Back-to-School Shopping Still Underway
Across the country kids are heading back to school in less than two weeks and some are in school already. Yet back-to-school shopping is still underway, according the National Retail Federation (NRF). According to the NRF’s annual survey conducted by Prosper Insights & Analytics, the average family with children in grades K-12 has completed almost half (48 percent) of their shopping as of early August, slightly down from last year (50 percent).
“It is evident that many families are still considering price and value when shopping for their back-to-school and college needs,” said Matthew Shay, NRF president and CEO. “Shopping early and often is a trend we have seen from many budget-conscious consumers over the last few years. In the weeks ahead, parents will take advantage of the aggressive deals that retailers will offer as they get ready to welcome the fall season merchandise.”
According to the survey, only 13 percent of families with children in grades K-12 have completed their shopping lists as of August 17 when the NRF announced it results. However, 22 percent of families have yet to start their shopping, up from last year’s 20 percent. For the first time, the survey asked consumers which back-to-school items they still needed to complete their shopping list. According to the survey, 77 percent need to buy school supplies, followed by clothing (70 percent) and shoes (57 percent).
According to the NRF, 48 percent of parents are influenced by coupons, up from 43 percent last year and the highest in the survey’s history. Families will also take advantage of in-store promotions (39 percent) and advertising inserts (33 percent) to complete their shopping lists. For those who started shopping early, half (50 percent) of their purchases were influenced by coupons, sales, and/or promotions.
The survey found that 64 percent of supply purchases for back-to-school are influenced by school requirements, which obviously leaves no choice for families. In addition, 45 percent of parents buying electronics were influenced by their schools.
When it comes to where consumers will finish their shopping, 53 percent will head to discount stores, 51 percent to department stores, 39 percent to clothing stores, and 37 percent to office supply stores. More will shop online this year, 31 percent compared with 27 percent last year, the highest in the survey’s history.
When asked what payment method families will use most often to complete their purchases, 49 percent will use their debit cards while 29 percent will use their credit cards. Cash (21 percent) and checks (2 percent) will hardly be used as primary forms of payment, reaching the lowest levels ever in survey history.
Walmart Reports Q2 2017
Walmart reported its second quarter 2017 results last week. Highlights are listed below.
“We’re pleased with the positive momentum in our business,” said Doug McMillon, president and CEO, Wal-Mart Stores, Inc. “Our strategy in the U.S. is working as we delivered an eighth consecutive quarter of positive comps, and international also performed well. We remain focused on building e-commerce capabilities globally and executing our omni-channel plan, as evidenced by our recent alliance with JD.com in China and agreement to acquire Jet.com in the U.S. Walmart is uniquely positioned to provide customers with a seamless shopping experience where we save them time and money.”
Walmart announced the following highlights for Q2 2017:
- Diluted EPS was $1.21. Currency negatively impacted EPS by approximately $0.03.
- Adjusted EPS of $1.07 excludes a non-cash gain of $0.14, net of tax, from the sale of Yihaodian in China.
- Total revenue was $120.9 billion, an increase of 0.5 percent. On a constant currency basis, total revenue was $123.6 billion, an increase of 2.8 percent.
- Walmart U.S. delivered positive comp sales for the eighth consecutive quarter, up 1.6 percent, driven by the seventh consecutive quarter of positive traffic, up 1.2 percent. Neighborhood Market comp sales increased approximately 6.5 percent. Net sales at Walmart International were $28.6 billion. Excluding currency impacts, net sales were $31.3 billion, an increase of 2.2 percent. Globally, on a constant currency basis, e-commerce sales and GMV increased 11.8 percent and 13 percent, respectively, representing an acceleration from the first quarter.
- Consolidated operating income increased 1.6 percent, including a gain of $535 million from the sale of Yihaodian. Excluding this gain, consolidated operating income declined 7.2 percent. As expected, investments in people and technology, as well as currency exchange rate fluctuations negatively impacted results.
- Year-to-date operating cash flow was $14.9 billion and free cash flow was $10.3 billion, both approximately $5 billion higher than last year primarily due to improved working capital management, including significant inventory improvement, and timing of payments.
- The company now estimates fiscal year 2017 adjusted EPS of $4.15 to $4.35, or GAAP EPS of $4.29 to $4.49, both of which include an estimated dilutive impact to EPS of approximately $0.05, primarily in the fourth quarter, as a result of expected operating losses and one-time transaction expenses related to the planned acquisition of Jet.com. The adjusted EPS guidance excludes the non-cash gain of $0.14, net of tax, from the sale of Yihaodian.