Resend: Eye-on-Retail Tipsheet 11/21/12

Worker Organization Files Federal Charge against Walmart.  “The planned strikes, which OUR Walmart members announced would be part of 1,000 store protests on and leading up to Black Friday, are in protest of Walmart’s ongoing attempts to silence workers for speaking out for better jobs. Because the planned strikes are in protest to unfair labor practices like silencing workers through scheduling changes, reductions in hours, and even firings, workers are legally protected under federal labor law.”  https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121120006518&div=-1245645151 

“Why The Wal-Mart Black Friday Protests Won’t Work” by Rick Newman in US News.  “One question for the hundreds, or perhaps thousands, of Wal-Mart workers who are planning to disrupt the retailers’ stores over the Thanksgiving weekend: Have you noticed what just happened to Hostess?”  https://www.usnews.com/news/blogs/rick-newman/2012/11/20/why-the-wal-mart-black-friday-protests-wont-work

World’s Largest Shoe Floor Sets Foot On Broadway at Macy’s Herald Square.  “On a street renowned for awe-inspiring productions, the fall 2012 opening of the World’s Largest Shoe Floor at Macy’s Herald Square is one of the most exciting and epic events of the season, with the debut of more than 250,000 pair of women’s shoes in a posh, new, 63,000 square-foot space on the second floor of the iconic flagship.”  https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121120006008&div=-1245645151

“Walgreen unveils Bucktown (Chicago) flagship, plans more upscale stores nationwide” by Brigid Sweeney in Crain’s-Chicago Business (includes pictures).  “Walgreen Co. is unveiling a new flagship location in Bucktown, and store executives say about 10 other upscale stores — in locations ranging from Hawaii to inside New York’s Empire State Building — will be complete by early 2014…The space, a historic bank building that dates to 1919, was vacant before Walgreen purchased it in 2010 and began renovations, executives of the drug chain said.”  https://www.chicagobusiness.com/article/20121120/BLOGS01/121129985

“Apple Posts Black Friday Sale Teaser Online, Don’t Expect Retail Stores To Open Very Early” by Alex Heath in Cult of Mac.  “If you’re a longtime Apple customer, you know that the company’s Black Friday deals are infamously weak. The biggest kind of discount you’ll typically see is $40-$60 off an iPad or $100 off a Mac.  Still, it’s the only time of the year that Apple discounts anything, so the deals are worth noting. Nothing specific has leaked out yet about the deals that will be happening this Friday, but expect some modest price cuts on all of the new products Apple introduced over the past few months.”  https://www.cultofmac.com/201989/apple-posts-black-friday-sale-teaser-online-dont-expect-retail-stores-to-open-very-early/#edzWvDvEwhqVtiv0.99 

“New body scanner offers virtual tape measure for online shopping” by Chris Wickham from Reuters.  “Shoppers are still nervous about ordering clothes online because they often do not fit and, some say, there will never be a substitute for trying something on – one reason why the boom in online retail has not had the same impact on clothing as on music, books and electronics retailing.  In the United States, for instance, the consultancy ComScore estimated that only 14 percent of online spending went on clothes and accessories in the year to June.” https://www.reuters.com/article/2012/11/21/science-bodyscan-shopping-idUSL5E8MKCLV20121121 

“Best Buy reports loss” by Spencer Platt at CBS News.  “Best Buy’s third-quarter financial performance was clearly unsatisfactory,” said CEO Hubert Joly, the turnaround expert tapped to lead Best Buy in August.  The electronics chain is trying to reverse a year long decline in its business as competition from online stores and discounters increases, and consumers’ tastes shift from more profitable items like TVs and desktop computers toward less profitable smartphones and tablets.” https://www.cbsnews.com/8301-34227_162-57552614/best-buy-reports-loss/

“Target Turkey Dinner Costs Less Than Wal-Mart” by Leslie Patton in Bloomberg.  “Target has been pretty clear, through their actions, that they want to have a very competitive holiday season so it’s not surprising that it translated over to food,” Bartashus said in an interview. While Target is “clearly trying to bolster sales with promotions,” Wal-Mart promotes everyday low prices and doesn’t do much discounting, she said.”  https://www.bloomberg.com/news/2012-11-20/target-turkey-dinner-costs-less-than-wal-mart.html

Amazon.com Asks The Made In America Store to Join Their E-Commerce Site.  “The Made In America Store was recently asked to join Amazon.com’s online web-store. The internet store giant, Amazon.com, has been looking for a brick & mortar store that sells US manufactured goods to keep up with the growing demand of American made products. The Made In America Store was the perfect candidate, bringing over 2,000 different US manufactured goods.”  https://www.prweb.com/releases/2012/11/prweb10148157.htm 

“Heinz aims for new growth in dollar, drug stores as profits surge” by Kim Leonard in Trib Live Business.  “Heinz’s management team has “begun to make progress on alternate channels like drug and dollar stores” through improved distribution and products aimed at price-conscious shoppers….  That’s not having much impact yet. “We’re just now getting into dollar stores, and we’ve cracked Dollar General on Ore-Ida,”…adding Heinz is “grossly underdeveloped” in terms of getting products on shelves at the stores that have fared well through tough economic times…. Dollar stores have been growing faster than any other retail format, and they sell many of the products that Heinz would produce,” said John Stanton, a professor of food marketing at St. Joseph’s University in Philadelphia. “My only question is, why haven’t they done this already?  https://triblive.com/business/headlines/2993196-74/percent-heinz-sales-stores-dollar-products-business-grew-market-share#ixzz2CrbQFwmT

Eye-on-Retail Tipsheet 11/20/12: Lowe’s Q3 call deep dive; Amazon would “love” to open retail stores.

Yesterday’s Lowe’s Q3 Earnings Call Highlights 

Heard on the Call…

Strategy

In the US, Lowe’s is focused on two large bodies of work this year — value improvement and product differentiation.

Through these efforts, Lowe’s expects to deliver comp transaction growth and better gross margin by localizing assortment (i.e. store clustering), driving excitement in stores through better display techniques, and managing an appropriate balance of product costs and retail pricing.  Lowe’s expects to have this work done by mid-2013.

