Competition Leads to Trends
The commonly reported monthly comparable-store sales change provides an interesting snapshot of one month’s performance. The longer-range trend provides a truer insight into what is actually happening with an individual retailer or in an entire channel. The following analysis highlights retailers that have established consistently improving or declining long-term comparable-store sales trends.
Observations
The shift in the Easter time frame has created much comment and speculation on what the comp-store sales actually indicate. While no one will ever know the real answer, I believe the calendar shift has briefly masked two significant trends. The first is Wal-Mart’s continuing deterioration against Target. About a year ago, Wal-Mart quietly commented on its effort to attract Target’s customers. The master of basics, at everyday low prices, stepped into an arena it does not understand and has paid a heavy price.
Quarterly Reporters With an Improving Nine-Month Trend| Retailer | Last Reported Quarter | Last Six Months | Last Nine Months |
| Best Buy | 5.9% | 5.5% | 5.0% |
| GameStop | 26.5% | 22.2% | 19.3% |
| Tiffany & Co. | 9.0% | 7.9% | 7.1% |
| Tractor Supply Co. | 8.5% | 3.7% | 3.3% |
| Retailer | March 2006 | March 2007 | Previous 90 Days | Previous Six Months |
| BJs Wholesale Club | 3.1% | 5.5% | 2.0% | 0.7% |
| Fred’s | 1.0% | 4.4% | 2.6% | 2.2% |
| Gottschalk’s | –3.6% | 6.4% | 0.4% | 0.4% |
| Longs Drug Stores | –0.6% | 2.9% | 2.2% | 2.1% |
| Neiman Marcus | 7.9% | 10.2% | 7.9% | 7.1% |
| Nordstrom | 4.3% | 15.0% | 9.5% | 9.5% |
| Sam’s Club | 4.8% | 7.4% | 3.6% | 2.6% |
| Stage Stores | –3.9% | 12.4% | 2.9% | 2.9% |
| Wal-Mart US Stores | 1.6% | 3.4% | 1.3% | 0.9% |
| Retailer | March 2006 | March 2007 | Previous 90 Days | Previous Six Months |
| CVS | 7.0% | 7.0% | 8.1% | 8.4% |
| Federated | –1.1% | 2.3% | 4.7% | 6.0% |
| Walgreen | 4.3% | 8.0% | 9.0% | 9.4% |
| Retailer | Last Reported Quarter | Last Six Months | Last Nine Months |
| Charming Shoppes Inc. | –1.0% | –0.1% | 0.7% |
| Circuit City | –0.5% | 1.9% | 3.6% |
| Dick’s Sporting Goods | 2.0% | 4.8% | 5.3% |
| DSW | 1.0% | 2.0% | 2.1% |
| Foot Locker | –3.4% | –1.9% | –1.7% |
| Guitar Center | 1.3% | 2.0% | 2.9% |
| J. Crew | 7.0% | 12.2% | 13.4% |
Target has perfected the art of taking a little bit of style and creating a hip image. Wal-Mart lost sight of its customers’ rules and stepped too far into a taste level few of its customers wanted. The fact that Target was up 7.3% in March over its 90-day trend and Wal-Mart was up 2.1% over trend for the same time frame clearly indicates what is happening.
The second trend is the squeezing of Macy’s between Nordstrom, Penney and Kohl’s. The challenge here is rather straightforward. If you are a customer for better merchandise would you rather shop at Nordstrom or Macy’s? On the other end of the spectrum, if you are a customer for moderate goods, which of the three would you shop? All of our research clearly shows the absolute driver of consumer behavior is selection. In this situation, Nordstrom out-assorts Macy’s in better goods, while Penney and Kohl’s does the same in moderate.
Robert Gordman is the president of The Gordman Group, Denver, and is the author of “The Must-Have Customer—7 Steps to Winning the Customer You Haven’t Got.”