Brighter Days Ahead for Retail in 2010

Retail economists now predict solid growth for 2010. The International Council of Shopping Centers projects annual sales will increase 3% to 3.5%, the biggest jump since 2006. “It’s a story of the turning of the corner for the retail industry,” said Michael Niemira, the group’s chief economist. “We are probably now outside of the recession, and getting the first slow recovery.”

“There is more stability and more visibility,” Macy’s Chief Executive Terry Lundgren said in an interview. “Last year, it was like we were all falling off a cliff, grabbing for vines to catch on to something, because we couldn’t really see what was happening.”

The less-is-more strategy is expected to continue well into this year as merchants cautiously move forward in light of continuing high unemployment and a recent spike in energy prices that is reducing consumers’ disposable income.

Maintaining high fill rates and carefully watching inventory on hand will be critical for success in 2010. EDI 852 provides the raw materials necessary to analyze sales and inventory on hand, however vendors will need to be diligent in analyzing and working with replenishment managers to ensure out of stocks do not occur.

Take action now:
1. Identify your A and B stores by sales volume.
2. Perform an out of stock analysis for A and B stores for your top SKU’s.
3. Review your fill rate for these stores/SKU’s and take any corrective actions necessary.
4. Work with your replenishment manager to ensure order min/max will support expected sales and avoid out of stocks.

Additional resources:
· Detailed instructions for store analysis and out of stock analysis can be found here
· Tools for analyzing EDI 852 can be found here

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