Retail Receipts Show Increase in January

It was reported that December’s consumer confidence level of 60 was something to be positive about. But the index wasn’t all that saw an increase, as a monthly survey conducted by the Conference Board revealed that more shoppers also believed business conditions were good, with 16.6 percent responding positively, compared with November’s 13.9 percent. How is this increase in consumer confidence actually affecting shopping habits? According to a report on Bloomberg.com, “Sales at U.S. retailers probably increased in January by the most in... 

Off-price Buying: Strategies and Pitfalls

Many retailers spend more time planning their vacations than they do planning their inventory. Of course I can’t prove this, but it stands to reason given the fact that the average shoe store still turns inventory twice annually and is accepting of a gross margin return on inventory (GMROI) of less than $2. If we accept as fact that proper inventory planning is a key component to maximizing profitability, it makes sense that more time spent planning would lead to increased profits. Given that most open-to-buy dollars are allocated to initial or... 

A Thorough Year End Business Analysis Provides Educated 2012 Predictions

Retailers, while not acclaimed fortune tellers, quite often are asked to predict the future. What products are going to sell well during the holiday season? How much inventory must be purchased to meet demand? Will markdowns be required? And as the fourth quarter comes to a close, retailers are expected to make the largest prediction of all: Can growth and profit be expected in the new year? Without proper analysis of your financial situation, this prediction is nothing more than an uneducated guess. Leanne Hoagland-Smith, a Chicago area business... 

What Small Businesses Can Expect During 2012 Tax Preparation

As the new year begins, retailers are taking a close look at their year end review and preparing for the upcoming tax season. Taxes remain an important topic on the federal level as they directly affect the national deficit, job creation and the economy. And while tax planning changes with each presidential election, retailers and other small business owners can be assured of a few things this upcoming tax season. Taxing Rules, Regulations and Conditions for the 2012 Tax Season First, favorable business tax rules may be extended.?While numerous... 

Better Inventory Forecasting to Generate Cash Now

I am going to outline a very typical retail scenario, one that occurs way more frequently than you might expect. Once the problem is described, we will analyze it and see what you might consider if this were happening to you. Problem: Your accountant tells you that you have a net profit of let’s say $50,000, but your bank account says the exact opposite. Where’s the Cash? Why does the accountant think you are making money when there is no money in the checking account? The obvious answer is that the cash is tied up in the unsold inventory.... 

Indie Retailers Advised Against Becoming Low Price Leaders

Pricing is never to be used as a strategy in gaining a sustainable competitive advantage because even with the perfect price your competitors aren’t far behind in matching it. The products or services in which you supply are the only thing that will set you apart from the competition and hopefully provide you with a sustainable advantage when it comes time for your customer to make a purchasing decision. In turn, your corporate strategy should be focused on the advantageous differences your products and services bring to the market and how you... 

Improve Your Banking Relationship

The banking environment poses challenges for retailers looking for financial assistance. This article will provide you with both sides of the equation, as well as tips on what you can do to improve your banking relationship. The Retailer’s Perspective One retailer told me he, “hasn’t felt much like a customer lately,” when describing his long term banking relationship. Other retailers have had their credit lines reduced by as much as 30 percent, even if they weren’t currently being used. In another instance, a bank... 

The Truth About Markdowns

The word itself strikes fear in the hearts of most retailers.  Call it by whatever term you wish, “price adjustment,” “promotion,” or just plain “sale,” the translation is the same and conjures up all sorts of negative emotions.  The fact remains, however, that any reduction in the retail price is really a markdown. Most folks in the retail business have an inherent disdain for the very word. Taking too many markdowns represents failure in some area or another.  Overbuying, duplication, poor timing of deliveries, bad assortment planning,... 

Retailers Disappointed in Debit Card Swipe Fee Decision

The National Retail Federation (NRF) and retailers, after months of aggressive campaigning to preserve swipe fee reform, are disappointed by the Federal Reserve’s decision to set the debit card swipe fee at $0.21 per transaction. The NRF recently launched a 60 day advocacy campaign in an effort to, “expand retail’s advocacy footprint to match the industry’s broad economic footprint,” explains Matthew Shay, president and CEO of the NRF. With the new strategic plan, the NRF committed new resources to ensure that retailers... 

Is Your Initial Markup Enough?

One question I am repeatedly asked by retailers is how to increase maintained margin.  Several answers readily come to mind, the most obvious being to avoid overbuying, and therefore, reduce the margin eroding markdowns that accompany such a practice.  Another way of increasing maintained markup is to find ways to increase initial markup (IMU). Understanding Markup Language Let’s make sure we are all speaking the same language.  When I say, “initial markup,” I am referring to the markup percentage placed on the goods when they are received... 

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