Accelerated line reviews and resets

Expect to finish line reviews in 90% of categories by end of this fiscal year.

Expect to reset 40-50% of  business by the end of this fiscal year.

Resets are “peaking now” in early fourth quarter

Categories that have gone through reset have stabilized.

About 3-4 dozen categories have reached “normalization” stage now

Less than 20% of categories have “normalized” at this point

Seeking to improve product line designs…to make them more relevant to the markets they serve…reducing duplication among price points.

Tile category held up as an example of the accelerated line review process working well.  Lowe’s started with consumer insights..used analysis to group stores into four clusters…sent firm expectations to vendor partners to bring innovation to line review..result was dropping duplicated skus while adding new wood looks…still reducing inventory by 20%…while investing in more inventory of popular and new styles and sizes.

Paint cited as a category that benefited from reset.  They developed four new color collections one for each season…introduced premixed paint samples…and simplified offering of paint applicators.

Redirecting inventory dollar savings and vendor promotional dollars to higher velocity skus, job lot quantities, etc.

Endcaps

Product differentiation – Lowe’s is in the process of updating endcaps and is working to have better adjacencies with inline inventory.  A cross-functional team is spearheading the process.

Endcaps — What’s working:  Innovation endcaps, videos.

Endcaps — What isn’t working:  “Theme” endcaps with multiple products…Takeaway “keep it simple”.  Adjacencies to inline inventory is a weak spot but they’re working to remedy.

Q3 Comps

Categories that comped above company average:  lumber, tools, lawn and garden, cabinets, paint, storage, cleaning, appliances and hardware.

12 of 14 product categories positive comped in Q3.

Nearly 2/3 of product categories comped above co. average in Q3.

Strength in commercial business..which is 25% of sales.

Lawn and garden cited as a Q3 success story where they were prepared with ample inventory and drove improved attachment rates in live goods, fertilizers, solid rocks and mulch.

Consumer sentiment

Housing market is “on the mend”…but overall consumers remain cautiously optimistic.

Consumer sentiment study conducted by Lowe’s found that  spending is staying the same or declining and the majority of those who delay a project site a lack of income growth as the primary reason.

Consumer sentiment study also found that the overwhelming number of projects planned for the next three months are for tickets under $500.

Sandy

Lowe’s details storm stages as 1) Prep, 2) Impact, 3) Cleanup and 4) Recovery.  Regarding Sandy, they say they’ve already been through the Prep and Impact stages and some of Cleanup.  Cleanup will continue into Q4 and Recovery will extend into 2013.

Canada — Rona

“We like Canada from a market standpoint…pleased with performance of our 32 stores..continue to make improvement…but we need more scale..will come from opening additional stores…ecommerce site in Canada now open..ships to home or store…will also continue to look at acquisitions.”

Click here for webcast:  https://phx.corporate-ir.net/phoenix.zhtml?c=95223&p=irol-EventDetails&EventId=4869856

 

“Lowe’s efforts to cut costs, spur sales paying off” by Phil Wohba at Reuters.  “Credit Suisse analyst Gary Balter, in a research note, called the results “a promising inflection” that signed Lowe’s efforts are “beginning to take hold.  On a call with analysts, Chief Executive Robert Niblock said the company’s current transformation phase would end in mid-2013.”  https://www.reuters.com/article/2012/11/19/us-lowes-results-idUSBRE8AI0QK20121119

“Jeff Bezos: We would love to open Amazon retail stores” by Dan Farber at CNET (Video with text).  Bezos — “We would love to but only if we can have a truly differentiated idea. We don’t do a me-too product offering very well. When I look at physical retail stores, it’s very well served. The people who operate physical retail stores are very good at it. The question we would always have before we would embark on such an thing is what’s the idea, what would we do that would be different, how would it be better… we don’t want to be redundant.”  https://news.cnet.com/8301-1023_3-57551081-93/jeff-bezos-we-would-love-to-open-amazon-retail-stores/

“Amazon goes Hollywood” by JP Mangalinden in CNN Money/Fortune.  “Can Amazon do to Hollywood what it has done to the publishing and retailing industries? Two years ago Jeff Bezos & Co. launched Amazon Studios, which aims to compete with traditional production companies by developing feature-length films and television series — with a distinctly Amazonian twist: Scripts and pitches are uploaded online, and may be evaluated and commented on by the public.”    https://management.fortune.cnn.com/2012/11/16/bezos-amazon-studios/

CareerBliss Announces the Top 10 Happiest Stores for Your Shopping Pleasure. “CareerBliss analyzed more than ten thousand independent company reviews, evaluating which retail employees were happiest. Nordstrom—known for its customer service oriented culture—tops the list in providing a happy work environment for its employees. Following Nordstrom is Macy’s, OfficeMax, Best Buy and GameStop to round out the happiest retailers in America.”  https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121119006880&div=-1245645151

“Wal-Mart fights back as Black Friday strike nears” by Jessica Wohl in The Christian Science Monitor.  “Wal-Mart Stores Inc. is taking legal measures to sop months of protests at stores nationwide, filing charges against the union it says is behind such actions. The move comes as a group of Wal-Mart workers prepare to strike on Black Friday, the busiest shopping day of the year.”  https://www.csmonitor.com/Business/Latest-News-Wires/2012/1119/Wal-Mart-fights-back-as-Black-Friday-strike-nears  

“Pinterest Releases Business Accounts” by Armando Roggio in Practical Ecommerce.  “Thousands of businesses have become part of our community, giving great ideas, content and inspiration to people on Pinterest. Whether it’s Anthropologie sharing awesome clothes, Whole Foods sharing tasty recipes, the Smithsonian sharing fascinating collections, or Amazon making products easy to pin, many of us have been inspired on Pinterest by businesses. We want to help more businesses provide great content on Pinterest and make it easy to pin from their websites. Today, we’re taking a first step toward that goal with some free tools and resources,” wrote Pinterest Product Manager, Cat Lee on the company’s blog.”  https://www.practicalecommerce.com/articles/3812-Pinterest-Releases-Business-Accounts

