Black Friday

Star Wars May Make Us – Then Break Us

The human herds at the annual Black Friday Disgrace were lighter this year as retailers started early, spread out the sales, and put many of the same bargains online. Still, like a scene from the zombie apocalypse, America was at its worst.

Why would anybody allow themselves to be anywhere near a retail store at that time? Well, if you look carefully at the videos – not just at the “combatants” but the gawkers, the bystanders and the “fratboy film crews” – “for them, this is just entertainment.” (Michael Caine as Harry Browne).

Over the Thanksgiving weekend, perhaps the biggest loser was Target. Not only did they have slow store traffic, but this year, rather than then letting the hackers in, they just let the shoppers break their website. I can clearly imagine a stream of profanity featuring elongated o’s volleying around the Nicollet Mall.

Elsewhere around the web, online sales have been smoking hot as mainstream consumers seem to have switched from danger and doorbuster deals to “shopping on the sofa.” Cyber Monday was historically strong. The ladies in the Toyjobs’ offices were unusually quiet that day. I’m sure they outfoxed me with their superior computer skills. I never caught them, but I suspect they were quite “busy” – not that I care, as long as they get their work done.

I expect strong overall holiday sales. Consumer confidence has improved and gas prices are down so consumers have a bit more discretionary income to spend. Frozen merchandise has slowed down in the second half, but Shopkins and all sorts of R/C drones have been “flying off the shelves” (sorry). Star Wars merchandise is everywhere, but I’m told hasn’t really started selling in waves yet. It seems as if Disney is releasing the film at the perfect time to maximize box office receipts, but late in the day for the holiday shopping season. I think there will be a ton of Star Wars merch sold, but also expect a lot of inventory carry over. That could impact toy company hiring in the first half of next year.

Employment in the US economy at large seems to have hit its stride. There was a slowdown during the summer, which highly paid Wall Street analysts have used all sorts of esoteric jargon to explain. I would suggest that it’s a simple cyclical phenomena known as “late summer.” Since then, we have had three strong jobs reports in a row

Now if we could just get the economy growing beyond its currently anemic 2.1% rate. By definition, companies will have a lot of uncertainty until the November 2016 election so I don’t expect a step up in corporate spending until then.

As for toy industry hiring – at Toyjobs, we are really cranking right now. We have lots of ducks in the air and are just waiting for employers to pull the trigger. I think the toy industry is generally strong but I see Star Wars leftovers and uncertainty ahead of the US Presidential election as potential drags on toy hiring. We’ll have to wait and see how that plays out.

In the meantime, the very best for the holidays to one and all.

May the Force Be With Us,
Tom Keoughan

By | December 9th, 2015|ToyJobs Blog|Comments Off on Star Wars May Make Us – Then Break Us

Strong Jobs Report Bodes Well for Holiday Sales Season

Even though traffic was slightly down during the annual Black Friday disgrace, human herds were still out in force. Many seemed to be of the opinions that this is a special holiday where they can let their worst instincts show while others appeared to feel that they had a license for legalized “wilding.” We are saddened to hear that this American “tradition” had now spread to the U.K.

 

This year, there was the usual litany of fist fights, Barbie doll brawls, pedestrians run over by cars in retail parking lots, and women flattened by falling big screen TVs. We also had way too many reports of police officers assaulting shoppers above and beyond the call of duty. In the video above, you can watch as officers appear to needlessly takedown a rather harmless looking woman. You can also see a group of officers repeatedly tasering some poor guy who looks like he’s just trying to get away from being tasered…again.

Retailers endlessly promote this insanity to drive excitement, foot traffic, and impulse buying. They know exactly what’s going to be rampaging through their doors and if you get hurt, you should sue them. Of course, you might be asked to explain why you would put yourself in a situation like that in the first place.

It appears that at least some people are beginning to wise up. Brick and mortar traffic and spending over the Thanksgiving weekend fell as internet sales boomed. Retailers also started offering deals days and even weeks before the main event, which may have helped to dissipate the door busting intensity.

