Costco Q2 Comp +2% / Excluding Gas Price & Foreign Exchange +8% “Net sales for the quarter increased four percent, to $26.87 billion, from $25.76 billion last year. Net sales for the first half increased six percent, to $53.16 billion, from $50.22 billion last year.”Read the release
Jim Cramer: Target cuts are the right moves at CNBC “There’s 13,000 employees at [Target’s] headquarters, which is 12,975 more than what Warren Buffett has at his headquarters,” Cramer said, adding that Cornell is leaning toward placing Target stores closer to college campuses. “I’ve been talking to him about the notion to have Target next to every single university.”See the video / Read more
Report: Gov. Mark Dayton, whose family founded Target, wants to meet with Brian Cornell to discuss coming layoffs by Tom Scheck at MPR News. “Dayton told reporters Wednesday that Target officials did not give him any notice of the job cuts and he’s concerned about the well being of those who will lose their jobs…”He’s relatively new here,” Dayton said of CEO Brian Cornell.” Read more
…Gov. Dayton: “I think this could have and should have been handled differently” by Patrick Condon at Star-Tribune. Read more
***New Product Spotlight – Orchard Road Launches Series of Decorative Canning Products. The decorative series of canning caps features three custom designs: Wild Daisy, Fruit and Gingham. Finally something unique to drive incremental sales in the home canning and storage categories! Come see us this weekend at the Housewares Show in booth S3920. See the new line for the first time here.For more information: email@example.com.
Dick’s Sporting Goods has Donald Trump Stumped by Jessica Golden at CNBC. “I don’t get what Dick’s is doing,” Trump said. “It’s a store that sells cheap stuff. Golf should be an aspirational game. I think if they look at golf as something other than that, then they are making a big mistake.”See the video / Read more
Wal-Mart, Google Part Ways Over Local Shopping Ads by Alistair Barr & Rolfe Winkler at WSJ. “After Wal-Mart pulled out of the Local Inventory Ads, Google ad executive Sridhar Ramaswamy called Neil Ashe, head of Global eCommerce at Wal-Mart, to ask why. The two men met in February, according to one of the people, but the results of the meeting aren’t known.”Read more (Subscription)
Hispanic Millennials Really Like Target by Sarah Halzack at Washington Post. “While just 38 percent of Target shoppers overall identify the store as their favorite, some 54 percent of Hispanic millennials said it was their favorite.”Read more
Kathleen McLaughlin outlines Wal-Mart focus on business responsibility in society by Kim Souza at The City Wire. “Her nearly 75-minute talk to about 150 students and faculty focused on six key success factors for how a business can work toward strengthening the private sector…”Read more
Dick’s CEO walks back comment about Adidas by Matthew Kish at Portland Business Journal. “(CEO Ed) Stack had said the company would remove some Adidas products from its shelves to make room for apparel from Carrie Underwood’s new Calia brand…”The idea that we are kicking Adidas off the shelves, nothing could be further from the truth,” he said”Read more
Howard Levine sells 1.8 million shares of Family Dollar stock at Katherine Peralta at Charlotte Observer. “Levine now owns 4.6 percent of the Matthews-based discount retailer, down from a previous 6.2 percent before the sale, according to a securities filing Thursday.”Read more
Canadian Tire’s Dean McCann named CFO of the Year by Marina Strauss at Globe & Mail.Read more
Black Enterprise’s 50 most powerful women in corporate America at New Pittsburgh Courier. “Claire Babineaux-Fontenot, EVP & Treasurer – Walmart…Rosalind G. Brewer, President & CEO, Sam’s Club – Walmart…Ann-Marie Campbell, President, Southern Division – The Home Depot…Mary A. Winston, EVP & CFO – Family Dollar Stores.”See the Top 50 list
Nordstrom treads carefully with launch of second Canadian store by Marina Strauss at Globe & Mail. “Nordstrom is treading carefully in Canada, opening its second store on Friday – in Ottawa – another one in the fall in Vancouver and six in all by 2017.”Read more
Walmart greeter shares his ‘blessed day’ at Georgia state capitol by Chris Shaw at Fox 5 Atlanta. “He was a like a rock star walking around the state capitol. House Speaker David Ralston invited him to the house floor so lawmakers could meet him. “Yea, I give autographs,” James told FOX 5. “But you probably can’t read it when I write it,” he joked.”See the video / Read more
Elderly Dog Battling Cancer Gets a New Ride from Home Depot by Sid Garcia at ABC 7 Los Angeles. “‘Let me give it some thought and I’ll call you later,” Feldman said. That employee — Ernesto Moran — did think about it. Along with his co-worker Justin Wadman, the pair came up with a solution. They custom-built a wagon to Ike’s size. It includes a small ramp to make it easier for him to climb up…Feldman was so touched, she reached out to Eyewitness News to share her story.”See the video / Read more
Tractor Supply: Bank of American Merrill Lynch 2015 Consumer & Retail ConferenceSee the PowerPoint
Walmart Presents at Bank of America Merrill Lynch Consumer & Retail Conference
Charles Holley, CFO
Gas price declines: I think with our customer what we (saw) is some portion they did (save), some was to pay down debt, but they also used a portion to — across food. Food was one of the top-item of what they used their savings for.
