Friday’s Eye-on-Retail Tipsheet: Kroger Bad at Social | Wmart’s $50 Mil Loan | Loyalty Lie


“The Loyalty Lie” by Doug Stephens at The Retail Prophet.  “Loyalty program members are not, in effect, any more or less loyal. What’s worse, according to the same study, is that 81% of loyalty program members don’t even understand what their rewards entitlements consist of or how they’re paid out, which shouldn’t be surprising, given that the survey also found the average consumer belongs to as many as 18 different loyalty programs!”  Read more


“Amazon Takes Tax Fight to Supreme Court” by Brad Stone at Businessweek via Mashable.  “Amazon clearly dislikes New York’s law. It’s confusing to customers and is easily circumventable by sellers. E-commerce startups can simply avoid authorizing any local affiliates, and Bezos most certainly doesn’t want some wily entrepreneur to do what he did and create the next Amazon. The company has already cut off its affiliates in New York, as well as in Illinois.”  Read more


“Entrepreneurs campaign for shelf space on Walmart website” by Victor Ocasio at Orlando Sentinel.  “Haygood is the inventor of Under Drawers, a lightweight alternative to under-the-bed storage containers. Finding the money to get her product manufactured required some risky decisions — such as mortgaging the house — which is why she hopes that, from among thousands of product pitches nationwide, Wal-Mart picks her invention to feature on its popular e-commerce website.  “It’s scary, but I think it’s going to really be well worth it,” Haygood said.”  Read more


“Wal-Mart ready to loan $50 million to Bangladesh factories” at MSN Money.  “Wal-Mart Stores Inc told investors on Thursday that it could provide up to $50 million in low-interest loans or other types of payments to Bangladesh factory owners for building improvements.  The money is part of the more than $100 million in loans and access to capital that a group of North American companies including Wal-Mart and Gap Inc pledged in July.”  Read more


“Target: What A ‘Sit On Your Hands’ Investment Looks Like” by Eli Inkrot at Seeking  Alpha.  “There’s always a reason to not like a company. Investments are risky, that’s why we’re compensating for partnering with even the best companies in the world.  Yet despite those reasons – along with the 17 other risk factors listed in the company’s 10-K – I’m about to ease those fears rather quickly.”  Read more


“Ben & Jerry’s new flavor: fancier stores” by Anne VanderMay at Fortune.  “Ellen Kresky is trying not to say anything bad about the old Ben & Jerry’s store design.  “Somebody said it best, I don’t remember if it was during the consumer research that we did or … no, I can’t say this — ” says Kresky, the brand’s creative director. Then she says it: “It felt to them that it was like walking into a children’s playground.”  Read more


“How Kroger uses Facebook, Twitter, Pinterest and Google+” by David Moth at Econsultancy.  “In the latest instalment of our series of posts looking at how major brands use social media I’ve decided to turn the spotlight on Kroger…it owns a number of subsidiary chains as well as its Kroger-branded stores…But as we shall see, its huge profit margins don’t necessarily translate into success in social.”  Read more


“Kroger To Webcast Second Quarter Conference Call With Investors” at WSJ.  “The Kroger Co. will host a conference call with investors on Thursday, September 12 at 10 a.m. (ET) to discuss financial results for the second quarter of fiscal 2013.”  Read more


“Mall developers feel the pull of Africa’s consumer boom” at Reuters.  “An industry veteran of 30 years, Barkan’s U.S. home market was “graying”, while the youthful, underdeveloped African continent offered a sweet spot, with a rapidly expanding middle class and no competition from online retailers.  “When Wal-Mart announced it was buying 51 percent of Massmart, I knew that if I was going to stay in business, Africa was where I had to go,” he said.”  Read more


“Grocery Retailers Embrace Multichannel Tech Tools” at eMarketer.  “A major area of interest for digitally minded grocers is increasing the ability of customers to interact with retailers through a variety of channels. The idea of ordering online and picking up in-store, once a rare experience, is quickly becoming the norm. The survey found that half of those polled already offered the service, and that more than half of those that didn’t yet have it planned to offer it within 12 months.”  Read more


“Retail loyalty programs add tiers to reward big spenders” by Kelli B. Grant at CNBC.  “When pretty much every retailer is offering a program with points per purchase, tiers offer that extra incentive to choose one over another, said Jeff Berry, senior director of knowledge development for LoyaltyOne. “It almost has become the overall scorecard for customers, so they understand where they are relative to where they could be,” he said.”  Read more


“Youngsters believe future of the UK high street store is as a showroom” by Helen Leggatt at Biz Report.  “Stores in the UK have had to close down through recession and, says Amaze, “due to massive changes in how people use technology”. According to the findings to date in their five year “Amaze Generation” study of 10-15 years olds and their use of technology, the high street has little chance of recovering in the wake of technology’s grip.”  Read more


Follow on Twitter @retaileyeretail


Have a great weekend!


