Maryland retailers passing the seasonal test -- Gazette.Net


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Big retail boost
Spending nationwide for back to school provides the year’s second-biggest boost to retailers:
Christmas and other winter holidays: $471.5 billion, 2011
Back to school and college: $83.8 billion, 2012 projected
Mother's Day: $18.6 billion, 2012
Valentine's Day: $17.6 billion, 2012
Easter: $16.8 billion, 2012
Father's Day: $12.7 billion, 2012
Super Bowl: $11 billion, 2012
Halloween: $6.9 billion, 2011
St. Patrick's Day: $4.6 billion, 2012
Source: National Retail Federation

For a locally owned retailer such as Enkore Kids, competing against the Wal-Marts of the world for what experts say are more shopping dollars this back-to-school season can seem a bit overwhelming.

But the Boonsboro consignment store that caters to children has carved out a niche that has allowed it to thrive, said Jennifer Guenther. She founded Enkore Kids in 2003 in Frederick and later moved it to the smaller town between Frederick and Hagerstown.

The store is not the typical consignment shop, with almost 3,000 square feet full of clothing, toys, developmental games, homeschooling supplies, books and other items. The space includes a large enclosed play area and a restroom with a changing table. The business has about 3,000 more square feet for storage.

“We are very full with clothing,” Guenther said. “We’re doing at least the same as last year in sales, if not better. People are looking for bargains, and we have those here. Unlike many other consignment stores, we have a return policy.”

With the economic recovery still shaky and Maryland’s unemployment rate rising the past few months, getting the best value still is on the minds of many shoppers, said Patrick Donoho, president of the Maryland Retailers Association.

“Consumers have become very cognizant of what things cost,” he said.

Olympia Overton of Rockville did a lot of her school-supply shopping at CVS, using a 20 percent discount coupon and a further discount through an email list offer. She also purchased some clothing and backpacks at Target and Kohl’s in Gaithersburg for her three children — one each in middle school, high school and college.

“As for the actual school supplies, I got everything the kids needed at CVS for about $105 total,” Overton said. “Last year, I think I spent twice that amount at Target. But part of the reason is that I let the kids get more items that they thought they needed, and I didn’t have any discount coupons [last year].”

Back-to-school spending expected to climb

Even with shoppers emphasizing value, total national spending on clothing, notebooks, pens, paper, electronic products such as tablets and other items is expected to shoot up 22 percent over last year, to $83.8 billion, according to the National Retail Federation.

That includes spending for college students, along with kindergarten through high school. Some school districts, such as in Washington and Prince George’s counties, began classes this week, while others, including those in Montgomery and Frederick counties, start Monday.

What’s driving the spending jump is an increase in the number of back-to-school shoppers and more purchases of items that need to be replaced after a few years of use, Matthew Shay, president and CEO of the retail group, said during a conference call with reporters. More children are entering elementary schools, and more people are going back to college, he said.

“You’re pulling new people and new families into this back-to-school season,” said Shay, who expected that trend to continue in the next few years.

Confidence in the economy by consumers improved in the most recent survey to the highest level seen since before the Great Recession, said Pam Goodfellow, consumer insights director for BIGinsight, a research firm that conducted the survey for the retail group. But this year’s consumer confidence level still is some 30 percent below where it was in 2007, before the recession hit, she said.

“Unemployment continues to be a chief concern among consumers,” Goodfellow said. “Employment might be the ultimate challenge to reviving consumer confidence.”

Maryland’s unemployment rate hit 7 percent in July, up from 6.5 percent in February but still lower than a year ago when it was 7.2 percent. Nationally, the jobless rate was 8.3 percent in July, down from 9.1 percent a year ago.

Retail employment in Maryland dropped by about 2,000 jobs in the past year, counter to the national sector, which added some 91,000 jobs since July 2011.

A few stores have closed in Maryland this year, such as a Bloomingdale’s at White Flint Mall in North Bethesda, whose shutdown affected almost 200 employees. But such closings have been the exception in the state in the past year, Donoho said.

And there have been some significant openings in the past year, such as new Wegmans supermarkets in Columbia and Bel Air. Wisconsin retail chain Kohl’s Department Stores plans to open a new store in Aspen Hill next month.

“There may be some seasonal adjustment in the figures,” Donoho said.

Merchants’ seasonal hiring starts during the back-to-school season and really picks up before the winter holidays, Donoho said.

“Back to school is a very important time for us,” he said. “It gets shoppers back into the stores, after many have been on vacation.”

New promotions and partnerships

Retailers began pulling out new promotions in July and report good sales so far. Managers at Target in Rockville and Dollar Tree in Gaithersburg said traffic has been brisk as customers seek deals.

Office Depot, which has stores in Gaithersburg, Frederick and other Maryland cities, has seen more customer traffic than during last year’s back-to-school season, said Owen Torres, a company spokesman.

“It’s one of the busiest times of the year for us,” he said.

Office Depot’s back-to-school advertising campaign this year focuses on technology and designer supplies. Target and Wal-Mart have promotions that include donations to schools, product bundles and new online tools.

Old Navy, which sells backpacks, clothing and other school items, rolled out a partnership with OfficeMax, the first time the retailer has partnered with an office and school supplies business, said Julie Luker, a spokeswoman for parent company Gap Inc. In 2010, Old Navy partnered with hair-cutting business Great Clips, she said.

The promotion gave OfficeMax shoppers discounts at Old Navy and vice versa. Old Navy has stores in Bethesda, Wheaton, Hyattsville, Columbia and Greenbelt.

Luker said that Gap doesn’t comment on comparable store traffic, but the company’s sales rose 6 percent during the first half of this year from last year to $7.1 billion. Besides Gap and Old Navy, the company’s brands include Banana Republic, Piperlime and Athleta.

The online segment is really growing, with consumers not just buying more supplies and clothes online but comparison shopping by using mobile devices while in the stores, Goodfellow said.

“Shoppers are utilizing every channel they can to find the best deals,” she said. “Savvy shoppers are learning how to seek out coupons, sign up for text alerts from their favorite companies to receive instant rebates and even download applications that enhance the shopping experience.”

kshay@gazette.net