Augustine and Dana Telsey, also a Bear Stearns retail analyst, brought up this and other points about retail's future in a presentation called "What's Hot and Not in Retail?" These discount chains and others are growing and are popular with all income segments, Augustine says. "The US customer really wants a bargain," she said. "Look at Costco, and you'll see a Mercedes in the parking lot."
But Augustine was not as optimistic about the future of another discounter – Kmart. "It's unclear to me whether or not Kmart intends to be in business five years from now," she said. Struggling chains the two speakers highlighted are Hot Topic, Saks Inc., Sears, Roebuck & Co., Tweeter Home Entertainment and others.
Chains the two pointed to as leaders include Best Buy, J.C. Penney, Staples, Target and Williams-Sonoma. Hot products with consumers are iPods, jewelry, flat-screen plasma televisions and ponchos, Telsey says.
One trend shoppers will see are department store chains such as Federated and Kohl's go after the electronics sector, Telsey says. Retailers will also continue to renovate their stores, she says. "Who wants to go into something that looks old?" Telsey asked. "You want something that looks new."
Future developments that could hinder the industry include rising energy prices and interest rates and moderate consumer confidence, Augustine says.
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