Thursday’s Eye-on-Retail Tipsheet: Home Depot Peak? | Whole Foods Worry | Walgreens Sued


“Industry Trends Might Not Favor Home Depot Much Longer” by Dan Moskowitz at Motley Fool.  “Many investors will point to a strong housing recovery in California as a major positive. However, a large portion of the housing boom in California has been thanks to investment firms (and foreign investors) buying properties, not families looking for starter homes or upgrading to larger dwellings. That being the case, the housing boom in California should be looked at with at least some skepticism when it comes to long-term sustainability.”  Read more


“The Home Depot To Present At Goldman Sachs Twentieth Annual Global Retailing Conference”  “The Home Depot today announced that Frank Blake, chairman and CEO, and Marvin Ellison, executive vice president, U.S. Stores, will present at the Goldman Sachs Twentieth Annual Global Retailing Conference in New York, NY. The presentation will begin at 11:20 a.m. ET on September 11, 2013.” Read more


“Wal-Mart promises more U.S. made products” by Carol Costello at CNN.  “CNN’s Carol Costello talks with a Wal-Mart executive about their plan to sell more U.S. made goods.”  See the video


“Is There a Reason to Worry About Whole Foods?” by Rich Duprey at Motley Fool.  “…And therein lies part of the problem for Whole Foods. Not only is there a wealth of choice for organic shoppers, but many of its rivals boast lower prices for their products. The “whole paycheck” brickbat hurled at the grocer is not unwarranted, and increasingly it has been forced to resort to promotional activity that could, if allowed to continue, undermine the rich margins it’s historically enjoyed.” Read more


“Wal-Mart to field questions on Bangladesh practices” at CNBC.  “Under scrutiny over a series of disasters at Bangladesh garment factories, Wal-Mart plans to field questions from investors at a briefing on Thursday, The Wall Street Journal reported on Wednesday.  Carol Schumacher, Wal-Mart’s vice president of global investor relations, told the Journal that the company’s goal was “to provide an update on this area of the business and to give you the opportunity to ask questions.”  Read more


“How a Giant Arrow Gets You to Eat More Fruits and Vegetables” by Kevin Drum at Mother Jones.  ““In retail, the customer tends to go to the right,” said Tim Taylor, the produce director for Lowe’s, Pay and Save, a regional grocery chain that let the scientists in to experiment with their arrows and mirrors. “But I watched when the arrows were down, pointing left, and that’s where people went: left, 9 out of 10.” Read more


“Walmart deal erases apartheid legacy” at Business Report.  ““Growing up we were very poor,” saus Kleynhans, 49.  Thanks to Wal-Mart Stores Inc.’s decision to import her wines, Kleynhans and her six sisters, who were once crammed into a two-roomed fisherman’s cottage along with her brother and parents, will soon make more money than ever.  “Maybe the time has come for us to be able to take a break and enjoy life,” she said.”  Read more


“Groupon takes aim at Amazon” at Portland Business Journal.  “Groupon Inc. is planning to open a network of North American warehouses that would directly compete with Seattle-based Inc.  The Wall Street Journal reports Groupon is planning a distribution center in Kentucky and adding additional centers.”  Read more


“Twitter Buys Trendrr to Track Social Conversations Across Media” by Cotton Delo at Ad Age.  “It’s the second major acquisition Twitter has made this year of an ecosystem company that conducted measurement and analytics on behalf of networks and brands around social conversations linked to TV. It reportedly paid $90 million for a former Trendrr competitor, Bluefin Labs, which was acquired in February.”  Read more


“Twitter is Hiring an Editor to Surface Vine’s Best Content and Creators” by Christina Chaey at Fast Company.  “Vine recently announced that it hit 40 million users, and now parent company Twitter is hiring its first editor to work on the app, which lets you create six-second stop-motion videos.  According to the job posting, the Vine editor’s primary responsibilities will be to discover and profile Vine’s best content creators and find new outlets to share the videos.”  Read more


“Missouri sues Walgreen Co. for deceptive pricing” by Kavita Kumar at St. Louis Post Dispatch.  “On Tuesday, Missouri Attorney General Chris Koster filed a civil lawsuit against the Deerfield, Ill.-based drugstore chain for engaging in what he called a pattern of false and misleading advertising and pricing schemes.  During a two-month investigation by his office, Koster said staff members visited eight Walgreens stores across the state, including two in the St. Louis region, and found that they were overcharged on about 20 percent of the items they purchased — or on 43 items out of 205 products.”  Read more


Follow on Twitter @retaileyeretail






Wednesday’s Eye-on-Retail Tipsheet: Target’s ‘immaterial’ Digital Sales | Tweet & Sell | Rite Aid’s Winning Strategy?


