STORES Magazine - March 2008 - (Page 12)

CONSIDER THIS / PRESIDENT’S PAGE Checks and Economic Balances BY TRACY MULLIN The Voice of Retail Worldwide STORES is published by NRF Enterprises Inc., a subsidiary of National Retail Federation Inc., 325 7th St. NW, Washington, D.C. 20004. (202) 783-7971 FAX (202) 737-2849 hese days it’s a minor miracle when Congress agrees on anything. But with our economy weakening and retail sales beginning to stall, Congress and the president came together quickly last month to pass an economic stimulus package. In addition to tax incentives for businesses, the $152 billion measure provides $106 billion in immediate relief for consumers struggling with a perfect storm of high gas prices, inflation and a weak housing market. Now that Uncle Sam’s check is in the mail — at least figuratively — the big question becomes, what will Americans do with the money? Will shoppers go on a spending spree? Will they use it to pay down debt? Or will the cash simply be stashed away in a savings account? The answer appears to be “all of the above.” An NRF survey conducted by BIGresearch found that consumers are thinking long-term. In addition to spending $30 billion in rebate money to pay down debt, Americans will set aside $20 billion for savings. While that will put shoppers in a better position for the future, there’s also good news for retailers who are experiencing soft sales this year: According to the survey, Americans will spend 40 percent of their tax rebate checks, which is expected to provide the economy with an immediate $42.4 billion shot in the arm. Opportunities abound for a piece of the pie, and while the first rebate checks won’t arrive in homes until May, the time to plan is now. Much like the holidays, retailers will have to provide incentives to bring in consumers, so smart marketing and merchandising will be key. Retailers may want to consider cashing checks in stores or holding special promotions online to stand out among competitors. It should be no surprise that most shoppers plan to be practical with their rebate checks. In fact, 20 million people will be spending rebates on necessities like groceries, while 12 million plan to spend some of it on gas. Our research suggests that Americans will not be treating these rebates as “free money”; instead, they will be trying to make smart decisions on what to buy and where to spend. Americans’ focus on practicality gives an advantage to discounters, supermarkets and warehouse clubs. But department stores and specialty stores may also benefit strongly from families who receive tax credit checks of $300 per child. Many parents who receive rebates because of their children want to spend it on them. The survey results weren’t all grim: Some consumers receiving checks will splurge, with more than 10 million people planning to head on vacation and 3.5 million going to a spa. Creative retailers, no doubt, will be trying hard to get consumers to spend that money in stores instead. T CHAIRMAN OF THE BOARD Myron E. Ullman, III, Chairman, President and CEO, J.C. Penney Co. VICE CHAIRMEN Philip L. Francis, Chairman and CEO, PetSmart, Inc. Stephen I. Sadove, Chairman of the Board and CEO, Saks Inc. PRESIDENT & CEO Tracy Mullin SENIOR VICE PRESIDENTS Mallory B. Duncan, General Counsel David Hogan, CIO Karen Theibert Knobloch, Member Services Carleen C. Kohut, Finance & CFO Steven J. Pfister, Government Relations NRF Divisions Association for Retail Technology Standards EXECUTIVE DIRECTOR Richard E. Mader (202) 626-8140 National Council of Chain Restaurants PRESIDENT John R. (Jack) Whipple (202) 626-8183 FAX: (202) 626-8185 Retail Advertising & Marketing Association EXECUTIVE DIRECTOR Mike Gatti (202) 626-8117 FAX: (202) 737-2849 EXECUTIVE DIRECTOR Scott Silverman (202) 626-8192 FAX: (202) 626-8191 325 7th Street, NW Suite 1100 Washington, D.C. 20004 All articles published in this magazine represent solely the individual opinions of the writers, and not necessarily those of the National Retail Federation. 12 STORES / MARCH 2008 WWW.STORES.ORG http://WWW.STORES.ORG

Table of Contents for the Digital Edition of STORES Magazine - March 2008

STORES Magazine - March 2008
Executive Editor's Page
President's Page
Sam’s Club Gets Tough on RFID Stragglers
Athletes for Hire
What Shoppers Think
Goodwill Hunting
10 Things You May Have Missed
Numbers Worth Counting
Full Price/Markdown
Retail People
Luxury’s Shrinking Purse
Workplace Law
First Look
Green Retailing
Cosmetic Sales
Inventory Tracking
Loeb Retail Letter
ARTS Update
Point of View
NRF News
Retail Industry Calendar
Last Laugh

STORES Magazine - March 2008