general: January 2009 Archives

Regional value-and-convenience retailer Pamida is closing 11 of its 215 stores. Pamida cited "a negative drain on earnings" coming from the locations being shuttered. Pamida, which operates mostly in smaller towns, gets hurt whenever a Wal-Mart opens, and the economy's shift toward greater consumer value is forcing the closings.

As a small-town retailer, Pamida's news is indicative of the hyperlocal focus discussed here recently. View the store closing information as reported in Sioux City, IA; Norwalk, OH; southeast Iowa; and Park Rapids, ND.

It's probably not a whole lot of fun at the Javits Center this week, where the National Retail Federation is having its annual meeting. One of the more interesting takeaways is the forecast for post-recession retailing given by several respected analysts. Among them: more one-stop shopping, less retailer loyalty, changes in locations from lease renegotiations and a bargain-hunting atmosphere that may last until 2010.

The New York Times posted a thorough report on "dismal" 2008 holiday retail figures and the coming fallout. Sales were down 2.2% nationwide, a striking drop for an industry that is usually up 3 to 6 percent annually. Many retail chains posted same-store declines of 10% or greater.

Several analysts quoted in the article expect the next few months to be worse than the holiday season, as consumers have less compelling reasons to shop than they do before the holidays. One analyst says, "Even the best of breed are closing stores. That inventory will need to be liquidated into a market where consumers have no desire to spend." The article goes on to speculate on further store closings and retailer bankruptcies by chains with unmanageable debt loads, and that sell-in by manufacturers will be lower in 2009 as retailers stock less merchandise.

Not all the news was bad: Buckle, Aeropostale (previously noted) and Hot Topic all posted strong sales increases. But when an article ends with a quote about a "blanket of gloom," it's hard to be upbeat.

Update, January 14: the official government figures for December 2008 put the decline at 2.8%, the worst on record. Mind you, the "record" only goes back 15 years or so, but it's still a confirmation of the bleak retail environment this past holiday season. (via TD correspondent Josey Miller)