Retail Roundup | May 2023
As a retail technology company obsessed with data, we at Tillerman are constantly looking at the trends and forecasts shaping the retail industry broadly. The start of 2022 continued to bring challenges with supply chain issues, inflation and of course Omicron having an impact, but there were bright spots as well. Heres a roundup of some of the retail stories that caught our eye this month.
The recap of May begins with earnings reports from Wal-Mart, Target & Home Depot. Wal-mart reported increases while Target and Home Depot showed decreases. Diving into the results reveals that discretionary categories are trending down which helps to explain the Target and Home Depot numbers. Looking further into Target, WWD reports that 'affordable joy', like Target's partnership with Ulta beauty, were positives in a tough quarter for the retailer. Discretionary spending in categories like apparel and home, along with increases in theft and shrinkage, were a drag on results. Despite the soft performance, Target is committed to investing in these categories to maintain newness going forward. Macy's and Nordstrom both closed the month with earnings reports that were ahead of Wall-Street's expectations but behind last year. Both revised their full year forecasts down.
On the topic of theft, NYC is unveiling three new programs to address the continued increase in retail theft. The programs may or may not work, but the city deserves credit for their use of acronyms.
Retail Brew has an interesting piece on lost sales due to out of stocks, which continue to rise. The article shines a light on retailers' need to have better control of their inventory. Sticking with inventory, WSJ reports that retailers are working through their excess inventory and showing signs that they will flow newness for Fall. This is important signal considering NPD's report that newness represents less than half of what it was pre-pandemic.
On the jobs front, Nordstrom announced cuts in its tech staffing areas on the same day that CTIO Jason Morris started in his new role. Shopify is moving away from logistics and trimming 20% of its workforce, and Business of Fashion reported that retail replaced tech as the number one sector for job cuts in April.
We'll close this month's round-up with a few positive stories. First, The New York Times highlighted H&M's 20 year history of collaborations that started in 2004 with Karl Lagerfeld. A reminder that business realities we take for granted start with someone taking a chance. Next, Amazon reports that independent sellers continue to thrive through their platform; a hopeful sign for small business. And finally, Century 21 is reopening a scaled back footprint and mix. The retailer is hoping to find success by going back to its roots as a deep discount option for high-end fashion.
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