Back to School Spending Boosts Retailers

Consumer Spending Ticks Up
Retailers Gain from Greater Back-to-School Purchases Even as Key Confidence Index Slips
By Conor Dougherty and Karen Talley
The Wall Street Journal Corporate News August 31, 2012

Consumer spending increased 0.4% in July from a month earlier, the fastest pace since February, the Commerce Department said on Thursday. Meantime, reports from retailers—including Target Corp., TGT +0.20% Macy's Inc. M -0.84% and Gap Inc.GPS -1.19% —showed same-store sales gains in August compared with the same period last year.

Gap posted a 9% increase in sales at stores open at least a year versus a year ago. All three of the company's North American brands—Gap, Banana Republic and Old Navy—reported increases, including a 12% rise at Old Navy.

Cincinnati-based Macy's said its same-store sales rose 5.1% over a year earlier. "The strength was broad based across merchandise categories, geographies and channels," said Chief Executive Terry Lundgren.

The improvement in same-store sales comes despite slumping consumer confidence. The Conference Board, a private research group, reported on Tuesday that consumer confidence fell to 60.6 in August—the lowest reading since November—from 65.4 in July.

Electronics Stores Fight for Survival

Electronics Stores Fight for Survival

By Ann Zimmerman WSJ Business August 31, 2012

This Is an interesting update on the future of electronics specialty stores?

The article points out that the economics of the industry have evolved—and not to the benefit of most retailers.

The author of this WSJ article, Ann Zimmerman points out that not long ago, retailers such as Best Buy Co., GameStop Corp. and RadioShack Corp.were outmuscling competitors across America by offering one-stop shopping for the latest televisions, computers, videogames and gadgets.

They are now fighting to survive. The rise of online competitors like Amazon.com Inc.that offer low prices and downloadable products have siphoned customers and sales from these once-powerful retailers.

RadioShack, whose stock is down 75% this year, is playing down cables and connectors and refashioning itself as a convenience store for smartphone buyers.

The average price of a TV has fallen 40% since 2007 even as screen sizes have increased, while gross profit margins have tightened from about 30% on upper end models to the low teens, according to market research firm NPD DisplaySearch.

I find RadioShack particularly helpful when you need an electronic connector or adapter and you have no idea where to turn. I cannot imagine going online with these questions.