Classes have yet to let out for the summer but quite a few people in and around retailing are already looking toward the back-to-school season as the next test of just how well the business is coming along.
"I'm not arguing that business is going to be positive," Jeff Van Sinderen, a retail analyst with B. Riley, told Reuters. "I'm arguing the declines will start to moderate, that's what we'd like to see happen. If business is up, I'd be surprised."
"The question to me is the amount of the decline, and probably low single digits would be our guess," said Sandra Reese, principal at Grant Thornton Corporate Advisory and Restructuring Services, who also spoke with Reuters.
An emphasis on trimming inventory has some hopeful that while retailers may see a slight dip in year-over-year sales, they might be able to squeeze more profits from dollars spent. Recent reports have suggested that merchants are engaging in much less discounting than they had toward the end of last year and the beginning of '09.
Doug Hart, partner in the Retail and Consumer Product Practice at BDO Seidman, believes that short of serious financial problems, parents are going to spend on their kids for back-to-school. "It's discretionary spending, certainly, but it's not considered to be a luxury," he told Reuters.
Discussion Questions: What are you looking for in the upcoming back-to-school season? Do you think there will be any surprises? Will we see retailers doing things a bit differently to find the right emphasis on top and bottom line growth?