Reports were published about the sales and profit margins of Bloomingdale's, Saks fifth Ave, Macy's, Home Depot and Walmart. All retailers showed profit from this quarter but surprisingly the higher end retailers showed much better results. Walmart accomplished there success by drastically lowering prices and increasing its volume, while the high end retailers, who targeted consumers with a larger disposable income, showed great profit margins. Terry J. Lundgren, CEO of Macy's was quoted, "making decisions between filling up their gas tank or buying shoes or a handbag, that consumer certainly is more impacted.” on the subject of why they netted more profit. Walmart's target market encompasses all levels of income, but primarily low income families. These families are effected much more by the weakened economy, while the wealthier classes are not and can continue to buy luxury goods. Macy's net income rose 12% from a year ago, and credited a lot of success to their promotions and free shipping to online purchases. Saks sale of luxury items net income was increased to 48% to $37 million. Home Depot's net income increased 32% to $774 million while sales rose 6% to $16 Billion. All companies showed profit.
This report shows how low income families are being effected by the economic state we are experiencing and how demographics and target markets are capitalized on by high end retailers.
No comments:
Post a Comment