So while Thanksgiving weekend sales were down about 11%, overall numbers for the holiday sales season have been good. The scuttlebutt is that Wal-Mart is doing very well and all internet sales (not just Amazon) are particularly strong. The toy industry is being helped by having a number of hot product lines. Anything “Frozen” or “Teenage Mutant Ninja Turtles” is flying off the shelves. And, a couple of hot lines from Australia’s Moose Toys, namely Shopkins and Little Live Pets, are doing quite well.

Overall, the National Retail Federation is predicting a 4.1% increase in sales this November and December. This year, retailers have the wind at their backs. Gasoline prices are down, which puts more money in consumers’ pockets. The economy has had strong growth over the last six months. Job growth, which began to be noticeable in October 2013 is accelerating, as seen in last Friday’s blockbuster jobs report. The consumer sentiment index has been rising since early summer and consumers are beginning to take on more credit card debt. All of this bodes well for this year’s holiday sales.

http://si.wsj.net/public/resources/images/MK-CR045_SHOPPI_9U_20141127181811.jpg

Friday’s jobs report was the best we’ve seen in quite some time. Nonfarm payrolls added a seasonally adjusted 321,000 jobs in November and payroll gains for September and October were revised higher. The report also showed that wage growth is beginning to accelerate.

http://si.wsj.net/public/resources/images/NA-CD775_ECONOM_9U_20141205094523.jpg

I would caution employers that, for top performers, wage expansion is already here, particularly for key sales positions. Employers may be able to continue to tamp down salaries for your back office staff for a little while longer, but for VP of Sales and NAM’s at top accounts, that’s just not going to work. I’ve seen several clients do without because they don’t want to pay market rates for top sales talent. After the early 2015 trade shows as the toy industry hiring cycle switches to Marketing and Product Development, I expect to see wage pressure for the best people there, too. This might not affect wages for your number five Product Manager, but for top performers the pressure will be there.

Despite the accelerating improvement in the employment statistics, pain persists in a large part of the economy. In November, 2.8 million people had been out of work for more than six months. That’s about one third of the people who are currently unemployed. Also, approximately 7 million people were working part-time jobs because they couldn’t find full-time work. Hire these people. Help them if you can. But, don’t let their unfortunate situation cause you to think that you can continue to keep wages down for top performers. I have yet to hear a client say: “You know, don’t find me a top Target NAM from one of my competitors. Instead, find me one who has been out of work for a year.” If I heard that, I would probably fall out of my chair. Also, please remember, that as much as you’re looking to hire your competitor’s best people…your competitors are eyeballing yours. Things are getting better. You’re going to be forced to reward those people who are ready, willing, and able to run through brick walls. Things ARE getting better. You CAN afford to do so.

Here at Toyjobs, we have been running at warp speed since early August, successfully supplying our clients with the toy industry’s top talent. You can check here to see some of our most recent successes. The seasonal nature of the toy business causes it’s hiring cycles to be seasonal, so the larger share of our recent placements have been in the Sales field. Typically, we get a bit of a breather during the early part of the trade show season. I’m forecasting that after a successful holiday sales season, come late February, a lot of happy toy manufacturers will be looking to add to or upgrade their Marketing and Product Development departments. Ho! Ho! Ho! Let it be so.

Season’s Greetings,
Tom Keoughan

By | December 8th, 2014|ToyJobs Blog|Comments Off on Strong Jobs Report Bodes Well for Holiday Sales Season

Another Black Friday Disgrace – While Toy Hiring Soars!

Another year – another national disgrace as the human herds were once again rampaging through the nation’s retail outlets in what is little more than legalized wilding. While spreading out the bait over several days made the peak frenzy a little less intense, it also means that we now have four consecutive days of mayhem.

As usual, we had human (?) stampedes, knockdown merch, brawls, aggressively unnecessary pepper-sprayings, shotgun battles over parking spots, a guy stabbed while carrying home his new big screen TV, police officers being dragged by cars through parking lots, and a new low: kids having a stun gun fight in a Philadelphia mall.

