January: Missing the Bull’s Eye: Holiday Sales Forecasts
Bob Sheehan wrote about the questionable usefulness of holiday sales forecasts, especially when based on Black Friday sales:
“The Black Friday phenomenon has thrown sales forecasts for the holiday season way out of whack. Every year we hear reports of sales from the Black Friday weekend, supposedly an insightful gauge by which to measure the pulse of the holiday shopper and the strength of the holiday retail season. HOGWASH! With gross margins slashed to the hilt and shoppers jockeying for position outside stores, Black Friday sales figures don’t necessarily mean good things for a retailer’s holiday performance or bottom line.”
February: Dealing With the 900 Lb. Gorilla
Bob commented on the downsizing trend by big-box retailers as a strategy for responding to the growth of e-commerce:
“The current inclination of larger retailers is to develop smaller prototypes; simply put, big stores are getting smaller. There are several reasons for this - higher unemployment, the economy in general, changing technology - but the biggest factor is the large, menacing creature mentioned in the title, the gargantuan presence known as e-commerce. With an aging population and the propensity of boomers to spend more online purely for convenience, retailers need to take direct aim at the 900 Lb. Gorilla.”
March: Are You Buying What Best Buy Is Selling?
Bob wrote about Best Buys’ attempts at a turnaround under new CEO Hubert Joly:
“If Best Buy is going to compete, it has to be more than a showroom. Joly recently announced that Best Buy would put more focus on appliances, a category that had been relegated to the back of the store. Joly wants appliances front and center now, a shrewd tactical move in light of the housing recovery and the potential demand that should ensue. From a strategic perspective these recent moves should be applauded; but the big question now is, will it translate to the bottom line, and regain for Best Buy a little of the glory it once enjoyed?”
April: The Burgers of Burlington, MA
Chris Cardoni addressed the rise of “better burger” restaurants by conducting a taste test at nearby locations of growing burger chains:
“The lowly burger is enjoying a renaissance with the rapid rise and widespread expansion of so-called better burger restaurants, a category that now includes at least 50 chains, and which, between 2011 and 2012, grew by 21% and rang up sales of over $2 billion. We present an informal, unscientific rating of the offerings of each nearby chain, conducted by a panel of volunteer tasters [the winner: Bobby Flay’s Bobby’s Burger Palace].”
This issue featured highlights from the 203 KeyPoint Report on Eastern Massachusetts/Greater Boston:
“After suffering through the most dreadful economy in more than half a century, the Eastern Massachusetts retail climate is finally showing some giddy-up. Earlier this year the retail vacancy rate fell below 8.0% for the first time since 2008. The rate currently stands at 7.8%, the largest percentage drop in more than a decade.”
Note: the July issue featured a preview of our KeyPoint Report for Southern New Hampshire, and in September we highlighted the KeyPoint Report for Greater Hartford, Connecticut. This year’s reports, besides featuring an updated layout, included a 10-year historical section. All of our reports are based on quality data from our GRIIDTM, a powerful source of market knowledge that maintains detailed information on virtually every retail property in key New England markets. The 2013 reports are available on our website: click here.
June: The Case of the Shrinking Sales Index
Chris Cardoni on the shift away from monthly comp-store sales reports by retailers:
“In the 90s, over 100 retailers reported sales on a monthly basis, with the number dropping to around 75 by the early part of the last decade. We’ve always included a detailed list of sales results for retailers in a variety of categories. When I started working on this publication, in 2001, that list consisted of 73 retailers, all of whom reported monthly sales. Our current list reports sales for 40 retailers, and only five report monthly.”
August: Supermarket Square Footage: Winner & Still Champ
Bob Sheehan created a ten-year history of market share of traditional grocery chains in our region:
“There has been no substantial change in the relative market positions of The Big Three between 2004 and 2013. Stop & Shop, Shaw’s, and Market Basket remain at the top of the “food chain”(pun intended). Of course, we’d be remiss if we didn’t mention the grocery competitors taking a piece of the food expenditure pie: wholesale clubs, dollar stores, Walmart, and Target are grabbing significant shares of the grocery market. It would be compelling to analyze the growth of these non-traditionals against overall growth by traditional grocers.”
October: The 10th Anniversary Halloween Issue
Chris Cardoni’s semi-annual Halloween spending article looked at changes over the past decade:
“Halloween is about embracing fears. In the midst of a federal shutdown and yet another looming financial abyss, we embrace our economic fear: over 86% of people who will celebrate Halloween say they’re cutting back on overall spending because of the economy. But that’s not to say the October spending spree won’t still be robust: in 2003, when the NRF first began tracking Halloween spending, the total was $3 billion; this year they expect it to be nearly $7 billion.”
November: Too Big To Fail?
Last month, Bob Sheehan questioned the fate of certain perennial (and perennially troubled) retail dinosaurs:
“Rite Aid, Best Buy, JCPenney, Sears: do they have anything in common? Are they too big to fail? There probably isn’t a retailer out there that is truly too big to fail, but there are reasons why some hang on longer than others, and some hang on just long enough to ultimately survive. Why? Maybe sheer magnitude is as good a reason as any.”
All of which brings us to our current issue, and the close of another action-packed retail year. We thank you for reading, and hope you’ll continue to do so.
Happy Holidays and a peaceful, profitable New Year.
Mark Becker, Partner/CFO
Bob Sheehan, VP of Research
Chris Cardoni, Marketing Manager