“Staples CEO Sargent quits Home Depot board” by  Jacques Couret in the Atlanta Business Chronicle.  “The Atlanta-based home improvement giant reported in a U.S. Securities and Exchange filing..Staples Inc. Chairman and CEO Ronald L. Sargent resigned immediately from the Home Depot (NYSE: HD) board of directors.” https://www.bizjournals.com/atlanta/news/2012/11/16/staples-ceo-sargent-quits-home-depot.html

“Sears Canada launches new ad campaign for holiday season” (Video with text) by Hollie Shaw at Financial Post.  “The company is trying to focus promoting its core merchandise categories including major appliances and furniture before Target Canada opens in Spring 2013. This week Sears Canada reported a net loss in the third quarter and a 7% drop in revenue.”  https://business.financialpost.com/2012/11/15/sears-canada-launches-new-ad-campaign-for-holiday-season/

 

Eye-on-Retail Tipsheet 11/19/12

Breaking this morning…Lowe’s Q3 Earnings

Lowe’s Reports Third Quarter Sales and Earnings Results.  Highlights:

Q3 comparable comp sales +1.3%  (vs. Home Depot Q3 comp sales +4.2%)

Q3 net earnings of $396 million, a 76% increase vs. same period a year ago (vs. Home Depot Q3 net earnings of $947 million)

Lowe’s full year anticipated sales expected to be flat on a 53 week basis.  (THD anticipates +5.2% growth on same 53 week basis)

Lowe’s plans to open 10 stores in fiscal year ’12

Full Lowe’s Q3 press release:  https://phx.corporate-ir.net/phoenix.zhtml?c=95223&p=irol-newsArticle&ID=1760033&highlight=

Link to today’s Lowe’s Q3 Earnings Conference Call held at 9:00 am EST:  https://phx.corporate-ir.net/phoenix.zhtml?c=95223&p=irol-EventDetails&EventId=4869856 

Tomorrow’s edition of Eye-on-Retail will feature key nuggets from today’s conference call

“2012 Businessperson of the Year” by Fortune.  Of note:

#1- Jeff Bezos, CEO – Amazon

#11- Frank Blake, CEO – Home Depot

#12- Glen Murphy, CEO – GAP

#15- Carol Meyrowitz, CEO – TJX Cos.

#17- Michael Duke, CEO – Walmart

https://money.cnn.com/gallery/news/companies/2012/11/16/business-person-of-the-year.fortune/2.html 

“Amazon’s Jeff Bezos: The ultimate disrupter” by Adam Lashinsky at CNN Money/Fortune.  “Customer focus is a cultural issue, Bezos says, that distinguishes Amazon from other companies, whose chiefs craft strategy in competitive terms. “When they’re in the shower in the morning, they’re thinking about how they’re going to get ahead of one of their top competitors,” Bezos says. “Here in the shower, we’re thinking about how we are going to invent something on behalf of a customer.”  https://management.fortune.cnn.com/2012/11/16/jeff-bezos-amazon/

“Sorry, Netflix Subscribers, Amazon’s No Longer Testing Prime for $7.99 a Month” by Tricia  Duryee at All Things D (Hat Tip: slashgear.com). “Amazon is no longer giving consumers the option of paying $7.99 a month for Amazon Prime, the loyalty program that includes free two-day shipping and video streaming. An Amazon spokesperson confirmed: “We regularly test new options for our customers. At this time, we’ve completed our test and are no longer signing up new customers for Amazon Prime monthly memberships.”  https://allthingsd.com/20121116/sorry-netflix-subscribers-amazons-no-longer-testing-prime-for-7-99-a-month/

“Home Depot opens Mexican store within eyesight of Arizona” by Keith Rosenblum in Inside Tuscon Business.  “The logo of yet another American retail chain now stands tall in this border city, one more domino in a two-decades process that is seeing more U.S. companies become part of the retail landscape in Mexico…it’s 96th and 97th stores in Mexico.”  https://www.insidetucsonbusiness.com/news/home-depot-opens-mexican-store-within-eyesight-of-arizona/article_a451150a-2f46-11e2-9fcc-001a4bcf887a.html

“Walmart, Gap, Best Buy, Costco take on Quebec’s language watchdog over French signs” by Sidhartha Banerjel in Macleans.ca. “Quebec’s language watchdog, The Office Quebecois de la Langue Francaise, wants the retailers to change their signs to either give themselves a generic French name or add a slogan or explanation that reflects what it is they’re selling.  The changes are outlined on a website run by the language agency that gives businesses options on how to change their names. For example, Walmart, a household name on the retail scene that doesn’t really have a French equivalent, could change its signs to “Le Magasin Walmart.” https://www2.macleans.ca/2012/11/18/big-businesses-heading-to-court-against-quebec-government-over-french-signs/

Nielsen Report Shows Business Opportunities among Asian-American Consumers.  Key insights:

If Asian-Americans were a country, they would be the 18th largest economy in the world.

28 percent of Asian-American households have incomes greater than $100,000 compared to 18 percent of total U.S. households.

70 percent of Asian-Americans own smartphones.

Asian-Americans over index on household purchases such as fresh produce; dried vegetables and grains; baby food and supplies; and photographic supplies.

https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121116005510&div=-1245645151

Valspar Announces Strategic Partnership with Retailer B&Q to Launch the Valspar Brand in the United Kingdom and Ireland.  “Valspar will be positioned as one of B&Q’s flagship paint brands and the two companies are collaborating to create an entirely new consumer experience not seen before in the U.K. decorative paints marketplace…The new retail concept will be rolled out to all 350 locations throughout 2013.”  https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121116005553&div=-1245645151

Eye-on-Retail Tipsheet 11/16/12; Target & Dollar Tree release Q3 earnings

Highlights from Target Q3 Earnings Call on 11/15/12

Q3 US sales increased 3.4% to 16.6 billion in third quarter 2012 from 16.1 billion last year

Q3 US comp +2.9%

Heard on the call…

Online:

Free wi-fi now rolled out across the chain.

Target sees a halo effect from stores to their online site.