Thank you Wal-Mart, Thank you Target, Thank you Best Buy, Thank you Kohl’s for inciting this dehumanizing behavior. If I or a member my family was foolish enough to venture out into these deal hunting scrums and became injured; you can be sure that I’d be having a phalanx of the most rabid attorneys around suing you for intentional reckless endangerment. I’m sure we could find a slew of other legal misdeeds as well (BLACK FRIDAY DEATH COUNT)http://s.wsj.net/public/resources/images/P1-BO270A_Econo_NS_20131206180603.jpg

More people were out participating in the melee than ever before, but on average, people spent less than last year ($407 vs. $423). Maybe retailers’ promotional activity pulled forward some holiday purchases earlier into November. Maybe, with smart phones at the ready, consumers are better able to make price comparisons and sniff out the best Black Friday deals. What does appear clear is that retailers have cut costs so much that it will negatively affect their margins and those of its suppliers (Wait? That’s us!).

In the meantime, toy industry hiring has soared. As reported here last time out, search starts rocketed in early October as children’s products started hitting the retailers’ shelves. Toy companies have been filling those jobs at a feverish clip which continues to this day. The pace will likely be maintained through year end. On January 2nd, the toy industry, as a whole, will board the planes for their annual pilgrimage to Hong Kong. This time out, a whole lot of business cards will be wearing fresh, wet ink.

The surge in hiring appears to be mirrored in the economy at large. Payrolls increased by a seasonally adjusted 203,000 in November. Earlier months have been revised upward and the job increases have now averaged 193,000 for the past three months.

http://www.washingtonpost.com/rf/image_296w/2010-2019/WashingtonPost/2013/12/06/National-Economy/Graphics/296GDP1206.jpgThat is nearly enough to impact the unemployment rate in a meaningful way. The jobs recovery has had false starts before, but this time it seems much more solid and sustainable.

Other economic data seem to support an improving outlook. Third quarter economic growth has been revised sharply higher to 3.6%. US consumer spending is up 2.1% from a year ago. Wages are up a modest 0.2% Consumer Confidence is on the rise and The Federal Reserve reported that credit card debt has risen to the highest amount in three years. All of those are hopeful signs that shoppers will be out buying more toys, Xboxes, and iPhones in the coming weeks.

I would like to see a few more months of improving economic data before declaring that the train has left the station, but it does appear that we are finally, finally gathering momentum. Remember folks, you heard it here first – all the way back in October…now if Washington can just stay out of the way.

It is my fervent holiday wish for the coming year that the economy continues to gather strength in a sustainable way and that there are more and more jobs for people who don’t have them and want them, especially the long term unemployed. God bless us, everyone!

All the best,
Tom Keoughan

By | December 11th, 2013|ToyJobs Blog|Comments Off on Another Black Friday Disgrace – While Toy Hiring Soars!

Another Black Friday Disgrace and Toy Industry Hiring Hits an Air Pocket

Things promised to get ugly as the annual orgy of spending by stampeding shoppers was set to coincide with a strike by Wal-Mart workers, but a number of factors came together to ameliorate what could have turned into a true national disgrace. Rather than concentrating all of their price cutting in one massive Black Friday push, retailers spread the bargains over a long super shopping week. Many stores even opened and started sales on Thanksgiving evening. Rather than door-busting human herds, consumers came sleepily staggering in like retail zombies when they should have been home, laying tryptophan sodden on the sofa, actively avoiding piles of dirty dishes.

Several retailers also had earlier starts to their layaway programs which surely eased Thanksgiving weekend traffic as well as locking in prices at earlier pre-sale levels. Online sales also had a broader time horizon as Cyber Monday grew into what could be called Cyber Two Weeks. Both online retailers and the web arms of bricks and mortar outfits have been racking up big gains. Online competition has been fierce as retailers use computer algorithms to adjust prices in real time.