“Web Sales Remain Small for Many Retailers” by Shelly Banjo & Paul Ziobro at WSJ.  “Target, for instance, has highlighted its online performance, telling investors last week that its digital sales have grown by double-digit percentages and that it is “moving quickly to ensure we stay relevant in an increasingly digital marketplace.”  Asked by the SEC to quantify its online results, the discount retailer said in June that “digital sales represented an immaterial amount of total sales.”  Read more


“Twitter hires former Ticketmaster CEO to lead online commerce” by Jessica Guynn at LA Times.  “Hubbard said in an interview that Twitter was aiming to “get people in the moment to buy and to act on their passions.”  “That to me is the opportunity. I look at Twitter as one of the greatest discovery and distribution platforms in the world,” he said.  He said Twitter would form partnerships with merchants and offer them tools to sell goods and services inside tweets.”  Read more


“I worry about JC Penney-Sears model: Retail pro” at CNBC.  “After the Bill Ackman blowup at J.C. Penney and another tough quarter at Sears, turnaround expert and entrepreneur Marcus Lemonis told CNBC on Tuesday he’s “not sure the market can handle both of them.” Read more


“Amazon Adds Ability to Buy Goods From Within Mobile Apps” by Danielle Kucera at Bloomberg.  ““Imagine a developer of a nutrition and fitness app can now offer their customers the ability to purchase vitamins, supplements and fitness gear within the app, directly from Amazon,” Mike George, Amazon’s vice president in charge of games, app store and cloud drive, said in the statement.”  Read more


“Commander-in-cheap: US is a bargain manufacturer” by Kiran Moodley at CNBC.  “According to the Boston Consulting Group, the U.S. is fast becoming one of the lowest-cost countries for manufacturing in the developed world…The report states that export manufacturing in the U.S. is a unsung hero of the economic recovery, noting: “Despite all the public focus on the U.S. trade deficit, little attention has been paid to the fact that the country’s exports have been growing more than seven times faster than GDP since 2005.”  Read more


“Why Wal-Mart Will Never Pay Like Costco” by Megan McArdle at Bloomberg.  “Costco has a tiny number of SKUs in a huge store — and consequently, has half as many employees per square foot of store. Their model is less labor intensive, which is to say, it has higher labor productivity. Which makes it unsurprising that they pay their employees more.”  Read more


“Consumer Reports Finds Private-Label Foods Often Meet Or Eclipse National Brands In Quality” at Sacramento Bee.  “CR’s expert taste-testers judged 33 of 57 store-brand foods to be as good as or better than the big name brand.  In categories such as ice cream, trail mix, mozzarella, mixed vegetables, and more, Consumer Reports found at least one store brand from the national grocers Costco, Kmart, Sam’s Club, Target, Trader Joe’s, Walmart, and Whole Foods that was equal in quality to the national brand.”  Read more


“Has Rite Aid Found a Winning Strategy?” by Robert Hanley at Motley Fool.  “Perhaps one of Rite Aid’s best moves was partnering with retail health giant GNC for store-within-a-store shops that leverage GNC’s strong brand name in the vitamins and nutritional supplements area. There are currently over 2,100 shops in Rite Aid’s national network, roughly 47% of its overall store base, with plans to roll out the format to additional stores in the future.”  Read more


“Retail Innovation Shines at Sears Startup + Developer Challenge” at WSJ.  “Sears announced the winners of its Startup + Developer Challenge, the retailer’s latest code-a-thon designed to foster digital innovations that further enhance the Shop Your Way member experience and strengthen the company’s long-standing relationships and develop new ones in the technology community of Silicon Valley. More than 150 participants competed over three days for the chance to see their application brought to life by Sears.”  Read more


Follow on Twitter @retaileyeretail


Tuesday’s Eye-on-Retail Tipsheet: Costco stays Big | Wmart Brakes in India | Five Below needs Brakes


“Wal-Mart hits the brakes on expansion in India” by Andria Cheng at Market Watch via Financial Times.  “Wal-Mart, which has counted on overseas markets to grow, has suffered a setback and is putting its expansion in India on hold, the Financial Times reported.  Wal-Mart hasn’t added a wholesale, or so-called cash-and-carry, shop to its 20-store portfolio since late October, the FT reported, adding it opened its first such location in 2009 in a joint venture with New Delhi-based Bharti Enterprises.”  Read more


“Don’t Expect Smaller, Urban Costco Stores Anytime Soon” by Chris Morran at The Consumerist.  “Jelinek, who worked his way up from warehouse manager to President and CEO, explains that Costco’s goal is to maintain a certain level of simplicity.  “If you start to drift and become complicated, it costs you a lot of money to be complicated,” he says, adding that this higher cost would then have to be passed on to the customer through higher prices, which would defeat the purpose of operating a discount warehouse store.” Read more


“Five Below Might Be Growing too Fast” by Dan Moskowitz at The Motley Fool.  “Five Below continues to open stores at a rapid rate. In fact, it plans on opening 60 stores this year. But what might really blow your mind is that Five Below wants its store base to grow at a rate of 20% annually over the next five years, and it ultimately plans on reaching a store count of 2,000. Remember, there are currently just 258 stores.  Five Below relies on hot teen and pre-teen trends, and almost everything it sells is discretionary.”  Read more


