey might use government data, which is often revised, while another may use cameras mounted on the ceilings of retailers to gauge store traffic.

To complicate matters, for economists, the holiday shopping season starts much earlier than Black Friday. Their forecasts usually include November and December, and some include January to capture gift-card redemptions.

Industry forecasts also emerge months before Black Monday, which is after most chains have placed their holiday orders. Therefore economist and industry predictions serve almost no function for retail executives that need to make merchandising decisions. In the end institutional investors seem to know this already, they typically rely on guidance reported by individual companies.


>Mall tours with Arnie Cohen

November 24, 2009

>The year of plaid and costume jewelry. At the Westchester Mall you could have blown a cannon off on the Wednesday a week before Thanksgiving and there would not have been 50 people to hear it. Although traffic was minimum floor diplays and inventory was telling. The same mall according to Arnie was cooking over the weekend and based on follow ups appeared to be strong traffic again the weekend before Thanksgiving(as was Beachwood Mall in Cleveland). JCrew was a standout with inventory rolling down but new deliveries due the next day. Presentation was particularly strong at Express where the client is clearly teenage “date bait” Chico’s where new merchandising management is obviously making a difference, Bath and Body Works that just screamed to buy a candle gift and White and Black. GAP was mediocre(but in Cleveland was hopping) as was Nordstom who in Men’s is pushing Robert Graham at the young male-interesting. Liz is riding Lucky, Banana Republic has no conviction, Pottery Barn is missing the Christmas thought, Ann Taylor better be making it in the Outlets and Abercrombie has no greeters, alot of arrogance, little inventory and no customers- ouch. Stay tuned next week San Francisco and then Boston. Lots of updates in the meantime.

>To be released: Wednesday morning December 2

Ahead of the Thursday November retail sales summaries

Since 2001, Customer Growth Partners has prepared an annual forecast of Holiday retail sales, focusing on major specialty, broadline and discount chains. On December 1, CGP updates that forecast based on its proprietary surveys of November results—including Black Friday weekend activity at key mall and off-mall venues across the country.

The past year has seen unprecedented change in the retail industry, with Holiday 2008’s retail debacle followed by sharp downsizing, cost take-outs, revitalized merchandise and marketing strategies, and now—perhaps—the return of topline growth.

As we approach the traditional Black Friday kickoff to the Christmas shopping season, CGP invites you to subscribe to our annual Holiday forecast, including our real-time recap of Black Friday weekend retail traffic—ahead of the curve.

CGP’s 2009 Holiday Forecast/Black Friday Report will cover:

I. Consumer Spending Environment
· Economic Factors
· Key Behavioral Drivers

II. CGP Holiday 2009 Retail Macro Forecast
· Base Case Total and Sectoral Projections
· High/Low Scenarios/Sensitivity Analysis

III. November Retail Recap
· Pre-Thanksgiving
· Black Friday Weekend

IV. Holiday 2009 Outperformers
· Broadline
· Discount/Big Box
· Specialty Apparel and Other

V. Holiday 2009 Laggers


Customer Growth Partners has been featured in:

Chain Store Age (10/27)
CNN (11/5)
New York Times (11/6)
Bloomberg TV (11/12)
WWD (11/14)
Wall St. Journal (11/14)
Barron’s (11/16)

To Order the CGP’s 2009 Holiday Forecast / Black Friday Report:

For subscribers as of 5pm, November 27
Charter subscription cost: $495 payable in advance.

After November 27
Regular subscription cost: $595 payable in advance.

Paid subscribers will receive a For-Internal-Distribution-Only copy of the report by email the morning of December 2.

CGP’s Retail Macro Forecast is based on proprietary models, and includes factors such as disposable income growth, personal consumption expenditures, savings rates, energy prices and unemployment trends. CGP’s November field survey data, including the Thanksgiving weekend, are based on its team’s on-site observations, using proprietary sales estimation models, at key mall and off-mall venues in a minimum of six states across the U.S. including locations in the East Coast, West, Midwest and South. Its data includes no confidential or non-public data obtained from any retailer or retail affiliate.