While all this dampened the Black Friday frenzy, there were certainly enough wild melees, parking lot gun threats, “panty bar” cat fights and trigger happy pepper spray police to go around (Stampedes and Gun Threats During Black Friday).

Meanwhile, back on planet Earth – toy industry hiring, which has been quite strong since about April has suddenly slowed. My feeling is that this is temporary and that after negotiating this air pocket we will continue our long upward climb.

Toy industry hiring has always been very event driven with companies regularly putting off decision making on their staffing needs until the next: trade show, sales call, order confirmation, etc. Earlier in my career, I was always flabbergasted by this. “If you need a top Wal-Mart salesman, what does it matter what happens at the next golf outing?” Over time, I’ve learned not to judge and just accept reality for what it is.

Since we are in the midst of the all important holiday shopping season, it is only natural for toy companies to wait and see what happens. Many companies will also have new budgets beginning in January and three of the four most important industry trade shows take place in January and February which adds to the temporary standstill. These will pass like the pages of a calendar, but it is no surprise that toy industry hiring often slows at this time of year only to ratchet back up in March or April.

Much less certain is the outcome of the high speed chicken match going on in Washington, D.C. The brief spell of post election “happy talk” is now over. The two parties are as far apart as ever. In response, U.S. companies are scaling back hiring and investment plans at the fastest pace since 2009. Many companies have put together two 2013 budget plans for different outcomes to political negotiations over the impending fiscal cliff. Not only will going over the cliff probably throw the US (and global) economy into recession but it will be compounded by companies turning off the spending spigots.

Politicians of all stripes are up in their own heads trying to figger out which game theory scenario they like the best. Negotiate now or let it all slide over the fiscal cliff? Which helps me more? Which hurts him more? Who will get the blame? Never mind the economy or the public.

At the time of this writing there arn’t any substantial talks and the situation is in stalemate. Last week, Obama didn’t mention a “grand bargain” but rather “putting together a framework.” I think “framework” is code for “punt” and that things will be put off for six or twelve months. At that time we’ll be right back where we are now and things will once again devolve into gridlock and competitive finger-pointing. In the meantime, an economy that has been trying hard to recover continue sputtering along, once again left without enough fuel for takeoff.

Muddling through,
Tom Keoughan

P.S. – A recruiter, who we usually refer to as the Obvious Huckster in Ohio (OHiO) recently felt the need to publicly declare that he was indeed still in business. I guess nobody was quite sure. If you cross paths with him, I would suggest asking for references from five people that he has placed in jobs during the last six months. What you discover may surprise you…then again, it may not. 🙂

P.P.S – Lastly, I would like to share my condolences to all families and businesses adversely affected by the Superstorm Sandy. Personally, we took two feet of water into the first floor of our Hoboken home so I know what it feels like.

By | December 5th, 2012|ToyJobs Blog|Comments Off on Another Black Friday Disgrace and Toy Industry Hiring Hits an Air Pocket

Economic Uptick Spurs Stampeding Human Herds

Human herds were out in force during the four day long national disgrace presided over by Wal-Mart, Best Buy and their retail brethren. The long weekend “wilding” saw shopping devolve into a full contact sport replete with tramplings, taserings, shootings, various acts of police brutality and people robbing each other in the parking lots. Unfortunately, this seems to be the real “99%”.

At a Wal-Mart in Southern California a 10PM stampede turned ugly when a woman used pepper spray to “gain an upper hand” over her fellow creatures. Over twenty people suffered minor injuries as she attempted to clear a path to the electronics section. The woman has since turned herself in but, as of this moment, Toyjobs has been unable to determine whether she was indeed an active member of the Oakland police force – another national disgrace.

In Pennsylvania, it was reported that “girls(?)” AND their mothers were shoving and punching each other in a melee at a Victoria’s Secret outlet. We can only imagine that this will inspire the next big late-nite cable TV reality show. New Jersey officials were heartened by the fact that their cultural ambassador – Snooki – was not involved. Retailers were “pleased” with the strong start to the holiday shopping season, According to the National Retail Federation. Total sales over the four days grew 16.4% and individual consumers spent an average of $398.62 up 9% from last year. Online sales were extremely strong for the entire period as well as Cyber Monday.