“Whole Foods & Starbucks Team-Up” at WSJ.  “Whole Foods will begin stocking 12 Evolution Fresh juices and three Evolution Harvest snack bars Tuesday. The snack line will eventually expand to include trail mixes, freeze-dried fruit and fruit snacks, opening up an opportunity for growth in a popular segment.”  Read more


“Mobile Commerce Sales Top $10 Billion in First Half of 2013, comScore Estimates” by Jason Del Ray at All Things D.  “The $10.6 billion total still accounts for less than 10 percent of total digital commerce sales, though the first iPhone was released just six years ago.” Read more


“How Do Target Cartwheel Coupons Work” at My Sweet Savings.  “The Target Cartwheel offer is taken off AFTER manuf. coupons and Target coupons.  Target Cartwheel offers may be used up to 6 times per day. You may use Target Cartwheel offer in conjunction with your manuf. coupons AND Target coupons for a triple stack! If you have a Target Red Card you may use that as well!”  Read more


“Home is where the spending is for cost-conscious consumers” by Matt Townsend & Cotten Timberlake at Bloomberg via Seattle Times. “Shannon Burke is typical of many American shoppers these days. She’s pouring money into her home and cutting back on everything else.  “If we don’t need it, we don’t buy it,” said Burke, a 33-year-old mother from Abington, Mass., whose two kids are mostly making do with hand-me-downs. “The money can be spent on our home. The more valuable our home is, the better it is for us in the long run.”  Read more


“Penney’s largest investor to sell entire stake” at LA Times.  “The news sent its shares down nearly 3 percent to $13 per share in after hours-trading after closing down 15 cents to $13.35 in the regular session.  The latest development comes as the beleaguered chain is trying to recover from a botched transformation plan spearheaded by its former CEO Ron Johnson that led to disastrous financial results.”  Read more


“Best Buy Founder Schulze Plans Stock Sale to Diversify Assets” by Chris Burrit at Bloomberg.  “Shares of Best Buy have doubled in the past year after Chief Executive Officer Hubert Joly, who took charge in September, matched rivals’ online prices and cut annual costs by $390 million through Aug. 3…“The guy’s net worth has doubled in the past year,” said Michael Pachter, an analyst at Wedbush Securities in Los Angeles. “Why not take some off the table?”  Read more


Follow on Twitter @retaileyeretail


Monday’s Eye-on-Retail Tipsheet: Walmart’s SPARC 2.0 | H.Depot’s China Graveyard | Whole Foods Sells LPs


“Wal-Mart suppliers get tutorial on SPARC 2.0” by Kim Souza at The City Wire.  “SPARC – the Supplier Portal Allowing Retail Coverage initiative – is being broadly rolled out by Wal-Mart during the next six weeks at roughly 150 stores a day in an effort to raise on-the-shelf availability of products sold by the retailer. Mike Graen, director of strategy and innovation for Wal-Mart, spoke candidly to a room full of suppliers who agreed that one of the most frustrating issues they face is products out-of-stock.”  Read more


“Touring the Home Depot Graveyard in China” by Trevor Williams at Global Atlanta.  “Although one store has been demolished to make way for a mall, most of the shuttered stores still sit empty, eerily frozen in a time when one was the scene of a “hostage situation.” Confirmed by Home Depot CFO Carol Tome, Chinese media have reported that a few of Home Depot’s 850 employees used cars to block doors, locking company leaders in for 80 hours after being abruptly informed of the store closings.”  Read more


“Walmart Campus Store #3:  Report from Georgia Tech” by Lindsay Purcell at Technique.  “Tech was chosen, in part, because of Walmart’s connection with Tech, as the CEO of Walmart, Mike Duke, is a Tech alumni.  “In this case, the city of Atlanta and Georgia Tech have close ties to executive leadership at Walmart which may have generated interest in making our store one of the first to open,” Steele said…“The performance of the Tech store will be watched closely by Walmart Executives to determine if the format has legs… I expect to see Walmart expand this concept further onto college campuses, in urban areas, etc. Walmart Campus stores seem to make a lot of sense on the surface,” Long said.”  Read more


“Lowe’s Discovers Vine ‘Celebrity’ “ by Shareen Pathak at ad Ad Age.  “Twitter’s Vine platform is birthing a new generation of celebrities that brands are latching on to, paying out anywhere between four-figure and five-figure sums for a six-second piece of content.  One of those “celebrities” is photographer and director Meagan Cignoli, who was “discovered” by home improvement retailer Lowe’s when the company was hunting for someone to direct videos for a Spring campaign called #FixinSix, which showed home improvement tips via Vine.”  Read more


“Whole Foods Is Selling LPs Now” by Lily Hay Newman at Gizmodo.  “Whole Foods has begun selling vinyl at five locations in and around LA, including West Hollywood, Santa Barbara and Venice…Whole Foods says that they will stock a “wide selection” of LPs from Frank Sinatra to Daft Punk and Bob Marley. The records are being marketed alongside LSTN headphones, the purchase of which helps hearing impaired people through the Starkey Hearing Foundation.”  Read more