Not currently offering “buy online ship to store” but it’s something they’re looking at.

In store, Target has created QR codes for each of their top 20 toys, allowing guests to purchase by scanning the QR code in store and then having the toy shipped anywhere in US for free.

City Target stores:

There are now five City Target stores operating in four different metro areas:  Chicago, LA, San Francisco and Seattle with plans to open three more in 2013.

Typical guest is younger and more affluent than seen across the chain as a whole.

See pics of Seattle City Target here (from Seattle PI):  https://blog.seattlepi.com/thebigblog/2012/07/23/photos-tour-seattles-new-city-target/#6468-28)

Canada:  

Moving forward to open first stores by next April.

5% Reward “Red Card”:  (Note — Target is in love with their Red Card and talked about it at length on the call)

14% penetration on purchases in Q3, up 400 basis points from a year ago.

In Kansas City, where the Red Card was launched a year earlier, penetration reached 20% this month.

Big driver is the debit card which continues to grow at a 3:1 clip vs the credit card. As expected, Red Card use is higher online and in certain categories (assumption being higher dollar ticket items).

Comps:

Comps strongest in food, health and beauty.

Comps in apparel were up slightly, strongest in mens and active wear.

Hardline comps down overall; softest in electronics which reflects mature product cycles.

Pricing:

Target didn’t seem to think that competitors layaway programs were having much of an impact on sales.

Regarding price match policy over holidays, Target doesn’t see much price matching in stores now and doesn’t anticipate much over holidays either.  Will assess program after holidays to see if they should consider in 2013.

https://investors.target.com/phoenix.zhtml?c=65828&p=irol-newsArticle&ID=1759107&highlight= 

Highlights from Dollar Tree Q3 Earnings Release on 11/15/12

Q3 net sales +7.8% (1.72 billion)

Q3 comp sales +1.6

Q3 opened 111 stores, expanded or relocated 16, closed 4.

Q3 retail selling square footage +7.1% compared to a year ago to 40.1 million square feet.

See full release here:  https://www.dollartreeinfo.com/investors/global/releasedetail.cfm?ReleaseID=721513

“How Apple, Target and Starbucks are skirting Seattle’s billboard laws” (Video) by Amy Rolph at Seattle PI / KOMO News in Seattle.  “This is a fascinating report from seattlepi.com’s news partner KOMO News. City law dictates that billboards on buildings can only advertise merchandise actually sold inside — but many companies have found a creative way of getting around that rule.”  https://blog.seattlepi.com/thebigblog/2012/11/14/how-apple-target-and-starbucks-are-skirting-seattles-billboard-laws/  

“Costco (Home Depot & Others) Offers Shoppers Mortgage Refinancing Loans” (Video) on Fox Business News.  “George Mason University professor Anthony Sanders says increasing regulation on banks has opened the door for non-traditional lenders…Home Depot offering home repair loans.”  https://video.foxbusiness.com/v/1971748544001/

“Denver is First to Experience the New Office Depot – a New Store Concept Designed by Customers, for Customers.”  “Office Depot has built an entirely new store experience for its customers, and is debuting it in four new stores in Denver. The new concept store was created to encourage customers to interact more with products, with Office Depot associates, and with each other – all in a brand new store designed around the way customers want to shop. the new Office Depot Denver stores feature a PC Bar where people can sit down, plug in their laptop or tablet and get to work. There is also a computer rental station, free Wi-Fi throughout the store, a recharge station and free, self-serve coffee.”  https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121115005067&div=-1245645151

“Wal-Mart sales under global pressure, shares down” by Brad Dorfman at Reuters. “”When you see a slowdown in sales and then pressure in traffic, that causes investors to be cautious,” Brian Yarbrough, analyst at Edward Jones.  https://www.reuters.com/article/2012/11/15/us-walmart-results-idUSBRE8AE0V420121115

“Wal-Mart Expands Foreign Bribery Investigation” Stephanie Clifford in The New York Times / CNBC:  “Walmart disclosed on Thursday that it has expanded an internal investigation into bribery accusations in Mexico to Brazil, China and India.”  https://www.cnbc.com/id/49842387

“Ahold Expects Markets Conditions to Remain Difficult” by Robert van den Oever in Capital.gr.  “Dutch retailer Royal Ahold NV said Thursday it sees no relief from an intensely competitive U.S. market, as it continues to sacrifice margin in an attempt to attract cost-conscious consumers.”  https://english.capital.gr/News.asp?id=1666691

People Section:  Congrats to Marvin Ellison, Exec. VP at Home Depot, on being named an Outstanding Alumnus at The Fogelman College of Business & Economics.  https://www.hispanicbusiness.com/2012/11/14/u_of_m_business_college_honors.htm

Eye-on-Retail Tipsheet 11/15/12: Walmart Q3 earnings highlights

Breaking News — Highlights from Walmart’s Q3 earnings release this morning…

Q3 Earnings:  $1.08/share (vs. $1.07/share expected by analysts) an 11.3% increase from $.97/share in the same quarter a year ago.

Q3 Net Sales:  $113.2 billion, an increase of 3.4% from Q3 last year.

Q3 Comp Sales US:  +1.5% in 13-week period ending Oct. 26, 2012.

Q3 Op Income:  $6.1 billion.  +4% from last year.

Heard on the Call…

“During the quarter we added approximately 13 million retail square feet through 173 net new, expanded and relocated units”

“1.4% lift in ticket”

“Market share increase of 50 basis points in food, consumables and over the counter combined according to Nielsen”

“Grocery business..delivered a low single digit positive comp”

“Value-pack sizing…helped increase market share in pets by 100 basis points vs. last year”

“Top layaway items included 50″ televisions, gaming consoles and tablets”

“Polaris – our search engine developed in-house is improving conversions by 10-15%”

“During Q3 we opened 59 Supercenters”

“We also continue to accelerate growth in our small formats, which now represents approximately 250 units, in the third quarter we opened another 33 Neighborhood  Markets across the country, this is in addition to the 23 we opened in the first half of this year, this format allows us to grow coast to coast with an eye towards localizing it for a local community.”

“Neighborhood Market formats comping in the mid single digits”

“On track to add 125 Supercenters and 80 small stores this fiscal year”

“Open 40-50 total units in Q4 including 20-25 small stores”

“We’ll generate over 2 billion impressions across social media this holiday, more than three times last years total.”

“Projecting Q4 comps…from 1%-3% for Walmart US”

Sam’s Club breakout Q3

Q3 Sam’s Club comp sales, without fuel:  +2.7% from Q3 last year

“7 new clubs opened (Q3)”

“Traffic up 1.5% and ticket up 1.2%”

“Disappointed that comp sales were beneath our guidance”

“Rotisserie chicken — when there is one in the basket ticket is larger”

“Reduced prices on apples..beauty and baby.”

“Baby category up double digit comps with improvement in distribution”

“Lowered prices on condiments, cooking oil and paper products”

“….learn from our memebership pilot in Texas”

“Projecting Q4 comps…from 1.5%-3.5% for Sam’s Club”

https://news.walmart.com/news-archive/investors/walmart-reports-q3-eps-of-108-reaffirms-top-end-of-full-year-eps-guidance-company-is-well-positioned-for-q4-holidays-1759095

Walmart’s New Subscription Service Offers a Box of Goodies on the Cheap  “Today it (Walmart) launches Goodies Co., a monthly service that will send you a package of sweets and snacks for $7, including shipping. The twist on this particular offering is something that the megaretailer does best — pricing things unbelievably low.  Goodies, which is coming out of beta today, is being run entirely by @WalmartLabs, Walmart’s tech team in San Bruno, Calif. While it continues in the experiment phase (as evidenced by not using the Walmart brand yet), the employees at @WalmartLabs will curate and source the brands — even though Walmart stores represent the largest grocer in the country.”  https://www.walmartlabs.com/walmarts-new-subscription-service-offers-a-box-of-goodies-on-the-cheap/ 

“Hate big box stores? Home Depot wants you to feel the love” by Steve Payne in Canadian Contractor:  “The challenge for the Home Depot (and all retailers), Hamad said, was to “make an emotional connection with contractors.” And this is often difficult, he admitted, because “25 per cent of contractors, only, go to [our] pro desk. The other 75 per cent don’t. They shop in the aisles.” https://www.canadiancontractor.ca/industry/hate-big-box-stores-home-depot-wants-you-to-feel-the-love#ixzz2C9QV12Or

“Big Businesses Find a Cause They Can Support: Small Businesses” by Robb Mandelbaum in The New York Times.  “Big businesses reaching out to help smaller businesses has come into vogue since the recession.  And several corporations have run contests — Wal-Mart, Chase Bank and Staples have furnished winning small companies with opportunities for retail distribution, capital and office equipment.”  https://www.nytimes.com/2012/11/15/business/smallbusiness/samuel-adams-brewer-counsels-small-businesses.html?pagewanted=all

NBC News — “Target employees protest over Thanksgiving shifts” by Ben Popken. “Target employees are seeing red after the retailer announced its stores will open at 9 p.m. on Thanksgiving night, cutting into holiday time for workers. An online petition asking Target to not open on Thanksgiving has over 179,000 signatures, and the number continues to rise.” https://lifeinc.today.com/_news/2012/11/13/15136983-target-employees-protest-over-thanksgiving-shifts?lite 

“How The Little Boston Shop Polka Dog Bakery Wound Up In Target” by David Cooperstein at Forbes. “How they were found remains a mystery. Ironically in today’s world, Target reached out to the owners of Polka Dog with a letter. Except for a comment about having scouts around the country, Deb and Rob do not know for sure how they were chosen to get that letter.”  https://www.forbes.com/sites/davidcooperstein/2012/11/13/how-target-put-main-street-into-its-big-box-brand/

“Analysis: Amazon faces new obstacles in fight for holiday dollars” by Alistair Barr in Reuters. “”The big retailers are in a much better space than they were last year,” Nemer said.  Wal-Mart, the world’s largest retailer, has probably made the most progress online, the analyst added.  It launched a new search engine for Walmart.com this year that has led to shoppers being 10 to 15 percent more likely to purchase after searching for products on the site, according to Wal-Mart.  Wal-Mart also recently started same-day delivery tests in San Francisco, San Jose, Northern Virginia, Philadelphia and Minneapolis, using some of its 4,000 stores as distribution centers for quicker shipping of online orders.”  https://www.reuters.com/article/2012/11/14/us-amazon-holiday-idUSBRE8AD09U20121114

“Walmart Kicks Sustainability Up Another Big Notch” at sustainablebusiness.com.  “Right now, the Walmart Sustainability Index covers about 100 different categories such as apparel, electronics and toys, and  that number should double by the end of the year. Roughly 500 suppliers have gone through the evaluation process.”  https://www.sustainablebusiness.com/index.cfm/go/news.display/id/24279 

“Home Depot Adopts Feline Holiday Mascot” by Natalie Zmuda at Ad Age.  “…And so was born Richard the Cat. Described as quick-witted and sarcastic, on his Tumblr page Richard says his family is “‘how-to helpless’ — especially around the holidays.” With that in mind, Richard will document his family’s disasters for consumers’ enjoyment during the holiday season. He’ll also be tweeting @RichardTheCat and photo bombing customers posing with their Christmas trees at Home Depot’s in-store Social Booth. There are also plans for Richard to pop up on Facebook, Pinterest, Instagram and Foursquare. Home Depot is working with Carrot Creative on the project.”  https://adage.com/article/cmo-strategy/home-depot-adopts-feline-holiday-mascot-richard-cat/238323/ 

“Meijer Upgrades Meat Department” by Roseanne Harper in Supermarket News.  ““They took out their meat cutters at the time to try to stay competitive, but you can’t out-Wal-Mart Wal-Mart. So, now they’ve decided to do something to differentiate themselves.”   https://supermarketnews.com/meat/meijer-upgrades-meat-department#ixzz2CFxQF59I

“Rona woes: Stock soars after major shareholder calls for overhaul” by Ross Marowits in The Canadian Press.  “Rona’s shares surged Wednesday after the company’s second-largest institutional shareholder said it was seeking to sweep out the existing board and install new directors.”  https://www.edmontonjournal.com/business/Rona+woes+Stock+soars+after+major+shareholder+calls+overhaul/7547094/story.html

 

Eye-on-Retail Tipsheet 11/14/12

Home Depot 3Q results edge up, beat Street’s view by Mae Anderson in AP.  “Blake’s statement signaled a “stronger tone” on the housing market than in prior quarters, said NBG Productions analyst Brian S. Sozzi, who called the remarks encouraging.”  https://www.google.com/hostednews/ap/article/ALeqM5h5wqndoxklbLIiQhqZaE6NLqJ6Ng?docId=4a922de3266b404ea8ce2fcf2b7096a8

—————————————————————————————————-

Digging deeper into the Home Depot earnings call….  

