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JR Kniffen Worldwide CEO Jan Rogers Kniffen and MKM Partners senior retail analyst Patrick McKeever weigh in on retail sales a week before Christmas.
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Lauren.
Well.
Monday today is.
Free shipping day thousands of retailers have actually jumped on this trend their -- to boost those last minute sales before Christmas we are just one -- -- From the big holiday.
We're launching during this -- of markets now in this segment for the entire -- condit's stocking up.
Gave me at retail winners and losers ahead of the big holiday season joining us now Jen Roger -- JR -- on worldwide.
We also have a different Patrick -- -- and K -- Partners and -- a start with you're you know you're saying that one of the key things.
Not just today's free shipping.
Initiative by the big retailers but a big thing is the fiscal -- discussions.
You're just telling me if there is a deal in place on the -- That's good news for the retailers.
Actually think that I think that the upper -- retailers are really worried that their customer will decide not to spend because they're facing higher tax rates.
And the -- retailers -- concerned people may actually start to figure out that there are Social Security impact on their tax on their check is going to go up.
In two weeks.
And if it is I'm gonna have less suspend next year if -- 30000 dollar year Wal-Mart customer for instance.
Where your tax bill goes up by 600 bucks if they don't do something about the Social Security tax -- -- And that's a big deal -- your -- personal income so both sides of the fiscal cliff high end low end big problem.
If we get a deal and push this thing down the road a little bit.
It might not be great for the long term economy but it -- be good for the short term retail.
What retailers who book 25%.
Medal mom actually it's almost 40% -- annual revenues -- think about it in this part the -- -- Just let me ask you something -- Wal-Mart this free shipping and it's happening today in its.
It's most retailers but Wal-Mart is participating as wallet -- -- a minimum of 45 dollars or something like that is that a good thing for -- Patrick.
I mean -- you.
Yes and and no I think that it it speaks to the the urgency that is out there.
Across retail to really drive some traffic into the store is Black Friday a was pretty good.
But we have seen a -- In spending since then and I don't think there is you know there're there are two more days of Christmas shopping between Thanksgiving share Christmas this year vs last year so I think there's more procrastination out there.
And you're seeing him more more deals like this and and more aggressive promotional.
That's and that's fine but what about a name like target any target is on the list and I know the target is one a year top -- right now you think that target is actually gonna win overall in this kind of face to face battle if you will Wal-Mart.
I mean it it has been a top picks -- I was a little disappointed with the numbers in November target actually had a negative same store sales number.
In November was down about 1% but I think -- see -- a tick up a pick up an improvement.
In December and I think EMI call on target is really not so much about the holidays has.
You saw from my notes there I think this the holiday outlook overall is still pretty subdued I'm not looking for that much I'm looking for maybe one to 2% same store sales growth.
But as we move into next year target has a number catalysts.
Including this this Canadian store launch which will begin in the -- -- up a bunch -- sourcing.
Good candidates stand what do you say about target you agree or disagree with Patrick's assessment of the company over -- I'm on the other side of the fence I don't like the back negating all of.
They're -- for sales from the red card program.
It's a 5% discount pro permit -- gross margin that's where the sales are coming from the other big piece of their sales come from the I don't like the fact that -- put some more head to head against Wal-Mart some building that's good I personally think -- head to head against Wal-Mart is bad.
Those two firms drive most of the sales volume they're both low gross margin programs so longer term I think that works against them in the shorter term.
Targets better off after the fiscal cliff than perhaps they Wal-Mart are higher in guy because -- in the middle who are affected by the Social Security tax so much.
Or by the high end.
Tax on people like mean you -- com.
-- building better in the middle and target is in the middle unlike Wal-Mart is at the lower end it right now for Christmas now I'm not thrilled with what they're doing.
I think and I think you both agree that this next week is gonna be crucial for for all of the big box retailers and the secular which you both cover.
A straight -- to see how they got are gonna get our viewers at least a good snapshot this week how that they have the big names are doing a gentlemen thank you Patrick -- Jen Rogers no -- Want to thank you both for being here tomorrow we're gonna take a look everybody at our tech sector.
And stocking up we'll continue taking a look at the technology sector one of Dennis -- favorite topics oh yes.