“The end of the dollar store recovery” by Nin-Hai Sing at Fortune.  “Dollar stores were one of the few bright spots in U.S. retail during the Great Recession as cash-strapped consumers looked to do more with less. And while many are still going to these discounters for bargains, they’re also buying less.”  Read more


“Marketers drool over Pinterest ad potential” at News-Press.  “Lowe’s has 3.6 million followers on Pinterest and has been watching Pinterest’s Rich Pins feature, which allows pinners to post more specifics on products, such as dimensions and prices.  Pinterest is being “really smart about how they’re evolving the product,” says Brad Walters, Lowe’s director of social media. “We would consider” an advertising platform from Pinterest if it were an option.”  Read more


“Wal-Mart Opening 90 Stores In Africa” at Value Walk.  “Wal-Mart is looking to enter hot growth markets, such as Nigeria and Angola. Both countries have been enjoying an oil boom, which has supported strong economic growth over the last few years. The aggressive expansion plan follows Walmart’s 2.4 billion dollar acquisition of MassMart, a major big box retailer in South Africa. Given Walmart’s track record in other emerging nations, such as Mexico and China, investors have good reason to feel optimistic.”  Read more


“Accenture study reveals disconnect between CIOs and CMOs” by Marianne Wilson at Chain Store Age.  “Despite CIOs appearing more open to engaging with CMOs, only 45% of CIOs say that supporting marketing is near or at the top of their list of priorities…while CMOs claim that gaining customer insight is their number one motivator for collaborating with IT, CIOs rank this tenth on their list of reasons to work together. CIOs’ top motivation for collaborating is to improve the customer experience, which CMOs rank as their third most important motivator.”  Read more


Follow on Twitter @retaileyeretail

Friday’s Eye-on-Retail Tipsheet: Dollar Tree Up | Christmas in August | Walmart Summit


“Dollar Tree 2nd-Quarter Earnings Rise 4.6% on Higher Sales” at the Wall Street Journal.  “”Sales, customer traffic, average ticket, earnings and operating margin all continue to grow,” said Chief Executive Bob Sasser. “Customers are responding in record numbers to our outstanding values in both discretionary and consumable merchandise categories.”  Read more


“Walmart summit focuses on need for more U.S. manufacturing jobs” by Sandra Pedicini at Orlando Sentinel.  “”I really think we’re at a tipping point now for U.S. manufacturing,” Wal-Mart Stores chief executive officer Mike Duke said. “Transportation costs are going to continue to rise, so I think producing product near consumers is a phenomenon that’s happening here in the United States and will be a tremendous opportunity.”  Read more


“Walmart Goes After Silicon Valley Talent” by Cadie Thompson at CNBC.  “We are clearly going to be investing in technology, no doubt about it. Whether it’s acquisition or our own capabilities,” Duke said. “I spent Monday and Tuesday at our office in San Bruno, Calif. We have acquired talent, the best talent in the world, the smartest talent in Silicon Valley. … So we will invest in areas of technologies, and at the same time we are going to continue to invest in stores.”  Read more


“Retailers Sounding Sleigh Bells in August” by Kelli Grant at CNBC.  “There is some basis for the Christmas-in-August approach. “We do know that 40 percent of holiday shoppers say they begin shopping before Halloween,” said Kathy Grannis, spokeswoman for the National Retail Federation. If it draws in even a few extra customers, early action can be a big advantage in a competitive season, she said.  Read more


“Thrifty shoppers threaten retail recovery in Canada” by Marina Strauss at Globe & Mail.  “Statistics Canada said retail sales fell by 0.6 per cent in June from a month earlier, weaker than analysts’ forecast of a 0.4 per cent drop. Business was bruised by the effects of Alberta flooding and a Quebec construction strike, but perhaps more worrisome was a steeper slide in Ontario despite higher car sales there.” Read more


“U.S. Retailers Cautious About Second Half as Sales, Traffic Slow” by Natalie Zmuda at Ad Age.  “It’s a puzzling trend. Retailers have cited higher gas prices, the 2% rise in Social Security taxes and rising mortgage rates as consumer concerns that are impacting sales. Pent-up demand for big-ticket items like cars, appliances and home improvements could also be tempering spending on apparel and other discretionary items.”  Read more


“Why shlep? A new app lets you get Costco-like savings on bulk items without a trip to the store” by Phyllis Furman at New York Daily News.  “Soho-based Boxed, which bills itself as “Costco in your pocket,” says it will offer one- to two-day delivery and deep discounts on hundreds of products sold in bulk.  “We bring wholesale savings to people’s doorsteps,” Boxed CEO Chieh Huang — the founder of popular mobile gaming company Astro Ape — told the Daily News. “You don’t have to take out hours of your day to load and unload.” Read more


