What's in stores for 2010

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Retail sales may be ticking up -- the National Retail Federation expects sales to increase 2.5% this year compared to the 2.5% decline forecast for last year -- but that doesn't mean it's business as usual in 2010.

Count on retailers to get creative to woo shoppers. Special events, one-day sales and an increased use of social media to connect and communicate with customers are all expected to dominate this year.

Retailers are enjoying the results of improved inventory controls and less deep discounting. They are fine tuning technology to track purchases and better assess what customers want, and getting better at differentiating merchandise and eliminating the sameness that makes consumers yawn instead of snapping up new fashions.

"Things are not as horrible as they were, but we're not back to the spending patterns we saw previously," says retail consultant Neil Stern, McMillan/Doolittle. "These are sort of mild increases."

Retailers are keeping inventory very tight, meaning popular items may sell out more quickly and there won't be a lot left for end of season sales. And if it suddenly seems like there are fewer choices in some product categories, it's not your imagination. Retailers are paring back selection, dumping brands and relying more on price than selection; a trend that began last year and shows now sign of abating.

And don't expect a lot of new stores this year either. Target plans to open just 10 units in 2010, Best Buy pared back store openings in the United States and overseas, and even Wal-Mart has a modest store opening schedule. It's less a reflection of the current economy than a function of how hard it is to turn on and off a very large company.

"You can turn things off real quick but you can't turn it on," says Stern. "It takes 18 to 36 months to get a building cycle back up and these retailers did a very hard stop last year."

The good news is Stern expects fewer store closings and bankruptcies than the last two years. At least among the large chains. Small, independently owned retailers face another set of problems unless employment numbers start improving and lending loosens up.

Washington DC's MyerEmco fell prey to the recession and tightened lending. The family run electronics chain is closing its doors after 50 years.
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