Times of financial crisis demand political leadership By Jan Teague, President/CEO
The retail industry has quickly responded to the slowdown in consumer spending. It's changed its hiring plans, its marketing strategies, and its inventory supplies. It has hunkered down to survive a protracted and slowing economy.
As the industry's state association, we, too, have responded to the change that is occurring. We have spent time this summer getting to know all of the candidates and put plans together to educate likely new legislators to make sure that each elected official knows about our principles and major concerns.
The association is an even more critical group in times like these. Our members all need to take part to make sure that legislators know how fragile the industry is right now.
I want to encourage you to help the association by contacting your elected officials after Election Day. Send them a congratulatory note, offer to have coffee, or just let them know that you are in their voting district.
The one great awakening that this economy has taught us is that business is necessary to keep the economy running. Otherwise, our communities don't have jobs for people and we don't create sales taxes for state and local governments to spend.
Everyone knows this delicate balance is what has made this a great country. But seldom do we experience an economic cycle this rocky and fragile. Let's be sure to communicate who we are this year to the political leaders who are about to make changes through their decisions on new regulations, fees, and taxes.
Your association will do its part to keep you informed. We will be working to develop a stronger communications system with you and the local media. We need a stronger story to tell this year, one that tells your story in the industry.
Already interested in telling your story? Let us know. We will come to your business, have coffee, and hear what concerns you. You can contact any of your association representatives.
I hope to hear from you some time this fall and winter. In the meantime, start by keeping a list of challenges. Think of stories that might be helpful for legislators to know.
And please encourage everyone to vote this year. Every vote matters.
WRA participates in identify theft summit Ideas to combat the problem are discussed
The Washington Retail Association participated in an identity theft summit hosted in SeaTac this week by Attorney General Rob McKenna.
About 100 loss prevention officers, law enforcement authorities, prosecutors and representatives of federal and state agencies participated.
Mark Johnson, WRA's Vice President of Government Affairs, was a co leader during a session regarding legislative strategies to combat identity theft. Several potential legislative concepts were brought forward in the discussion.
WRA will consider supporting: *Hiring a special state prosecutor for organized retail theft cases. *Creating an organized retail theft task force to better coordinate efforts m combating the growing problem for retailers.
WRA has logistical concerns with: *Requiring retailers to only print the last four digits of credit cards numbers on all receipts. *Using biometrics such as facial identification on all Washington state drivers' licenses. *Requiring Social Security identity verification before retailers could grant credit to customers.
Johnson pledged that the WRA would continue to focus on methods to protect consumers from identity theft while helping retailers strengthen their defenses against financial losses from organized retail theft, a trend tied to crimes including drug purchases and suspected in some terrorism cases.
"The retail association will continue to partner with the Attorney General to come up with creative and workable solutions that get at the root of the problems and avoid onerous regulations on retailers and their customers," Johnson said.
To learn more about identity theft and how to protect your business and customers against it, click here.
During the summit, Chuck Harwood of The Federal Trade Commission gave a presentation on the new national "Red Flags" regulation requiring creditors and financial institutions to develop identity theft prevention programs. WRA encourages members to determine if they are required to comply.
The Federal Trade Commission has delayed enforcement of its "Red Flags Rule" by six months, to May 1, 2009. Some affected businesses told the FTC they needed more time to comply with the rule.
The rule generally applies to businesses such as finance companies, automobile dealers, mortgage brokers and businesses that offer accounts allowing customers to write checks. To learn more about who is covered by the rule, click here. To read more about the delay in enforcing the rule, click here.
Sales and promotions dominate holidays this year
Another panel of retail analysts this week predicted the softest holiday shopping season nationally since 2002.
"We're looking for a 1.7 percent gain in November-December chain store sales," Michael P. Niemira, chief economist and director of research for the International Council of Shopping Centers, told a conference hosted this week by Dow Jones Indexes/Stoxx Ltd.
Niemira said shoppers would be exercising more caution this year due to pressures from higher food and fuel prices, the housing meltdown and the Wall Street financial crisis that led to a tightening of credit and lending.
"We don't think the consumer will walk away from spending," Niemira said. "The consumer will be more cautious."
Discounters and warehouse clubs are expected to drive most of the sales increases this year, Niemira said. Further, clothing, accessories and lower priced items will attract more shoppers than more expensive items such as computers and big-screen televisions, said Richard E. Jaffe, managing director and softline retail analyst for Stifel Nicolaus.
The two also predicted that holiday shoppers would start earlier this year because there are five fewer shopping days between Thanksgiving and Christmas and that electronics stores could see a 5 percent sales decline.
Meanwhile, the near-extinct practice of layaway (allowing customers to put purchases aside until they have paid for them in full) is making a comeback, the Wall Street Journal reports.
"While not sexy, layaway became the big idea for Kmart these holidays," said Mark Snyder, the chain's chief marketing officer. The newspaper reports that consumers either are saddled with too much debt or are determined not to be, which makes layaway an increasingly popular option where you can find it this year.
Layaway plans aren't free. Kmart, for example, charges a $5 service fee and $10 cancellation fee up front, or a 10 percent down payment on the item, whichever is greater, the newspaper reported. Customers must make biweekly payments and are allowed eight weeks to pay for the items.
The trend has led to several new layaway Websites. ELayaway, for example, offers iPods, laptop computers and clothing.
Michael Bilello, ELayaway's senior vice president of business development, told The Journal that traffic on his site has increased 91 percent compared to last year and that discount retailers have been calling about adding a layaway option to their Websites.
Sources: National Retail Federation; Wall Street Journal; Detroit Free Press
SBA urges temporary loan repayment delays
The U.S. Small Business Administration has asked lenders to grant clients a three-month deferral on loan payments to cope in the current national credit crunch.
SBA is reminding lenders they have the authority to extend temporary payment relief on a case-by-case basis for qualifying borrowers with 7(a) and 504 loans.
This year's credit crunch has made it more difficult for small businesses to make payrolls and purchase inventory.
"We recognize that small business owners are faced with challenging decisions right now," said SBA Acting Administrator Sandy K. Baruah. "By providing three-month deferments to qualifying borrowers who are struggling, our lending partners can help small business owners free up the capital they need to maintain their businesses."
SBA also is asking its lenders not to broadly call in borrower loans due to changing conditions such as fluctuations in personal credit scores and reduced home equities. Instead, Baruah pledged the SBA would work with borrowers and clients who need more than a three-month repayment deferral to arrange alternate repayment schedules.
Source: Small Business Administration
State DOT issues economic impact report from storms
Last winter's Puget Sound area flooding that closed many major roads wiped out 460 jobs and caused the loss of about $75 million in business and $18 million in damage to state highways, a Department of Transportation report has found. Much of that lost business was suffered by retailers.
The storm flooded and caused the temporary closures of Interstates 5 and 90.
The state compiled its findings from 2,758 surveys from the trucking industry and freight-dependent business sectors.
The Transportation Department is studying the findings to develop strategies in response to possible other disruptive events. Considerations include identifying detour routes, widening Snoqualmie Pass with more traffic lanes and building safe and legal parking areas for truckers who must stop working during floods and snow storms.
Source: Department of Transportation
Complaints rise against leasing companies
Retailers in Washington and the nation report a rising tide of companies selling expensive and misleading leases to operate credit and debit card processing machines.
The Seattle Times found 84 consumers complaints logged with the state regarding the practice and reported more than 680 complaints nationally with the Better Business Bureau.
Most of the Washington state complaints allege pressure sales tactics that trap retailers into costly leases with hidden fees. Other complaints report forgery, failure to provide promised services and aggressive collection practices, the newspaper reported.
The Times found that in some cases, suspect companies tended to release clients from their leases if they complained to the state Attorney General's Office.
The Federal Trade Commission and Washington state have sued leasing companies accused of misrepresenting their services, The Times reported. In one case, it reported, a New York State attorney is seeking a class-action lawsuit against one suspect company.
Source: The Seattle Times
Small business forums start this month
The Washington Policy Center will launch a series of six statewide small business forums later this month in Spokane.
The Washington Retail Association is a co-presenter of the series.
The forums aim to update small business owners on policy changes that affect their business operations. Attendees will hear from WPC research staff, hear a preview of the 2009 Legislative session and discuss how the November elections could affect them.
The $25 cost includes a meal and forum materials.
Locations include:
*Spokane, Oct 29, from 7:30 a.m. to 9:30 a.m., at the Spokane Red Lion at the Park. *Tri Cities, Oct. 30, from 11:30 a.m. to 1:30 p.m., at Red Lion Hotel - Richland Hanford House. *Bellevue, Nov. 12, from 7:30 a.m. to 9:30 a.m., at Bellevue's Red Lion. *Central Washington, Nov. 13, from 7:30 a.m. to 9:30 a.m., at Wenatchee's Red Lion Hotel. Register through Wenatchee Valley Chamber of Commerce. *Tacoma, Nov. 18, from 7:30 a.m. to 9:30 a.m,. at Tacoma's LaQuinta Inn. Register through Tacoma-Pierce County Chamber of Commerce. *Vancouver, Nov. 20, from 11:30 a.m. to 1:30 p.m., at Red Lion at the Quay.
The popularity of gift cards has steadily been growing for the holidays the past four years.
The average gift card user has increased holiday spending from $110 in 2004 to nearly $160 last year, according to data from BIGresearch for the National Retail Federation.
Other BIGresearch data regarding gift cards:
*Shoppers bought an average 3.7 gift cards last holiday season. *The average card purchased was for $41.95. *Department store gift cards are most popular, followed by restaurants, discount stores and bookstores. *Gift cards are used most frequently by shoppers age 25 to 34 and those age 65 and older.
Source: National Retail Federation
Safeway debuts solar-powered store
Safeway this week opened the first of 23 solar-powered stores it expects to operate in California.
The Simi Valley store in Southern California includes 742 rooftop panels that could provide 35 percent of the store's energy needs during peak usage periods, said George Waidelich, Safeway's vice president for energy operations. Over the 25-year life of the panels, the company thinks it can save about 10 percent of its energy costs, he said.
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The Washington Retail Association, WRA, is a 501 C 6 trade association formed to advocate for Washington State’s retailers at the local, state and national level. Since 1987, the WRA has protected Washington's retailers from unreasonable taxes, fees, regulations and legislation. The efforts of the WRA benefit all Washington state retailers and help fuel statewide economic growth.