“Sears declining appliance sales is the shocker behind bigger-than-expected loss” by Andria Ching at Market Watch.  “They should be thriving now with the upturn in the housing market,” Craig Johnson of Customer Growth Partners said in an interview. “They are still No. 1, but barely.”  Johnson said Sears has lost its market share to about 27% from 41% in the early 2000′s. In comparison, both Lowe’s and Home Depot have grown their share from less than 10% to about 22% and high teens each to be No. 2 and No. 3 in the market.”  Read more


“Sears Earnings Call Highlights”  See the PowerPoint


“Shutterstock to Provide Facebook Advertisers with Free Stock Images” by Addy Dugdale at Fast Company.  “On a blogpost entitled Big Updates For Small Businesses, the social network said this:  “In the coming weeks, marketers will have access to millions of images from the Shutterstock library — at no additional cost. Shutterstock’s images are commercially licensed and available for use in all Facebook ad formats. Thanks to Shutterstock’s API and search capabilities, these images will be fully searchable and accessible directly within Facebook’s ad creation tool.”  Read more


Follow on Twitter @retaileyeretail


Have a great weekend!



Thursday’s Eye-on-Retail Tipsheet: Lowe’s & Target Earnings Highlights | Target Soft | Kroger’s Dillon = Sam Walton


“Top 10 Things Heard on the Lowe’s Earnings Call”

Robert Niblock (CEO)

1) Comparable sales for the quarter were positive 9.6%, driven by a healthy balance of ticket and transaction growth. As expected, we recovered most of the outdoor sales we missed in the first quarter from unfavorable weather conditions.

2) We expect the (Orchard Supply) deal to close at the end of August and to be funded with operating cash flow.

Rick Damron (COO)

3) Our outdoor product comps increased approximately 13% in the second quarter, compared to a decrease of 7% for the first quarter, resulting in an outdoor comp of 3.5% positive.

4) Categories such as hardware, paint, and [fashion] electrical not only achieved mid single digit comps, but did so with solid growth and gross margin rates.

5) The financial benefit of value improvement is greatest once we have reached stabilization. That is, when we are past the clearance and selling only new product assortments. We estimate that roughly 50% of our business was at this stage in the second quarter.

6) We continue to expect average mid single digit comps and roughly 100 basis points of improvement in gross margin rate for product lines that have reached stabilization.

7) We continue to see good growth in the pro for the quarter. Our pro business outperformed our sales totals, or comp totals. You look at it overall, it’s roughly, we say, approximately 25% of our total volume at this point in time.

8) Whether it’s kitchen cabinets, whether it was appliance sales, or whether it was fashion plumbing sales, we’re seeing strength in those categories and interest and traffic in those categories that we haven’t seen in previous quarters.

Robert Hull (CFO)

9) Comps were 9.5% in May, 8.5% in June, and 11.3% in July. For the quarter, comp transactions increased 5% and comp average ticket increased 4.4%.

10) For the quarter, the percentage of resets completed increased from 50% to 70% while the percentage of resets stabilized increased from 30% to 50%.

Read the full Lowe’s transcript


“Top 10 Things Heard on the Target Earnings Call”

Gregg Steinhafel (CEO)

1) Our second quarter comparable sales increased 1.2% below our expectations going into the quarter, but nearly 2 percentage points ahead of our first quarter pace.

2) While emerging strength in the housing and automotive sectors is a long term positive, the near term spending on these big ticket items is crowding out other spending.

3) Second quarter sales in our digital channels grew in the teens overall with mobile traffic and sales continuing to grow at a triple digit pace.

4) We opened another 44 Canadian Target stores in the second quarter putting our total at 68 today on the way to our goal of operating 124 Canadian stores by year end.

5) Now that we have successfully opened 68 stores in Canada we need to drive trips and conversion in trips and conversion in frequency categories like healthcare, food and other basic commodities. Sales in these categories have grown much more slowly than we expected causing overall sales and profit momentum to build more slowly as well.

6) In Canada, we know that we have an opportunity to break those shopping habits and we have got to focus on driving need-based trips. So, there in particular, we will sharpen up our pricing and make sure that we are taking a more of a market leader position.

7) We are analyzing results in our first 70 Target stores to understand where in the stores we have the ability to reduce space even more allowing us to further shrink the size of this store format.

8) Our partners at Facebook have told us that engagement statistics for Cartwheel (mobile coupon platform) are among the best they have seen in the beta stage of any app both within and outside the retail space.

Kathy Tesija (EVP Merchandising)

9) Cartwheel is growing rapidly; it currently has more than a million users who have saved more than $2 million so far.

10) Based on successful results from our team member test of buy online and pickup and in-store, we’re moving quickly to begin offering this option for guests in this third quarter.

