Now is prime time for such analysis; this weekend launches the holiday shopping season, which accounts for up to 40 percent of annual sales for some chains.
In addition to informing decisions on which retailers are worthy of investment, this intelligence can provide a glimpse of the direction of the economy. Consumer spending accounts for more than two-thirds of US economic activity, so if shoppers are holding back, it’s a sign of trouble.
“I spend a lot of time in stores this week,’’ said Dixon, 35, who manages Fidelity’s Select Retailing Portfolio fund, which has bought stock in TJX Cos., Bed Bath & Beyond Inc., and other retail chains. “Black Friday and this weekend are really an opportunity to better understand the real landscape heading into the holiday season.’’
While Dixon fights the mall crowds, a host of research companies will collect data with high-tech tools to help investment managers get the full picture for Black Friday. ShopperTrak, for instance, has installed cameras in more than 25,000 stores and shopping centers across the country to count the shoppers trekking through.
The Chicago company primarily sells the data to retailers to help them track foot traffic. But it also aggregates the figures by retail category (such as electronics) and sells the information to about 50 investment firms, as well as other clients. The company expects to have preliminary data for Black Friday available tomorrow.
Remote Sensing Metrics LLC, another Chicago company, started using satellite images two years ago to count the cars in parking lots outside stores to estimate traffic for retailers. Computers do most of the counting automatically. Analysts in Sri Lanka spot check the data and use it to estimate changes in traffic and sales.
“It’s amazingly accurate,’’ said Tom Diamond, Remote Sensing’s president. Diamond said more than 10 investment firms pay between $10,000 and $100,000 for monthly reports.