Pro business

Frank Blake: “Larger Pro’s doing better than smaller Pro’s.”

Carol Tome: “But only 13% of Pro sales are with larger Pro’s.”

Housing recovery

Blake: “So the positive comp in this quarter..combined with every quarter this year..and strength in the core of the business..we’re not lighting rockets over this and we don’t want to get out over our ski’s..but we’re starting to see the recovery of the housing market.”

China

Blake:  “After several years of effort, we concluded that we could not make our big box retail model profitable there.”

Holiday sales 

Tome:  “Don’t forget that last Dec. we had a positive comp in the US of 7.1% so we’d better have a good holiday to comp that.”

Departments that comped

Craig Menear: “Dept’s that outperformed the company avg. comp were:  lumber, decor, paint, kitchen, outdoor garden, indoor garden, lighting, bath, electrical, hardware and flooring.”

Menear:  “Extra fall event and great weather drove double digit comps in: walk behind mowers, riding mowers, pressure washers, exterior stains and chemicals”

Avg. ticket

Craig Menear responding to a question regarding under $50 transactions being flat:  “When we look at transactions under $50, there are an awful lot of those that fall into a few categories…we’re very pleased how we did in outside garden..but when you look at what has happened in some categories…the average unit retail growth, for example led vs. incandescent bulbs…when you look at the expansion of what has happened in the retail side of paint, when you had transactions that have gone from under $20 to over $20, and..driving off-shelf special buys, value packs…that has led to a shift in transactions..”

——————————————————————————————————

How Walmart is going all out with mobile by Paul Sloan at CNET.  “The latest version of Walmart’s iPhone app includes something called “in-store mode,” which is available for the iPhone and coming soon for Android phones. That’s the key feature aimed at keeping Walmart shoppers buying from Walmart, even when what they want isn’t in the store and a rival outlet is just a few taps away in the palm of their hands… Two weeks after Walmart launched “in-store mode” with its app, roughly 60 percent of its shoppers opted to use it. Moreover, about 12 percent of Walmart’s online sales are now coming from customers who are inside a store and using “in-store mode.” All of Walmart’s 4,000 U.S. stores have an “in-store app.”   https://news.cnet.com/8301-1035_3-57548785-94/how-walmart-is-going-all-out-with-mobile/

“Dick’s Sporting Goods CEO Discusses Q3 2012 Results – Earnings Call Transcript” in Seeking Alpha. https://seekingalpha.com/article/1004531-dick-s-sporting-goods-ceo-discusses-q3-2012-results-earnings-call-transcript?page=1

Costco: “On the New Shopping List: Milk, Bread, Eggs and a Mortgage” by Stephanie Clifford and Jessica Silver-Greenberg in The New York Times.  “While Ms. Neubauer, 27, said she was surprised to find the warehouse club selling financial products, she and her husband saved about $200 a month by refinancing there this year. She also bought home insurance from Costco, she said, again because it was cheaper there.”  https://www.nytimes.com/2012/11/14/business/major-retailers-start-selling-financial-products-challenging-banks.html?_r=0

Rite-Aid presentation (PowerPoint) at Morgan Stanley Global Consumer Confidence on 11/13/12.  Includes company overview, current initiatives, new store formats, earnings guidance, etc.  https://www.riteaid.com/www.riteaid.com/w-content/images/company/investors/Morgan_Stanley_11_13_12.pdf

Walgreens presents (PowerPoint and audio) at Lazard Capital Markets Healthcare Conference on 11/13/12.  Takeaway fact — 65% of the US population lives within three miles of a Walgreens, compared to 43% living withing three miles of a Mass store.  https://wsw.com/webcast/lz13/register.aspx?conf=lz13&page=wag&url=http%3A//wsw.com/webcast/lz13/wag/

Family Dollar presentation (PowerPoint and audio) at Morgan Stanley Global Consumer & Retail Conference on 11/13/12.  https://corporate.familydollar.com/pages/investors.aspx

CVS presents (audio) at Lazard Capital Markets Healthcare Conference on 11/13/12.  https://phx.corporate-ir.net/phoenix.zhtml?c=99533&p=irol-EventDetails&EventId=4864716

Accenture Study Finds Half of U.S. Consumers Intend to Purchase Luxury Products in Next Six Months; Small Luxuries Entice Shoppers to Splurge.  “The top reason for shopping in physical stores is to see all the choices in person (38 percent). Nearly a third (30 percent) of shoppers in this category prefer online retailers to get the best price and one-quarter (25 percent) value the convenience of online shopping.The study also found that showrooming, or viewing a product in a store and then going online to make the purchase, plays an important role in luxury purchases. In the past six months, one in five consumers visited a store to experience a luxury product in person and then purchased the product online.”   https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121113005885&div=-1245645151

Survey: Nearly Half of Online Holiday Shopping Will Take Place on Tablets.  “44 Percent of Online Shoppers Will Turn to Tablets for Holiday Purchases this Year; Across Devices, 63 Percent Plan to use Online Catalogs and Gift Guides.  Detailed product reviews are one of the most important requirements for online shoppers, but lack of product information is their biggest gripe, cited among 39% of online shoppers.”  https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121113005391&div=-1245645151

 

 

