Posted: Thursday, August 14th 2014 at 4:42pm
Stores have a solid start to back-to-school season
By The Associated Press
NEW YORK (AP) -- The back-to-school shopping season is off to a promising start, but retailers may be sacrificing profit for sales.
The National Retail Federation expects the average family with school-aged children to spend $669.28 for back to school items, up 5 percent from last year. That would be the second-highest amount since the industry trade group started tracking spending in 2004.
But major retailers like Wal-Mart and Macy's are discounting merchandise and increasing spending to upgrade their stores and websites just to grab the attention of U.S. shoppers during the second biggest shopping period of the year. All that discounting and investing has worked to start the season off strong, they say, but it also hurts their bottom lines.
"Stores are going to have to invest in price and e-commerce aggressively in order to be competitive," said Ken Perkins, president of RetailMetrics LLC, a retail research firm. "The pie is not growing, and they've got to do everything they can to keep them from losing market share."
Meanwhile, Wal-Mart announced Thursday it is cutting its profit outlook. (See link below.)
Link: Wal-Mart cuts profit outlook
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