Black Friday is a notoriously poor indicator of sales for the entire holiday shopping season and some analysts are warning that this could be only a temporary bright spot rather than a true revival of the consumer economy. This gloomier interpretation says that short-lived deep discounts merely pulled forward from December sales and that price slashing is the only thing that can encourage cash-strapped consumers to spend and that they will shut their wallets again now that the deals have gone. My gut tells me that those human herds aren’t exactly the types that are able to adhere to a budget. I think they will be ready to stampede Pamplona style whenever retailers wave their red capes.

On the bright side, retail sales have risen for six months in a row. Even Wal-Mart broke a two year stretch of same-store sales declines by growing 1.9% in the third quarter but this came at the cost of lower margins. More deep discounts mean lower profit margins for retailers who will, of course, pass that on to their suppliers through auctions and price beat downs. That is reflective of what I continuously hear from senior toy executives: “higher sales but lower margins.” Also, retailers brought in very lean inventories and that could limit upside potential if holiday demand continues to be strong. The scramble is now on to get more goods out of domestic manufacturers and those with domestically warehoused product.

After a June/July slowdown, since early August the US economy has been improving slowly but at an increasing rate.The November unemployment rate fell from 9% to 8.6% while payroll growth accelerated to 120,000. The difficulty with the jobs report is that it is actually two reports: the unemployment rate is based on a survey of 60,000 households while the jobs number comes from a different survey that covers the payroll records of about 140,000 businesses. The payroll number is less volatile and widely viewed as the more reliable of the two. The sharp drop in the unemployment rate was partly due to a shrinking labor force which suggests that some unemployed people have become discouraged and stopped looking for work. Once they start searching for a job again the unemployment rate could tick higher. Meanwhile, payroll growth of 120,000 remains well below the level that most economists consider consistent with a strong economic recovery. In addition, payroll numbers were lifted last month (as they will be for the next two) by temporary holiday retail hiring. Taken together the jobs report does signal improvement but not as much as headlines suggest.

As the US economy continues to slowly improve, the European debt crisis is the joker in the deck. The euro is now close enough to going off the rails that Angela Merkel and other European “leaders(?)” are now less focused on provincial politics and finally closing in on a solution. The Cliff Notes version is that Merkel supports European Union treaty revisions which would force debtor nations to fix their financial problems. This is, of course, the long term solution but ignores the crisis that it upon them right NOW. The rest of Europe is looking for a “backstop” or lender of last resort to guarantee all debts. That would likely be either a European Central Bank declaration or the issuance of Eurobonds for which all EU members would be liable.

In either case, the weight would fall heavily on Germany’s shoulders because they have the strongest economy and have behaved in a fiscally responsible manner. Bailing out the basket cases of Southern Europe doesn’t play well in domestic German politics. Think of it like the displeasure that responsible US households would have at being told to pay higher taxes in order to bail out people who took a flyer and “bought” a house that they couldn’t possibly afford. True, many American households are in trouble because someone lost a job or got sick or are underwater due to the housing market meltdown. Everyone seems to be able to get their minds around that sort of thing. Germans see a completely different type of situation in the irresponsible behavior of the Greeks not paying their taxes and then retiring to the government dole at age 50.

The truth is that Europe is like America. It needs both a long term fix AND short term crisis relief. In Europe’s case the clock is ticking down to a matter of weeks and with their backs to the wall, they finally seem to be looking at a two-pronged approach. Once the ticking time bomb is taken from the room, US markets should stabilize and the economy should continue to move forward. That said, in the US it appears as is nobody is prepared to act like a grown up until after the upcoming election. Fortunately that is less than a year away.