Eye-on-Retail Tipsheet 11/13/12

Today at a glance:

Home Depot Q3 earnings call @ 9:00am EST.  https://phx.corporate-ir.net/phoenix.zhtml?c=63646&p=irol-irhome&HD%20INVESTOR&viewTaskName=ExternalDirectView

CVS to present at Lazard Capital Markets 9th Annual Healthcare Conference @ 9:00am EST. https://phx.corporate-ir.net/phoenix.zhtml?c=99533&p=irol-EventDetails&EventId=4864716 

Dick’s Sporting Goods — conference call to discuss Q3 earnings @ 10:00am EST. https://www.dickssportinggoods.com/investors

Rite Aid to present at Morgan Stanley Global Consumer & Retail Conference November 13 @ 1:35 EST.  https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121109005892&div=-1245645151

Walgreens  to present at Lazard Capital Markets 9th Annual Healthcare Conference @ 3:30pm EST.  https://investor.walgreens.com/

The News that Matters:

Highlights from Twitter Chat on 11/12 with Brooke Buchanan, Director, Communication & Sustainability at Walmart.  Hosted by Aman Singh at CSRwire and Nick Aster at Triple Pundit:

Walmart revealed that “buyers will have sustainability objectives in their evaluations next year” Asked what they’re doing with information collected via supplier sustainability scorecards, Walmart responded that “index scorecard data is being used by buyers in business planning and to drive innovation.”

Walmart said they’re the largest green power purchaser in the US and is piloting on-site industrial wind turbines, fuel cells and energy efficiency.  They have 170+ solar installations worldwide and a goal to have 1,000 by 2020.  Their goal is to reduce packaging by 5% by 2013 (using a 2008 baseline).  Walmart said that “suppliers can show sustainability leadership and help at https://www.walmartsustainabilityhub.com/

Asked which sector has responded most favorably to Walmart’s sustainability index they cited “real leadership from many categories – beer and wine, computers, cereals and others”.

Money quote from Walmart – “Our customers shouldn’t have to choose between products they love/can afford and green products.”

Link to Twitter Chat home page:  https://www.triplepundit.com/2012/11/walmart-sustainability-chat/

Hands on experience with new Amazon locker (Video) — “Who’s afraid of Amazon locker?” by Rocky Agrawal in Venture Beat:   “For the company that invented one-click ordering, the experience is surprisingly kludgy. The touch screen isn’t very responsive. (In the video, you can see where letters register incorrectly or don’t register at all.)  But despite my nitpicking of the user experience, this solves a real pain point for online commerce.”https://venturebeat.com/2012/11/12/whos-afraid-of-amazon-locker/#aBBhhVjKFgw72qvy.99

“ShopRunner Takes On Amazon With Local Delivery System For Online Retail Purchases” by Leena Rao in Techcrunch:  “The company’s service offers an Amazon Prime-like unlimited, free two-day shipping service from a number of online retailers with no minimum order size. The company’s network includes Lord & Taylor, Toys R Us, Sports Authority, GNC, drugstore.com, inc., Borders, PetSmart and Newegg.com.”  https://techcrunch.com/2012/11/12/shoprunner-takes-on-amazon-with-local-delivery-system-for-online-retail-purchases/

“Rona Luring Lowe’s Back to Bid With CEO’s Exit” by Frederic Tomesco in Businessweek: ““As a shareholder, we hope that Mr. Dutton’s departure signals that the Rona board will be reassessing all avenues to unlock shareholder value,” Richard Fortin, Calgary-based portfolio manager at Bissett Investment Management, said in a telephone interview. “The obvious one is going back to the table with Lowe’s.”  https://www.businessweek.com/news/2012-11-12/rona-luring-lowe-s-back-to-bid-with-ceo-s-exit

Target’s Black Friday to start at 9 p.m. Thanksgiving Day” by Chris Isidore in CNN Money:  “”We heard from our guests that they look forward to kicking off their holiday shopping with deal-hunting on Thanksgiving night,” said Kathee Tesija, executive vice president, merchandising, for Target. “Opening at 9 p.m. gives Target’s Black Friday guests a more convenient way to create an after-dinner shopping event that the entire family can enjoy.”  https://money.cnn.com/2012/11/12/news/companies/target-thanksgiving-opening/

“Apple retail stores most productive in US – by far” by Rik Myslewski in The Register: “According to a new study by the research firm Retail Sails, Apple’s real-world stores earned an average of $6,050 per square foot during the year ending in June. Tiffany pulled in a distant $3,017, and third-place yoga and running-gear purveyor lululemon athletica was far behind at $1,936.”  https://www.theregister.co.uk/2012/11/13/apple_retail_juggernaut/

“Lowe’s Iris Smart Kit Named as CES Innovations 2013 Design and Engineering Award Honoree.”  “Lowe’s entered the Smart Home market in July with the launch of its new, award- winning Smart Kit. Lowe’s offers three starter kits: Iris Safe & Secure, Iris Comfort & Control and Iris Smart Kit. Iris is available in more than 500 Lowe’s stores nationwide and on Lowes.com/Iris.”  https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121112006535&div=-1245645151

Eye-on-Retail Tipsheet 11/12/12

“Rona president and CEO steps down after 20 years” from Maclean’s:  “One of Rona’s largest shareholders says the home-improvement retailer’s board should launch discussions with U.S. rival Lowe’s following the sudden departure of long-time chief executive Robert Dutton…”Clearly, retailing has changed dramatically and you’ve got a tremendous competitor in Home Depot… the best course would be probably to open up discussions with Lowe’s.”  https://www2.macleans.ca/2012/11/09/rona-president-and-ceo-steps-down-after-20-years/

Target CMO Jeff Jones speaks from the Forbes CMO Summit on “The New Rules of Engagement”; from Jennifer Rooney at Forbes (Video):  “For me the one thing is almost the validation that we’re all struggling with the one thing…what does engagement mean in today’s world…the reality is brands today and the concept of brand management which is really one about I as a marketer get to control my brand…it’s so clear that it (engagement) is at the center of what all of us are trying to think about…nobody has the perfect engagement model…we’re all struggling with the same thing but we know how important it is.”  https://www.forbes.com/sites/jenniferrooney/2012/11/10/behind-the-brand-why-target-got-revenge/