To confirm your participation, please email Jeff Resnick at jresnick@trustnavigator.com, and CGP will reply with remittance information. To discuss, please feel free to call CGP at 203.801.9567, or contact Craig Johnson directly at Johnson@customergrowthpartners.com. CGP looks forward to working with you.

>Tatum/Roulston Report

November 20, 2009

>This month the Tatum survey continued to show the “L” curve with an upward bias is the state of business conditions. The economic recession that technically started in late 2007 in reality struck most businesses in “full force” in September and October of 2008. Although from the outset the year was a slow downturn, in the fall of 2008 business as measured by orders and activity fell suddenly in a 20-30% range across virtually all sectors. Earlier this summer the Tatum survey reflected that credit conditions, orders and backlogs had bottomed. Most other surveys and economists seem to concur.

But unlike so many past downturns and subsequent recoveries, the sudden drop last fall set a new lower baseline. We believe there is a new mindset in most boardrooms. Simply put it seems it does not seem there are catalysts to bounce back. Government stimulus was spotty and limited to random sectors in the last year. Government intervention and regulation are creating a sense of uncertainty not seen since the late 1970s. Budget deficits and Fed stimulus is creating anxiety with little confidence in capital spending and virtually no visibility in order patterns. The Tatum Survey reflects this in the trends of just general sloppiness for the last six months in terms of backlogs, employment and capital expenditures. Companies are reluctant to hire except selectively in spaces of unusual strength (ex. mortgage workout departments). Reduced employment has spurred margin improvements and in the survey there are signs of technology spending to further improve employee productivity.

The bottom line is that the government must extricate itself from the current role in business of perceived obstructionist and concurrently in some cases the sole short term stimulus. Businesses need visibility and confidence in a sustainable future. In this scenario the Fed loose policy supports balance sheet building with mixed signals of improvement. The markets will only digest so much of this before investors will want to see revenue growth.

>Our Boston presenter is adding to his position in Dice Holdings (NYSE: DHX, $5.88). The NY-based provider of online recruiting and career development services exceeded the consensus estimates in Q3. Operating results will continue to lag a turn in unempoyment. We’ve seen a bottoming in demand for the company’s services, but no pick up yet, according to the presenter. DHX just did a small acquisition in healthcare, which expanded the company’s addressable market from its two core businesses targeting finance and tech professionals. The presenter believes that if and when the economy starts picking up in earnest, the stock will reach low $10’s. DHX was presented at $4.00 end of July.

>Tom Madigan, a Roulston Research Consumer expert, recently attended the WWD (Women’s Wear Daily) conference in NY and reported back to us some points that came up. The overwhelming consensus at the conference is that the “asprational consumer”, the consumer with the “leased car and rented suit”, is gone. As a result, for example, Neiman Marcus’s business went from 5 Billion to 4 Billion overnight. These retailers that catered to this psychographic have to restructure their businesses to find a model that will be sustainable without them.

Most retailers claim that they’ve taken a lot of cost out of system. But the challenge now is how do they appeal to a larger share of the wallet of their now smaller customer base? They believe the answer lies in better aligning their inventory with demand. It’s a combination of selling “wear now” clothing, which means smaller runs with more frequent deliveries and “fast fashion” clothing which can be worn year round.

“Wear now” is about better matching the weight, color and quantity of their stock to demand. Stocking items that consumers believe that need to buy now, before the store sells out of the item. It’s about getting better at localization, literally taking retail back to where it was 50 years ago. Better knowing the attributes of the customer, so that the store can make a better stocking decision.

Some stores still base the stocking decision on employee opinions, but many have moved this function over to software. Computers crunching the demographics and buying habits for an individual store produces more accurate results.

Retailers hope that these changes will get their customers off of their “addiction to sales”. If the customer sees something in the store they need immediately, and understand that it may not be in the store the next day, they (the retailers hope) will be more likely to buy it based on need rather than based on price.