In the toy industry, search starts have remained strong and some companies have actually been hiring while others continue to play “hurry up and wait” even after they have selected a candidates. I suspect that decent holiday sales numbers will lead toy companies to have an increased sense of stability spurring somewhat larger budgets. This should lead to continued strength in search starts and companies feeling more confident in actually completing a hire. Things are getting better faster but…

Muddling through,
Tom Keoughan

By | December 7th, 2011|ToyJobs Blog|Comments Off on Economic Uptick Spurs Stampeding Human Herds

Retail Zombies and Statistical Aberrations

The Human herds were out in droves like something out of a cheap zombie flick as the Thanksgiving weekend kicked off the holiday shopping season. Although the lack of “door buster deaths” could be considered a negative indicator; retail chains reported strong customer traffic and increased per capita spending. According to the National Retail Federation, the average shopper spent $365.34, up 6.4% over last year. Weekend web and Cyber Monday web sales also set new records.

After several years of relative thrift shoppers may be parting with their money more willingly simply due to pent-up demand which retail analysts have been calling “frugality fatigue.” That said, consumers have been trained to only shop for bargains. We may see the Thanksgiving weekend spike fade as shoppers wait to see if retail prices come down before buying, leading to a second spike right before Christmas. Let’s just hope that everyone buys more Dance Star Mickey’s and Squinkies than they do iPads and Microsoft Kinect Systems.

The toy industry is expected to have a solid up year and that should translate into increased toy industry hiring for 2011. Most observers were surprised by the increase, from 9.6% to 9.8%, in November’s unemployment rate and several economists have called it a statistical aberration after the positive jobs trends of September and October. It seems that after seeing the strengthening employment environment many people previously too discouraged to even bother looking for work – “entered the job market” therefore driving the percentage of unemployed job seekers even higher. However, if you look at a wider variety of indicators, the overall trend continues to show steady, if unimpressive, improvement.

Hours worked and wages have been rising (although they were flat in November). Both measures tend to foreshadow future job growth. As we have seen, consumer spending is up. Third quarter results from Visa, Mastercard and American Express showed US consumers spending approximately 13 per cent more than last year. Consumer sentiment rose in November to its highest level since June. November Job postings on Monster were up 22%. Lastly, the government revised jobs data for September and October to show stronger numbers than previously reported. It would not be surprising to see November’s numbers revised upward as well.

Anecdotally, here to Toyjobs, we have seen search starts pick up sharply beginning in the second half of October. My impression is that coming out of the depths of 2009, few companies budgeted for much, if any, hiring during the current year. When they found themselves in need of people they would start to look, they would interview, but would then find some way to postpone actual hiring. Now that the economy has stabilized and is growing albeit very slowly – they are looking to shore up their rosters and have that in their budgets for 2011. That does not mean that I foresee a wave of wholesale hiring but rather that companies are now looking to fill the holes that in 2010 they left vacant. This is the employer version of pent-up demand.

The US economy is firing on more (but still not all) cylinders and the recovery is just beginning to pick up steam. That said, there’s still a chance that it could disrail as many employers remain cautious about hiring due to the uncertainty over taxes, new health care and environmental laws, etc. Nancy Pelosi and Harry Reid appear to be oblivious to the “shellacking” they took in the recent elections. Fortunately most of the Democrats and President Obama (despite what he says publicly) seem to get it. It looks like in the next week or so we will see a compromise bill passed which will forestall any and all tax increases for a period of two years. Unless Congress acts, tens of millions of people could see their withholding taxes go up in January. That could dampen household spending and further weaken employment and the fragile recovery.

In the interests of full disclosure, I am an independent who has voted Democrat more often than not. I generally (but not always) admire Democrat’s social goals but often find myself concerned about the unintended consequences of their proposed actions. With the economy at a tipping point this is no time to be raising any kind of taxes on anything and definitely no time for continued uncertainty. If you’re going to make those kinds of changes, do it during “good times” so that the system can better absorb them. Once we get the economy steadily growing again, tax revenues will rise and it will be easier to attack the deficit. If you can get rid of all the agendas, dogma and histrionics (fat chance!) it pretty much becomes common sense – Econ 101. I’m going to shut my mouth now, before I get into any more trouble.