Read the full Target transcript


“Is Kroger’s Dillon the next Sam Walton?” by Steve Watkins at Cincy Business Courier.  “Veteran tech writer Dana Blankenhorn, in commentary he posted as a contributor to’s site, compared Kroger CEO Dillon with Walton, who opened the first Wal-Mart store in 1962.  Blankenhorn notes that Kroger’s stock, up nearly 50 percent this year, has far outpaced Wal-Mart’s gain of about 10 percent. Other big retailers have gained less than 20 percent.  He also pointed out that Dillon is a fourth-generation grocer and comes from a long line of successful operators of the Dillon supermarket chain in Kansas and across the Plains states and the West.” Read more


“Disappointing Canada sales drag down Target second quarter earnings” by Thomas Lee at Star Tribune.  “Initial euphoria over Target Corporation’s expansion into Canada has given way to disappointing sales and prompted the retailer Tuesday to lower its profit forecast for the year.  With U.S. stores producing tepid growth, Target has embarked on the most ambitious expansion in its 50-year history — opening more than 120 stores in Canada by early next year. But as it announced quarterly earnings Tuesday, the Minneapolis-based retailer said its Canadian locations — more than 50 open so far — are struggling to sell seasonal goods and non-discretionary items like food and health care products.”  Read more


“Wal-Mart, Toys R Us Among First Retailers to Unveil Holiday Promotions” by Jennifer Booton at Fox Business.  “Wal-Mart announced changes to its three-month holiday layaway promotion that include a scrapped opening fee, compared with $5 last year, the return of the cancellation fee from zero in 2012, and new start and end dates: Sept. 13 through Dec. 13…The company is even getting tech-savvy this year, allowing its Facebook “fans” to get a two-day head start with access to layaway beginning on Sept. 11.”  Read more


“Whole Foods’ Battle for the Organic Shopper” by Julie Jargon at WSJ.  “The upscale grocer, known for its pricey organic products, is increasingly emulating the discount tactics used by traditional supermarkets…”The recession was a wake-up call for us,” said co-Chief Executive Walter Robb in an interview.  One of the chain’s latest initiatives: nationwide “flash” sales on specific items promoted on Twitter and Facebook FB -0.23% that run for just a few hours, like a five-hour buy-one-get-one-free deal on ice cream last month.” Read more


“Walmart to Host U.S. Manufacturing Summit Today”  See the Attendee List


“Google Patents ‘Pay-Per-Gaze’ Eye Tracking” at Retail & Loyalty.  “Google could be betting that advertisers will pay to know whether consumers are actually looking at their billboards, magazine spreads, and online ads. The company was just granted a patent for “pay-per-gaze” advertising…The idea is to measure how long a person looks at an ad, as well as their emotional response as indicated by pupil dilation.”  Read more


“Tepid sales, bigger discounts hurt Sears” results by Dhanya Skariachan at Reuters.  “Sales fell 6.3 percent to $8.9 billion, falling short of the analysts’ average estimate of $9.5 billion, according to Thomson Reuters I/B/E/S.  Sales at stores open at least a year fell 2.1 percent at Kmart, 0.8 percent at Sears Domestic and 2.5 percent at Sears Canada. Online sales rose 20 percent at the company, which has invested heavily in its e-commerce business.”  Read more


“Sears Canada revenue falls yet again” at Reuters.  “Department store chain Sears Canada Inc’s revenue declined for the 18th quarter in a row as the company struggles with weak demand and increasing competition from U.S. retailers.  Sears Canada, to compete with companies such as Target Corp and Wal-Mart Stores Inc announced a three-year plan in 2012 that included making radical changes to its pricing strategies and sprucing up stores.  “This period marks the half-way point of our three-year transformation plan, and although we have much work to do, we are starting to see progress …” Chief Executive Calvin McDonald said in a statement.” Read more


“Staples Plunges Most Since 2011 on Profit Forecast Cut” by Matt Townsend at Businessweek.  “Net income in the second quarter fell 15 percent to $102.5 million, or 16 cents a share, from $120.4 million, or 18 cents, a year earlier, Staples said. Analysts projected 18 cents, on average.”  Read more


“Walmart Chairman Targeted for $16 Mil Car Hobby” by Tess De La Mare.  “S. Robson Walton, 68, was targeted while taking part in a racing event in California with his collection of luxury cars, including a Maserati and a Ferrari, valued at an estimated $16 million.Two separate protests were staged – one in front of the Mazda Raceway Laguna Seca and the other at a nearby Walmart store.” Read more


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Wednesday’s Eye-on-Retail Tipsheet: Lowe’s Comps Up 9.6% | Whole Foods New Name | Orchard CEO Out


“Lowe’s Comp Sales Climb 9.6%” at Seeking Alpha.  ” Lowes today reported net earnings of $941 million for the quarter ended August 2, 2013, a 26.0 percent increase over the same period a year ago…Sales for the quarter increased 10.3 percent to $15.7 billion from $14.2 billion in the second quarter of 2012, and comparable sales for the quarter increased 9.6 percent. For the six month period, sales were $28.8 billion, a 5.1 percent increase over the same period a year ago, and comparable sales increased 4.6 percent.” Read more


“Like Home Depot, Lowe’s results benefit from housing rebound” at Reuters.  “No. 2 home improvement chain Lowe’s Cos Inc reported a rise in quarterly profit and sales on Wednesday as U.S. homeowners encouraged by the housing market recovery spent more on their homes.  Net earnings rose to $941 million, or 88 cents a share, in the second quarter ended August 2 from $747 million, or 64 cents a share, a year earlier.”  Read more


“Target Releases Q2 Earnings this Morning at 9:30 am CST”  Listen to the Webcast


“Highlights from Yesterday’s Home Depot’s Q2 Earnings Call”

Frank Blake:

We grew sales by almost $2 billion in the quarter, posted the first double-digit positive comp in our business since 1999, and had the highest quarterly transaction count in the company’s history.

