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In the aftermath of the National Association of Chain Drug Stores-sponsored Total Store Expo exhibit show and business conference, held in Boston late last month, one long-held view was fortified by both the retailer and supplier communities: Business at retail is in the doldrums.
Determining why is no easy task. True, the economy has been slow to recover from the recession of 2008, but consumers still need the basic merchandise that mass retailers sell.
True, too, is the fact that housing and home remodeling are two industries that have suffered. Nonetheless, both new-home construction and remodelings have rebounded, if not dramatically at least moderately.
True as well is the fact that many of the major mass retailers have struggled of late, sidetracked by internal glitches or momentarily distracted by high-level personnel shifts, the unveiling of new retail directions or the inevitable confusion that follows a major acquisition.
But, these distractions not withstanding, many positive developments have come to the rescue of the retailing community during these last few months.
For one, several leadership positions have been filled, and the majority of these have strengthened the companies involved. Then too, several new retailing strategies have been introduced, again with a hugely positive spin.
As one example, Walmart’s new emphasis on smaller formats will almost certainly help a retailer that had perhaps become too closely tied to and dependent upon its Supercenters to sustain its growth.
For another, whatever happens in the battle for Family Dollar — Dollar General and Dollar Tree are currently bidding for the company — the dollar store business will almost certainly benefit from the inevitable consolidation to follow. Though the trade class’ store count may well be reduced, at least initially, the industry itself will emerge as a stronger entity.
Then there’s the Rite Aid story, a truly remarkable tale of recovery and redemption when observers had mostly predicted the demise of the Camp Hill, Pa.-based drug chain. Behind Rite Aid’s turnaround was a remarkable directional change, one that brought forth an emphasis on health care that had apparently been missing in the retail industry. Helping as well was a dazzling new format, one that has both simplified the customer’s task of traversing a drug store and made that task more appealing.
In another direction, CVS, true to its word, has officially stopped selling tobacco products. And the positive response to that decision, in health care terms, is even now casting a rosy glow over this health care retailer, a glow that will likely remain even after the loss of sales is officially toted up. Indeed, it was inevitable that one retailer quit selling cigarettes. That CVS has become that retailer can only simonize it for the huge majority of its customer base.
Other positive indications of reviving retailer health abound. Why, then, is business so sluggish in advance of the Christmas selling season? One answer put forth with increasing frequency is this one: the lack of excitement at store level.
If this is true, as it appears to be, responsibility must be shared between retailers and suppliers. If the former have failed to generate sufficient interest and excitement in their stores, the latter have hardly provided the tools to do so.
Apparent at Total Store Expo was the absence of significant innovative ideas, programs and products, breakthroughs which would effectively return customers to stores in meaningful numbers. This absence of innovation could be found everywhere in the supplier community, from large companies whose idea of a new product continues to be a line extension to smaller enterprises that spend more time trying to secure appointments with their retail customers than they do in planning what to present when these appointments are granted.
So here we are, three months before the retail community’s most important holiday, two months before the onset of the critical holiday selling season. Unless something dramatic happens, unless retailers and suppliers can get together for the good of both, the holiday selling season that will shortly begin will not end well.
