By Paul Ziobro
After many tough years, the improving economy may offer new hope
for the retail industry--and if not, there is new leadership to try
to fix it.
The U.S. economy grew at its strongest pace in 11 years in the
third quarter. Consumer confidence surged to its highest level
since the recession in early December. Unemployment has eased and
low gas prices are providing much needed relief for the country's
poorest shoppers.
That may provide some relief for big-box stores Target Corp. and
Wal-Mart Stores Inc. that have seen shopper visits decline for
eight straight quarters. Other chains like Sears Holdings Corp.,
J.C. Penney Co. and Abercrombie & Fitch Co. are all mired in
long slumps as they grapple with changing shopping habits and try
to fend off competition from online retailers like Amazon.com
Inc.
Both Wal-Mart and Target notched sales gains in their latest
quarter, but at the expense of profitability as retailers ratcheted
up promotions to clock higher revenue.
A new crop of chief executives will be tackling the landscape
where a greater share of shopping is done online. Wal-Mart, Target,
Gap Inc., Home Depot Inc., Abercrombie, American Apparel Inc. and
J.C. Penney are among chains with new or soon-to-be new CEOs.
On the low end, the three largest dollar-store chains remain
locked in a now six-month merger saga. Dollar General Corp., the
largest chain by number of location and sales, is trying to buy its
close rival, Family Dollar Stores Inc., and scuttle a planned sale
to Dollar Tree Inc. A new Family Dollar shareholder vote is slated
for January.
Retailers will have one thing to be thankful for as they start
2015: Weather. Last year, the first few months of shopping were hit
hard by frigid weather that swept across the U.S. Forecasters
predict that a milder spring could bring another measure of
relief.
Write to Paul Ziobro at paul.ziobro@wsj.com
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