All of our top-40 markets posted positive comps and 98% of all of our markets were positive.

Every one of our merchandising departments exceeded plan for the quarter.

In the first quarter, our pro customer growth outpaced our consumer growth.  For the second quarter, the growth rates were comparable. This reflects less of slowdown in pro than a pickup in our consumer sales.

On interconnected retail, we are at the point where almost one out of every three online orders are completed in the store either through Buy Online Pickup in Store, or buy online ship to store.

Of course customers have the opportunity to buy additional items when they come into our store and return or pickup a product as today one out of five customers do.

Craig Menear:

The departments that had double-digit positive comps were kitchens, indoor garden, lumber, outdoor garden, lighting, tools, electrical and flooring.

Transactions for tickets under $50, representing approximately 20% of U.S. sales, were up 3.8% for the second quarter, principally due to our garden business. Transactions for tickets over $900 also representing approximately 20% of our U.S. sales were up 15.5%.

We were able to recover all the lost sales we projected from exterior project categories in the first quarter and then some. In indoor and outdoor garden, our second quarter success resulted in positive comps in both departments for the first half of the year.

Brand call outs:  Behr Premium DeckOver coatings, Cree LED floodlight, DAP Smartbond adhesive foam gel, Husky steel cabinets.

Q & A:  We have had some really nice innovation and things like LED, which carry a higher ticket, certainly within the light bulb category we are seeing customer step-up, the [bear premium deck over] is a great product, so we are seeing customers willing to spend really in every segment of the category within a category whether that’d be opening price point, mid or high.

Q & A:  At the end of the last year, we had rolled out about 120 stores with an extended appliance program. We added brands in the fall season. We added Samsung around the December time frame which got us to the full offering of brands that we have right now. We are in the process right now of expanding another 120 stores.

Carol Tome:

During the second quarter, we opened one new store in Puerto Rico for an ending store count of 2,258. At the end of the second quarter, selling square footage was 235 million and total sales per square foot were $383.

Read the Full Transcript from Seeking Alpha


“Cautious consumers, wet weather cloud Dick’s Sporting outlook” by Chris Peters at Reuters.  “Adjusted for an extra week in 2012, the company’s same-store sales fell 0.4 percent, missing its forecast of a 2 to 3 percent rise.  Same-store sales at Dick’s Sporting Goods stores rose 0.1 percent while those at Golf Galaxy shops fell 6.1 percent. As of August 3, the Company operated 527 Dick’S Sporting Goods stores and 81 Golf Galaxy stores.”  Read more


“Lowe’s Names New President of Orchard Supply:  Current CEO Departs” at Yahoo Finance.  “Lowe’s said Orchard will operate as a separate, standalone business, retaining its brand and its San Jose headquarters.  Lowe’s also announced that upon closing, Richard D. Maltsbarger, Lowe’s executive who led the team to acquire Orchard, will become President of Orchard. Orchard’s current President and CEO Mark Baker has informed Lowe’s of his decision to accept a position as President and CEO of the Aircraft Owners and Pilots Association following the closing.”  Read more


“Whole Foods Market to call its Wichita store ‘Bread and Circus’ “ by John Stearns at Wichita Business Journal.  “The name is a tribute to what was once the largest natural foods retailer in the northeast prior to its acquisition by Whole Foods Market in 1992, the release says.  Whole Foods opted for a different name for its Wichita store to avoid conflicting with the local Whole Foods Association, which operates three health food stores in Wichita under the name Whole Foods.”  Read more


“Coming to a store near you: Cutting-edge technology” by Courney Reagan at CNBC.  “Not all retail technology works well. QR, or Quick Response, codes, haven’t taken off the way many had hoped they would. The two-dimensional bar codes, available on many products and ads, are meant for consumers to scan with smartphones to gather more information. “The more hoops you make a customer or user go through, the less likely they are going to use it.”  QR codes probably will be replaced by technologies with fewer steps, he said.” Read more


“Mark Zuckerberg Announces Ambitious ‘Rough Plan’ To Get 5 Billion More People Onto The Internet” by Joe Weisenthal at Business Insider.  “CEO Mark Zuckerberg has put forth what he calls a “rough plan” to bring the internet to the next 5 billion people (there are currently 2.7 billion people online, or roughly a third of the world’s population).  The announcement has a slightly hyperloopy feel to it, as it’s a little bit unclear on how the plan would be executed.”  See the Plan


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