Retailers say they're managing their inventories more carefully and implementing marketing strategies aimed at price-conscious consumers.
Forget, for now, Huskies vs. Cougars.
Another battle is shaping up this back-to-school season.
Cash- and credit-strapped consumers say they’re reluctant to open their wallets for anything other than a bargain, while retailers hope to avoid the kind of severe discounts that hurt their bottom lines.
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Who wins depends on how bargain-driven consumers are and the extent to which retailers can cater to them. To prepare for a tough fall season, retailers say they’re carefully managing inventories and implementing marketing strategies aimed at price-conscious consumers.
Target’s Web site, for instance, promises free shipping on a 50-pound desk with a $160 price tag. OfficeMax sells some school supplies for a penny. And Apple offers college students a free iPod with the purchase of a Mac computer before Sept. 15.
“Everything is being driven by the deal,” said Britt Beemer, a consumer analyst with America’s Research Group in Orlando, Fla. “If you don’t have the right deal, you’re not seeing any customers.”
Shoppers nationally are struggling with rising unemployment, high gas prices, declining home values and a turbulent stock market. NPD Group, a research firm based in Port Washington, N.Y., said consumers as a whole plan to curtail their back-to-school spending across almost all categories, though clothing and shoe stores are especially vulnerable.
Corporate Research International in Findlay, Ohio, reports that nearly three-fourths of survey respondents with children in grades K-8 plan to buy school supplies at a superstore or warehouse club, and more than 80 percent list price as the main factor determining where they shop.
The pullback in spending is hurting retailers focused on discretionary items, like skater-style sneakers and hoodies. Everett-based Zumiez, which sells board-sports apparel, shoes and equipment, said Thursday its second-quarter profit fell 13 percent to $2.7 million as sales at stores open at least a year decreased 1.7 percent. Zumiez also downgraded its outlook for the rest of fiscal 2008.
“We do not expect any improvement in the macroeconomic conditions or the promotional environment,” President and CEO Richard Brooks told analysts in a conference call.
Seattle-based Nordstrom this month reported a 21 percent drop in its second-quarter profit, citing lower sales and more discounting. President Blake Nordstrom described the competitive climate as “highly promotional.”
Discounter Wal-Mart raised its full-year forecast after its second-quarter profit exceeded expectations, but rival Target gave a cautious outlook amid a shaky start to the back-to-school season. To protect profits, Target said it’s adjusting the rollout of merchandise in stores to “accommodate different school-start dates, maximizing regular sales and minimizing markdowns.”
Portland-based Fred Meyer, which has 35 stores in the Puget Sound area, is noticing that sale items promoted in its advertisements are going quickly. “People want good deals for their money right away,” said spokeswoman Melinda Merrill.
At Westfield Southcenter in Tukwila, sales have exceeded expectations since a major expansion opened July 25, said general manager Andrew Ciarrocchi. Even so, stores “with the good price breaks have been doing especially well,” he said.
Sunday, shoppers stood in long lines in the children’s clothing department at JCPenney to take advantage of its 88-cent promotion, promising two items for virtually the price of one.
Last week, the PacSun store at Kent Station offered newly arrived sweatshirts regularly priced up to $70 for $40. Justice, which focuses on girls between 7 and 14 years old, sold hoodies for $20 as part of its “I (heart) deals” promotion. And Zumiez offered two pairs of jeans for $55, down from $60 last year, according to analyst Sara Hasan, of McAdams Wright Ragen in Seattle.
Hailey Angelone, 14, who will enter Thomas Jefferson High School in Auburn this fall, said she’s being “very stingy” with her money, avoiding impulse buys and items at full price. Last Tuesday, she bought a rainbow-colored T-shirt at Kent Station’s Hot Topic store for $10.
Angelone was shopping with Taressa Patterson, 15, a sophomore at Kentridge High, who wore one of two outfits she bought with $200 her parents gave her for back-to-school shopping. The outfit included a pair of Converse sneakers for $75, skinny jeans for $36, and a T-shirt for $11, marked down from $22.
“I can’t buy a lot with $200, and with gas prices going up, my parents didn’t want to give me that much,” Patterson said. “It went in, like, an hour.”
Gas prices also are changing the way Angelone and Patterson get around. “We took the bus here today,” Patterson said.
“It was either 75 cents” for bus fare, Angelone added. “Or $50 bucks in gas.”
Amy Martinez: 206-464-2923 or firstname.lastname@example.org
|Here’s a look at where consumers said they’ll shop this back-to-school season and how their plans compare with last year:|
|Source: NPD Group|