“How Home Depot Became a Pinterest Powerhouse” by Allison Boyer in blogworld:  “One might not at first think that power tools and lumber have a place on the Internet’s current social media darling, Pinterest, but this visual platform is being dominated by none other than Home Depot. Currently, Home Depot has over 12,000 profile followers on Pinterest.”  https://www.blogworld.com/2012/11/09/how-home-depot-became-a-pinterest-powerhouse-case-study/

“Walmart Black Friday Strike Being Organized Online For Stores Across U.S.” by Kathleen Miles at Huffington Post:  “Black Friday, the day after Thanksgiving regarded as one of the biggest shopping days of the year, may be dramatically different this year.  Organizers are planning a nationwide strike against Walmart, the largest retailer in the world, and are banking on a new strategy: online organizing.”  https://www.huffingtonpost.com/2012/11/08/walmart-black-friday-strike-organized-online-video_n_2094698.html#slide=1605073

“Earnings Preview:  Home Depot 3Q Results” in Bloomberg Businessweek:  “Home Depot Inc., the nation’s largest home-improvement retailer, reports third-quarter results before the market opens on Tuesday…Analysts expect higher net income and revenue from the largest U.S. home-improvement retailer.”  https://www.businessweek.com/ap/2012-11-09/earnings-preview-home-depot-3q-results

For $100K you may be able to buy your own Sears Hometown & Outlet Store in Cleveland….Sears eyes return with outlet store” by David Davis in Cleveland Daily Banner:  “Sears Hometown Stores regional development manager Jackie Adams said Tuesday that the retailer is looking for an entrepreneur in Cleveland to own and operate a store of about 10,000 square feet in size.”  https://www.clevelandbanner.com/view/full_story/20763963/article-Sears-eyes-return-with-outlet-store?instance=homefirstleft

Behind the Scenes of Target’s Holiday Commercial:  “We wanted to do something slightly different this year, so the notion of “Dream Big. Save bigger” was perfect.  This is also one of the first years where we’re really stressing the “Expect More. Pay Less” brand promise in every single commercial. We wanted to turn these commercials not just into a fantastical world, but into a world that everyone can afford.”  https://abullseyeview.com/video-bullseye-is-coming-to-town-behind-the-scenes-of-target-holiday-commercial/?utm_source=rss&utm_medium=rss&utm_campaign=video-bullseye-is-coming-to-town-behind-the-scenes-of-target-holiday-commercial

“The Walmart Effect: 4 Best Practices for Dealing with that First Huge Order” by Christopher Koch in Forbes:  “When a small business gets its first big order it can seem like manna from heaven. But wipe those dollar signs out of your eyes because it’s really more like a shock to the system.”  https://www.forbes.com/sites/sap/2012/11/07/the-walmart-effect-4-best-practices-for-dealing-with-that-first-huge-order/

“7-Eleven, Radio Shack Lead List of Fastest Phone Responders” by Adam Blair in RIS:  ” A complementary study conducted in May 2012 found that consumers were 59% more likely to buy and 73% more likely to recommend a brand when their call was answered in less than one minute.”  https://risnews.edgl.com/retail-trends/7-Eleven,-RadioShack-Lead-List-of-Fastest-Phone-Responders83162

“Publix profits rise 18.1% from last year” by Kyle Kennedy at Ledger Media Group:  “You have to give people a reason to shop at your store, and you can’t be in the big middle (middle ground of supermarkets) anymore,” said George, chairman of St. Joseph’s food marketing department.”  https://www.newschief.com/article/20121109/NEWS/121109971/-1/news02?Title=Publix-profits-rise-18-1-from-last-year-

“Walmart Canada unveils first-of-its-kind supercube trailer” at Daily News:  “The extended semi-trailer of up to 60-ft, 6 inches provides about 28% more volume than the existing 53-ft semi-trailer with a floor that is lower, not actually higher, than a typical trailer currently in use.”  https://www.trucknews.com/news/walmart-canada-unveils-first-of-its-kind-supercube-trailer/1001824268/

 

Week at a Glance:

11/12

“Twitter Chat” with Walmart sustainability Exec Brooke Buchanan @5pm EST.  https://www.triplepundit.com/2012/11/walmart-sustainability-chat/

11/13

Home Depot Q3 earnings call @ 9:00am EST.  https://phx.corporate-ir.net/phoenix.zhtml?c=63646&p=irol-irhome&HD%20INVESTOR&viewTaskName=ExternalDirectView

CVS to present at Lazard Capital Markets 9th Annual Healthcare Conference @ 9:00am EST. https://phx.corporate-ir.net/phoenix.zhtml?c=99533&p=irol-EventDetails&EventId=4864716 

Dick’s Sporting Goods — conference call to discuss Q3 earnings @ 10:00am EST. https://www.dickssportinggoods.com/investors

Rite Aid to present at Morgan Stanley Global Consumer & Retail Conference November 13 @ 1:35 EST.  https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121109005892&div=-1245645151

 Walgreens  to present at Lazard Capital Markets 9th Annual Healthcare Conference @ 3:30pm EST.  https://investor.walgreens.com/

11/14

Rite Aid to present at Citi 2012 North American Credit Conference: @ 9:20am EST  https://www.riteaid.com/company/investors/presentations.jsf

11/15

Walmart Q3 earnings release @ 7:00am EST.  https://news.walmart.com/events/investors/fy2013-q3-earnings-release-4222642

Ross Stores Q3 earnings release and conference call @ 8:30am EST.  https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121108005460&div=-1245645151

Dollar Tree Q3 earnings conference call: @ 9am EST.   www.dollartreeinfo.com/investors/news/events.

Target Q3 earnings call @10:30am EST.  https://investors.target.com/phoenix.zhtml?c=65828&p=irol-EventDetails&EventId=4829614

Walgreens to present at Credit Suisse 2012 Healthcare Conference @1:30pm EST.  https://investor.walgreens.com/