First quarter shows hint of retail challenges ahead

06/26/2009 02:27:44 PM
Tom Karst

Strategy

Spezzano said he expects aggressive ads by retailers this summer to drive sales, at the same time margins for some items may increase to compensate.

Spezzano said the economy has appeared to change the approach of produce merchandiser by creating more of a “high high low low” strategy.

He said one retailer recently told him that 20% to 22% of that retailer’s produce sales are normally ad features.

Recently, however, that percentage has climbed to 26% to 28%.

Because the percentage sold on ad is higher, the retailer has to make that difference up in regular pricing, Spezzano said.

Lutz said anecdotal evidence indicates the worst of the recession is over.

“From a consumer confidence standpoint, I would hope we would start to see consumers coming back to the department,” he said.

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