Swimming Upstream

Government gridlock, consumer frugality temper retailers’ 2014 expectations in latest Outlook Survey.

By
Samantha Oller, Senior Editor/Special Projects Coordinator

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Transaction counts are down—partly because of unusually cold, wet weather—while any sales increases had been fueled by price increases. “In real dollars, we are behind last year,” he says.

However, this same retailer anticipates “some improvement” in 2014. 

“All of the above has ‘forced’ us to become better retailers,” he says. “We are refining our pricing and promotional activity. We are concentrating on our point of difference: foodservice.”  

Indeed, while the retailers who participated in CSP’s 2013 Outlook Survey face incredible challenges to growth in the coming year, they are not folding. Instead, they are doubling down.

“I see many opportunities as changes occur with customer shopping habits, trip planning, use of smart devices, demographic shifts, and shifts in how customers use legacy retail channels and apps,” says one retailer who rated current business conditions as “poor.” “However, I also see weak demand as an overall theme, so that retailers can still grow same-store sales, but it must come from fast alignment of assortments to changing needs and shopping habits.”

John Zikias, COO of Holmes Oil Co., Chapel Hill, N.C., which has more than 20 Cruizers c-stores in the state, rates conditions as “flat.” 

“From our standpoint, the biggest issue is the economy,” says Zikias. While some of Holmes Oil’s markets are strong—Durham, for example—others are weaker, such as Henderson, which is more rural and has higher unemployment. “We’re trying to figure out, in a tough environment, what do we do to improve sales and profits in those areas? We’ve never been one to sit around and wait things out. How do we do the best we can in those environments?”

His expectations for business in 2014 are “somewhat improved” because of efforts in store to improve plan-o-grams and reconfigure gondolas. “Based on other areas of the store where we did this, we are seeing strong improvement and think we have some runway to help next year,” says Zikias. “It may sound simple, but a lot is in fixing range, what’s selling and not, getting new items in quicker.”

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