KEY POINTS:
American chain stores, reeling from the slowest holiday shopping season in five years, got some more bad news yesterday: 2008 will not be any better and could see changes that may shift the retail playing field forever.
As the National Retail Federation kicked off its annual convention in New York, two retail consultants offered negative outlooks for the US retail industry, which has seen consumers pull back amid higher petrol and food prices, a credit crunch and a prolonged housing market decline.
"It's anarchy," said Wendy Liebmann, chief executive of WSL Strategic Retail, frequently repeating the word she used to sum up the latest results of her company's bi-annual shopper study.
"Americans cannot control the big things such as oil prices, falling home values, mortgage costs and rising property taxes, so they want to control the small things," Liebmann said. "They are watching what they spend on everything."
Liebmann said most shoppers were making fewer weekly shopping trips and spending significantly less on discretionary items such as home appliances and decor, fashion accessories, electronics, perfume, computers and software.
The only two categories getting a larger share of consumers' wallets are food and pet supplies - but Liebmann noted, however, that food prices had increased. But with shoppers changing their habits, opportunities are also emerging.
Liebmann projected this year's winning retail sectors would be department stores such as Saks and JC Penney, in part because they have improved their offerings, and drug stores such as CVS Caremark, that have added things such as better brands of beauty products and in-store health clinics.
Losers are likely to be mass merchants like Wal-Mart Stores and Target, and speciality stores such as Barnes & Noble as shoppers are making fewer trips and spending more prudently.
A Deloitte Research report says retailers with exposure to emerging markets such as China and India may be able to offset the weakness in the United States.
Global director Ira Kalish, said as consumer spending slowed in the US, it was speeding up in Asia.
The global economy was transforming from how it was during the past decade.
"US consumes, China produces and everyone's happy - that ... can't last forever," Kalish said, adding that the imbalance was "starting to unwind and will impact where spending growth takes place".
- Reuters