Muddling through,

Tom Keoughan

 

P.S. Sorry, I just couldn’t help myself from taking one last stir at the pot. In the last couple of weeks, Isaac Larian of MGA Entertainment had publicly accused the Toy Industry Association of being prejudiced against him and his firm. While I can’t speak either for or about TIA or MGA; I’m not sure that prejudice is always such a bad thing. I oftentimes find myself biased against working with nasty, unethical people and/or the companies they control. Is that wrong? I don’t think so.

By | December 8th, 2010|ToyJobs Blog|Comments Off on Retail Zombies and Statistical Aberrations

Foot Traffic Increases But Spending Slows

Over the Black Friday weekend, massive human herds were out in force but retailers pacified them with electric fences, cattle prods and lots of large blue salt licks scattered about.  It seems that even though foot traffic increased; the hordes were spending less on a per capita basis than even last year’s poor numbers.  Is it possible that these creatures spend more when they have been whipped into a full frothing frenzy?  Needless to say, I wasn’t to be found anywhere near any retail outlet for the entirety of the greedfest.

Weekend sales were balanced by a surge in both sales and traffic on Cyber Monday. Forrester Research projects that holiday season online shopping may grow from 6% to 10% of all holiday sales.  Even with this growth, online sales are still too small to push the overall sales needle by much and a lot of the increase may simply be the result of cannibalization of bricks and mortar sales.  This may portend a long term shift in consumer patterns more than it actually affects sales volumes today.  Employers may be concerned that most of this online shopping takes place during office hours which echoes trends seen at Toyjobs where our analytics show that our job board is accessed mainly during weekdays and drops off significantly during evenings and weekends.

It’s important to remember that Thanksgiving is a notoriously poor predictor of sales for the holiday season as a whole.  It is typically eclipsed by the last weekend before Christmas.  This year there is concern that light retail inventories will mean that there won’t be many choice goods left on the shelves by that time.  The most widely cited forecast for this year’s season calls for a 1% decline in holiday sales from last year’s already weak showing.  Furthermore, a 2005 study shows that retail forecasters have a tendency to overestimate sales.  All this leaves me with little solid footing in guessing (and that’s really what it is) where retail sales will end up.  I think it’s pretty clear that it won’t be “good”.  It just remains to be seen how “bad” they will turn out although I don’t think the end result will be disastrous.  We’ll just have to wait and see.

Last Friday’s jobs data seem to indicate that we may be beginning to turn the corner on the employment front.  Jobs lost in November were down to 11,000 (a drop in the bucket considering the size of the population) and the unemployment rate drifted lower from 10.2% to 10% (still incredibly bad).  Significantly, U6 (a broader unemployment statistic which includes: the underemployed, part timers, “consultants” and the totally disheartened) has gone from 16.3% all the way down to 12.2%.  While those numbers are an improvement, one month does not make a trend and economic indicators don’t usually travel in a straight line.

When you consider everyone affected by unemployment (spouses, kids, dependent elderly parents), the “percentage of the affected” is huge.  Throw in that one in eight Americans is currently benefiting from some sort of food stamp program and it becomes quite clear that we are a very long way from being out of the woods.

Anecdotally, Toyjobs has found that things are continuing to improve.  In fact, I would say that the improvement curve has steepened in just the last few weeks.  A year ago, when we would call longstanding clients about possible job opportunities – they would just laugh.  Currently there is a lot more chatter.  This hasn’t shown up on our jobs board as of yet, but I predict that it will over the next six weeks.  We have a lot of outstanding unsigned search contracts out there (these are contracts sent to clients at their request but not yet signed and the search not yet started).  Also we are having a lot of discussions with companies getting ready to start searches but waiting to see how holiday sales and the January Hong Kong Toy and Games Fair pan out.  What is less spoken of, and is probably the Joker in the deck, is how banks will deal with loans and lines of credit.  Things seem to be slowly loosening up but I still have a hard time believing that seasonal fashion businesses are on the top of anybody’s lending list.  I’m not yet ready to say that I’m cautiously optimistic.  I am more comfortable with the phrase – optimistically cautious.

