While the calendar has not yet turned from July to August yet, the onslaught of back to school shopping commercials have commenced, and early signs indicate it will be a brutal battle amongst the nation’s largest retailers to get the shoppers in store and spending as soon as possible.
Stores like Target (NYSE: TGT), Wal-Mart (NYSE: WMT), JC Penney (NYSE: JCP), and Sears (NASD: SHLD) all have high hopes pinned on customers shopping early and often, to provide a much needed boost to their third quarter same store earnings profile. The battle this year is particularly important for struggling retailers JC Penney and Sears, who are on the ropes after multiple quarters of disappointing earnings. Having a profitable year is critically important for those firms as they have hemorrhaged cash in recent years.
Less dire, but no less important, is the battle between Target and Wal-Mart for retail supremacy. Target has expanded in Canada, making a venture into potential new avenues of profitability. “This is Target’s first back to school season here in Canada, and we are excited to show our Canadian guests our vast product assortment and incredible value,” said John Morioka, senior vice president, merchandising, Target. “From new back-to-school clothes to bedding and dorm room accessories, students can display their personal style, even if on a budget, and still have the quality our guests have come to know and love.” From August 13 to 19, Target will invite parents to upload pictures of their kids showing off their unique style on the #KidsGotStyle Facebook app. During that week, Target will create an inspiration gallery, including items and supplies inspired by the photos received. Select guests who participate will be chosen at random to win one of 100 $50 Target gift cards and a grand prize of one $1,000 Target gift card to help cover their back to school needs. To make back-to-school and college shopping more affordable, guests who shop with their Target REDCard will receive 5 percent off their entire purchase as part of the ongoing REDCard rewards program.
The back to school shopping is not aimed merely at clothes for children – it is now all encompassing right up through college years, meaning the consumer spending is not just on the lower priced textiles, but also on the higher priced electronics, creating a boom period in August rivaled only by the November and December holiday shopping period. The retailers have a lot riding on this quarter, and the results may very well give insight into who will still be here a year from now, and who will be the leader in the field.
