Today is a special one. At last the memories of a harsh winter can be put to rest. This is the first day of summer. More than that, it's the summer solstice. So in this hemisphere, it's the longest day of the year measured by hours of daylight.
In light of all that, today marks a good time to take a new look at how business is shaping up for the balance of the year.
The good news is that with the advent of summer there comes a number of indicators that things are looking up. The economy seems to be getting its footing and is in good recovery -- not the "jobless recovery" of the long winter, but a more summery recovery that involves substantial job creation.
Summer is always a prime time for seasonal merchandising and locally produced product in both food and nonfood categories, so that's likely to improve the sales outlook, too. Additionally, the low-carb and healthy-eating sectors of food retailing provide new promotional opportunities this year that were not so robust last year at this time.
Indeed, a number of retailers polled by SN as the summer selling season was inaugurated on Memorial Day said they expected strong sales.
Intangibles count, too, and they're turning positive. One retailer who was mentioned in these pages a couple of weeks ago said, "I think we'll see more family functions. I can feel there's more loyalty in our people, whether it's loyalty to their local store, their family or their country as a result of world events. We've pulled together more. I think that can be good for supermarkets."
To be sure, there are some negatives lurking. Inflation seems to be gaining a toehold, and some parts of the economy are seeing substantial price increases. Conspicuously, the price of fuel is up. Some retailers, though, see even that as a marketing point. Some supermarket operators that sell gasoline are offering cents off a gallon with use of a loyalty card. That promotion has been successful in building store traffic. Other operators see higher fuel costs as motivation for people to stay near home this summer. That could prop up sales in numerous areas.
Several food categories are registering big price increases, too, especially in the dairy aisle. Double-digit increases are showing up in the prices of fluid milk, butter and cheese, with the last rising in price most rapidly. Meat prices started to move upward lately as well.
It's thought that dairy prices could start to decline in the fall. Until that happens, there are at least two factors that mitigate the damage high prices might inflict. One is that nearly all these categories are staples, so consumption may not decline too much. The second is that modest promotional activities might pay off big in the categories.
Another bit of good news for the business was in last week's proprietary survey of industry trade relations. A big 80% of those responding said working relationships between trading partners were "generally good," although there's room for improvement. Some 53% said progress is being made in one critical area: category management.