Happy (?) Holidays,

Tom Keoughan

By | December 8th, 2009|ToyJobs Blog|Comments Off on Foot Traffic Increases But Spending Slows

‘Tis the Season for Statistical Confusion

It’s time again for the annual swirl of confusing numbers emanating from retailers and Wall Street’s retail analysts.  Retail traffic was up on “Black Friday” and the post holiday weekend, but the average consumer spent less, an average of $347 down from $360 a year ago.  Surveys showed that the average person had completed 36% of their holiday shopping which is equivalent to last year.  All this seems to indicate that this year we had a better gauge due to a larger statistical sample which seemed to show that consumers will be spending less this Christmas.

But all the hype and hoopla which surrounds the day after Thanksgiving exaggerates the extent to which it predicts total holiday sales.  There are plenty of people, like me, who wouldn’t be caught dead anywhere near any retail establishment (with the possible exception of the wine shop) at any time during the entire weekend.  “Black Friday” and the following weekend are the shotgun start to the high shopping season – not a predictive bellwether. 

Here’s where things get really confusing.  If you look at the following chart, it’s easy to see that total November sales were very strong.  Unfortunately, comparisons are difficult.  There was an extra “shopping week” at the end of November which skewed total sales numbers higher and that extra “shopping week” will be lost when we examine December sales.  Also both store traffic and sales volume dropped off after Thanksgiving weekend.  We should also consider that due to the long “indian summer”, throughout much of the nation, that a significant portion of the spending went toward warmer clothing.

Bargain-Hunting Season  
Retail sales for November 2007  
 

Total November sales

 
Discounters

In millions

Chg. From year ago

Comparable stores chg. from year ago

Wal-Mart*

$31,718.0

+8.4%

+1.5%

Target

5,972.0

+16.7

+10.8

Costco**

5,720.0

+13.0

+6.0

Department Stores   
Macy’s

2,713.0

+13.9%

+13.4%

Kohls

2,023.2

+20.0

+10.2

J.C. Penney***

1,709.0

+5.8

+2.6

Nordstrom

804.9

+7.4

+8.7

Dillard’s

559.3

+2.0

+1.0

Neiman Marcus

360.0

+8.7

+5.8

Saks

347.6

+26.3

+25.7

Apparel   
TJX

1,800.0

+10.0%

+7.0

Gap

1,540.0

+11.0

0

Limited

858.7

-8.4

-7.0

Ann Taylor

209.2

+12.2

+3.9

Teen Apparel   
Abercrombie & Fitch

352.3

+25.0%

+2.0

American Eagle Outfitters

285.8

+16.0

0

Sources: the companies; WSJ Data Group  

  *Comparable sales for U.S. stores only, excluding fuel sales

 **Comparable sales for U.S. stores only

***Department stores only

What people are buying is of particular concern to toy manufacturers.  There were an awful lot of “Guitar Hero” games and Nintendo Wii’s (do we count those as toys?) moving out the doors.  Generally consumers seemed to be focused on AWAP (Anything with a Plug).  There doesn’t seem to be any “gotta have it” product driving people into the toy aisles this year and that controversial last minute Ecology Center study trumpeting that over one third of toys contained dangerous chemicals certainly didn’t help.

So where does all this leave us.  It seems that thus far, total holidays sales appear to be strong BUT a larger percentage than normal of total holiday sales has been counted.  Sales seem to be slowing BUT we still have the two crazy final weeks of holiday shopping to go.  I think its best to cross your fingers, close your eyes and hold on tight.  There’s not much we can do about it now and soon enough we’ll find out where we’re heading.

Happy Holidays!

Tom Keoughan

By | December 10th, 2007|ToyJobs Blog|Comments Off on ‘Tis the Season for Statistical Confusion