US: Industry cautious ahead of Q4

Execs are scaling back this festive season after poor sales last year.
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Execs have told the Reuters Retail and Consumer Summit that in order to limit profit-sapping discounts on unsold merchandise come January, they are planning more conservatively this year.

Toys R Us chief exec Jerry Storch, said: "It's only common sense to be cautious, given the uncertain outlook for the economy.

"My belief is that many retailers ended up with too much inventory last Christmas. They were kind of fooled by false optimism that the economy had already recovered."

Despite this, Storch said the retailer was planning for higher like-for-like sales in the fourth quarter, as usually happens.

Leapfrog CEO John Barbour commented that optimism for the retail industry has not been justified by any reduction in unemployment or improvement in people's quality of life.

He said: "There's nothing that I've seen on my horizon that convinces me that this year is going to be spectacularly better.

"Maybe an inch or so better. To me the trends are continuing with some level of growth, but a very slow level of growth."

Brian Goldner, chief executive of Hasbro said he was relying on the appeal of new products such as Kre-O building sets, based on Transformers characters, to drive sales ahead of the holiday season, rather than any real increase in consumer sentiment or spending.

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