Retailers Try to Find Footing After Years of Missteps -- Corporate Outlook

   By Paul Ziobro 
 

After many tough years, the improving economy may offer new hope for the retail industry--and if not, there is new leadership to try to fix it.

The U.S. economy grew at its strongest pace in 11 years in the third quarter. Consumer confidence surged to its highest level since the recession in early December. Unemployment has eased and low gas prices are providing much needed relief for the country's poorest shoppers.

That may provide some relief for big-box stores Target Corp. and Wal-Mart Stores Inc. that have seen shopper visits decline for eight straight quarters. Other chains like Sears Holdings Corp., J.C. Penney Co. and Abercrombie & Fitch Co. are all mired in long slumps as they grapple with changing shopping habits and try to fend off competition from online retailers like Amazon.com Inc.

Both Wal-Mart and Target notched sales gains in their latest quarter, but at the expense of profitability as retailers ratcheted up promotions to clock higher revenue.

A new crop of chief executives will be tackling the landscape where a greater share of shopping is done online. Wal-Mart, Target, Gap Inc., Home Depot Inc., Abercrombie, American Apparel Inc. and J.C. Penney are among chains with new or soon-to-be new CEOs.

On the low end, the three largest dollar-store chains remain locked in a now six-month merger saga. Dollar General Corp., the largest chain by number of location and sales, is trying to buy its close rival, Family Dollar Stores Inc., and scuttle a planned sale to Dollar Tree Inc. A new Family Dollar shareholder vote is slated for January.

Retailers will have one thing to be thankful for as they start 2015: Weather. Last year, the first few months of shopping were hit hard by frigid weather that swept across the U.S. Forecasters predict that a milder spring could bring another measure of relief.

Write to Paul Ziobro at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires