Tuesday, May 10, 2016

Avoid price pass-through shoe for fear new falls

São Paulo-across the worst crisis of the last few years, the shoe stores are avoiding passing on increases in consumer prices for fear that sales are even smaller. Last year alone, the sector suffered a shrinkage of 8% compared to 2014.
According to business leaders heard by the DCI to protect prices, costs like those derived from inflation and import have been divided between industries and retailers, in a negotiation that became constant with the sharp drop in sales of the sector in 2015.
According to a survey prepared by consulting firm specializing in Kantar Worldpanel: consumer consumption, the Brazilians 17.3% less effected with the purchase of shoes last year, compared with the previous year. The volume of parts purchased and frequency of ida stores also were lower, with a reduction of 5% and 5.7%, respectively.
"We are going through a period of rationalisation of consumption and the shoes are not purchase priority. It''s an item that he can, and is, cutting on the low confidence in the economy, "says the account manager Kantar Worldpanel: consumer, Thais Ribeiro.
The consultant also shows that last year alone, 1000 left to acquire 149.2 Brazilian shoes, given that propelled the retraction.
"Women represent the biggest decline because they have greater participation in sales. What we observe is that there has been a change in their behavior. If before they acquired three or four shoes for sale, now buy only one, "he says.
The fall resulted in a lower female participation in sales. If in the 2014 women''s shoes accounted for 54.8% of total outputs even in the industry, last year the index fell to 51.1%, making room for the family footwear, which jumped from 3.6% to 5.8% on the same basis of comparison.
"The thread of family shoes grew up on the same period in which others have fallen, because it comes to products that can be used by more than one person. The family goes to buy a product for children to use and so prevents other expenses ", explains.
While the male, female and child segments recorded falls in the number of buyers, the family grew and reached 12.9% more consumers last year, compared with 2014.
Before the retraction of the whole scenario, some stores like Sri Booz, for example, are seeking to cut back on meat import and operation costs of the items. However, the company''s current fight is not to pass these rises to consumers, since sales are no longer good.
"Our strategy has been to reduce all possible excesses and increase investment in communication and relationship with the customer. There is, on the part of the entire chain, a total loss of confidence in the economy, "says the Director and founder of Sri Booz, Claudio Booz.
Despite this, the reports have seen the beginning of a possible recovery earlier this year. "We increased 11% over the previous period, but the market is totally stalled," laments.
In the search for a reaction, the network, which currently has 28 stores, will open a new unit in Miami, in the United States. In addition, the company provides operation of internet sales until September this year.
"We still have no online operation, but the forecast is for deployment through the third quarter. With this, we estimate grow between 15% and 20% in revenue this year, "predicts the Director. Last year, according to him, the brand recorded a stable billing, lossless or high.
Direct sales
When working with the door-to-door sales model, the footwear Thursday also has sought to hold the Valentina transfer prices for the end customer, but failed to avoid the drop in average ticket purchase.
"[The average ticket] should have reduced at least 30% between 2015 and this year. However, we work to ensure that the dealer convert that loss with new customers, and so balance your swing, "says the founder of the fifth Valentina, Renato Kuyumjian.
As part of the inputs for the manufacture of footwear is imported, Kuyumijan account that there was, on the part of suppliers, an indication that, on the dollar exchange rate on the rise, some prices would rise. To circumvent this problem, the solution was to approach even more of the manufacturers of footwear.
"We''ve been coming since last year creating greater links with suppliers. Do contracts, sometimes for the whole year, which is an advantage for us and for them, "comments.
According to the businessman, the store''s sales in the first quarter were well above expectations and surpassed the registered in the same period last year. The numbers, however, were not disclosed.
Currently more than 200 franchise representatives, the network won R$ 8.3 million in 2015, enough to ensure a growth of 23% compared to the calculated in 2014. For this year, the company predicts Bill until R$ 10.1 million, which would mean a new advancement 23% organic in gross receipts.
Logistical challenge
Unlike other stores, 33/34, retailer that only sells footwear intended for whom small number pants, expects to grow to 40% this year. However, the price is the same strategy of competitors. "We didn''t do any readjustment in our products. The industry has kept the prices on spares of basic models and that allowed us to work without adjustments, "says the founder of 33 and 34, Tania Garcia.
For the Manager, in addition to the economic crisis that affects consumption, one of the biggest bottlenecks that your business faces in nowadays is in question. "The calendar is too long for delivery of purchases. The industry takes 30 to 45 days to deliver a request. This term makes inventory management a challenge, especially for the smaller retailers like us ", it is claimed.
DCI - 10/05/2016
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