We’ll end up with well over 10 million SKUs online by the end of this year.
(We’ve got) to do a better job in our dairy areas and our bakery areas, and our meat areas those are critical, I think we’ve upgraded some of those, but I think they have a longer way to go.
We’re very pleased with what our Canadian operations and where they are, they had one of the better years this last year. Very good profitability and their sales were very good, their food business continues to be an uptick.
Savings Catcher: It’s been an incredible success.
UK: I think that we have the strongest operation of the four large retailers, but make no mistake, it’ll be very tough for them this year.
China: Our best club in the world is in China. Our best Sam’s Club is in China in Shenzhen and it’s actually our very first club in Shenzhen.
* We’re really focused on the Southern part of China and the middle part of China, where we’re very successful.
* We’re very bullish on China going forward.
Brazil: still is a work in process…just a very difficult working environment.
Mexico: We’re very pleased with what our self-service formats have been doing except for Sam’s Club.
* We brought down the head operator at Sam’s Club U.S. is now over the Sam’s Club in Mexico we’re seeing definite improvement.
On mobile pay: we’re talking to most of the players who are trying to figure it out with the players and partnerships and even in our own apps that we might have.
Target Presents at Bank of America Merrill Lynch Consumer & Retail Conference
John Mulligan, CFO
There’s a significant opportunity over the next couple of years to take out $2 billion of expense, 25% of that in cost of goods, the rest of it in SG&A.
We’re going to continue to hire data and analytics individuals, engineers and technology, places we have to invest, there are some places in risk we need to continue to invest, but net-net when all is said and done, we will have a smaller, leaner, more agile headquarters and central operation to support both our channels.
Food: Frankly classic mistake right? We sit in the middle. We’re not really special and we’re not a full grocery and so we’re sitting in the middle of no man’s land.
* We did a lot of research, lots of conversations with our guests (on food) and the clear message is, look we expect Target to be specialized, just like the rest of the store.
* We’re not going to be the broad line grocery store in most of our formats, SuperTarget a little bit different.
* A lot of testing is going on and Kathee talked yesterday about testing in Chicago. There’s a couple of other markets where we’re doing some tests around supply chain that’s sits behind our food offering.
* 2016 you’ll start to see changes and that’s a several year journey to improve our food offering.
* We just put it in the Raleigh-Durham market in late January, so it’s only been there five, six weeks or something like that, so we’re very early. And there is great take up which we’re excited about.
* There’s a fair bit of testing that we’re going to need to do here and I wouldn’t expect to see us doing anything dramatic certainly before next year because I think we have a lot of work to do.
I think our merchants got put through a lot of rigor when they want to change the way they are presenting things or they want to bring in product that was a little bit different.
I went and met with Bob Ulrich, who was our CEO about seven or eight years ago and he talked a lot about letting the merchants just do some things and forcing them to do some things.
Brian, he was in Florida a week ago and he saw a run of mittens and hats and it’s like, well it’s already 75 degrees down there.
Today we do 30 planograms for whatever set we need to do 500 planograms.
We think the primary really that will grow through time is probably TargetExpress.
TargetExpress: are relatively capital light. We could do 50 of those and it will be $300 million to $400 million.
Eye-on-Retail Tipsheet is read worldwide by Retail Merchants & Executives and created early every weekday morning. We love data, earnings reports, executive presentations and stories off the beaten path that get at what’s happening in the world of retail. Contact us at firstname.lastname@example.org.