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Shoppers to retailers: ‘We’re back!’

Phil Wahba
By
Phil Wahba
Phil Wahba
Senior Writer
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Phil Wahba
By
Phil Wahba
Phil Wahba
Senior Writer
Down Arrow Button Icon
February 25, 2015, 1:25 PM ET
Exterior pictures of Target store in Cloverdale Mall
Photograph by Getty Images
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At long last, shoppers are heading back to stores, judging by a slew of earnings reports this month from retailers.

For years, big retailers from Target (TGT) to Wal-Mart Stores (WMT) and Walgreens (WBA) to J.C. Penney (JCP) have been grappling with declining shopper traffic as U.S. consumers pulled back on spending, and high gas prices made them think twice about driving far.

But last week, Walmart US reported its first quarterly increase in store visits in more than two years, with traffic rising 1.4%. At Target, the company said on Wednesday that traffic rose 3.2% and CFO John Mulligan told investors on a conference call today it was the biggest reason for its big sales jump during the key holiday quarter, when comparable sales rose 3.8%. (Though it was an easy compare- a year earlier, Target was dealing with a shopping exodus after a data breach hit as many as 70 million customer records.)

It was the same story at Dollar Tree (DLTR) and T.J. Maxx owner TJX Cos (TJX), which also reported jumps in shopper traffic for the holiday quarter.

Retailers are benefiting from the confluence of the lowest gas prices in about 5 years, record consumer confidence, and rising wages. (In fact, Walmart is raising its entry pay levels in part because of market pressures.)

But they’ve also helped themselves too, by leveraging the very thing many used to dread as the potential cause for their downfall: e-commerce.

Home Depot (HD) told Fortune this week 25% of customers who come into a store to pick up online order then buy some more. Last week, Nordstrom (JWN) said that enabling its Rack discount stores to handle returns of online orders had led to million more shopping trips to its 150-plus Rack stores in 2014. Elsewhere, Walmart is working on in-store pickup of online grocery orders.

Which all goes to show, if you give shoppers a reason to come to stores, and add convenience, they just might show up.

About the Author
Phil Wahba
By Phil WahbaSenior Writer
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Phil Wahba is a senior writer at Fortune primarily focused on leadership coverage, with a prior focus on retail.

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