Belk Women’s Department planned sales $2,176,510.47
Belk Women’s department is planning a 5% increase in its overall net sales. The decision for the increase was reached as the result of evidences obtained from retail articles and retail sales. According to the release national retail federation economic forecast in 2016, Reynolds assert that “NRF's 2016 economic forecast projects retail industry sales to grow 3.1 percent, higher than the 10-year average of 2.7 percent” (Reynolds, 2016). With this forecast made by National Retail Federation, it is only suitable to estimate that the company’s sales will rise by 5%. This estimated increase is much effective since it will aid in yielding enough profit while reducing the expenses from 29.04% to 23%.
The decrease in profit witnessed at the start of 2016 can be contributed to the harsh winters that occurred at the end of 2015. The winters was a hindrance factor causing most consumers not to go out and spend as expected by the retails during holiday seasons. In which case, the result was a losses to the consumers. The sales started to increase with the approaching winters because the weather was conducive to the consumers. With the normalizing retail spending, consumers gain that comfort of spending their money. Further, the forecasted increase in sales could also be attributed to decreasing levels of unemployment which also mean good for the consumer spending. This is as stated by center for retail forecast which asserts, “spending related to increased wages, pension drawdowns, PPI and general consumer confidence will boost retail spending above what it would have been without these boosts” (Center for Retail Forecast, 2016)
Further, the state of Belk’s overall in-store and e-commerce sales is also a hinting factor that the forecast of 5% is effective. In the last five years, the sales at the store have been consistently increasing from year to year with a record of 1.5% rise witnessed last year; the e-commerce sales also increase by 43.3% (Thomas, 2015). With people becoming more health conscious year after year, it is much convincing that athletic footwear merchandise, accompanied by active wear and Men’s sportswear would garner more sales during the year than previous year. Nielsen asserts that, “and consumers will continue to reach for increasingly premium, high quality products, especially those offering a health concept or benefit” (Nielsen, 2016). The segment also seems much profitable as supported by e-commerce segments which is likely to have more profitability.
References
Reynols, T. (2016). NRF forecasts retail sales to grow 3.1 percent in 2016. NRF. Retrieve on 24th Feb. 2016 from: https://nrf.com/news/nrf-forecasts-retail-sales-grow-31-percent- 2016#sthash.Q8KYqEiM.dpuf
Nielsen, (2016). 2016 Consumer Goods Sales Forecast：quality, health, and convenience drive growth into the new year. Nielsen, web, retrieved from: http://www.nielsen.com/cn/en/insights/news/2016/2016-consumer-goods-sales- forecast-quality-health-and-convenience-drive-growth-into-the-new-year.html
Center for Retail Forecast, (2016). The Retail Forecast for 2016-2017. Web. Retrieve from: http://www.retailresearch.org/retailforecast.php
Thomas, J. (2015). Belk's net income slides 7.8 percent for the year. Charlotte Business Journal, Retrieved from: http://www.bizjournals.com/charlotte/blog/morning- edition/2015/03/belks-net-income-slides-7-8-percent-for-the-year.html
