Eye-on-Retail Tipsheet 12/3/12: Walmart alleged patent infringement, Web “up & down” pricing, Walgreens opens store #8K



“Retail Frenzy: Prices on the Web Change Hourly” by Stephanie Clifford in The New York Times.  “Ms. Schulz said sophisticated retailers set algorithms to change prices in response to competitors. “Retailers pipe a bunch of information in electronically, like internal information — cost, availability of inventory, sales goals,” along with competitors’ prices, she said.  The software also lets retailers establish rules on the pricing of certain products: always price Furbys 5 percent below Kmart, for example, or make sure some goods are priced at an average of Amazon’s and Walmart’s prices. Generally, pricing managers also manually adjust prices.”  https://www.nytimes.com/2012/12/01/business/online-retailers-rush-to-adjust-prices-in-real-time.html?_r=0 


“Home Depot turns to cat to build a brand” by Arielle Kass in the The Atlanta-Journal Constitution.  “We need to inject a little humor into the brand in the social space,” said Trish Mueller, Home Depot’s senior vice president and chief marketing officer. “There’s a lot of engagement with cats.”  If Richard is successful this holiday season, he’ll likely return for the spring, Home Depot’s busiest time of year, Mueller said.”  https://www.ajc.com/news/business/home-depot-turns-to-cat-to-build-a-brand/nTKWG/


Frank Blake, Home Depot CEO and Chairman, Arrives at White House for Meeting with Obama (Pictures).  https://www.zimbio.com/pictures/oH8cIRCqO6m/Business+Leaders+Meet+President+Obama+White/EbhSkrMLGnG/Frank+Blake


“Google Takes on Amazon, Buys Parcel Pickup Company” by Chris Taylor at Mashable (Video and Text).  “Indeed, BufferBox has one major advantage over its Amazon counterpart — you can pick up any package in its lockers, including UPS and Fedex. Part of the YCombinator startup class of 2012, the company is currently running a trial service in Canada.”  https://mashable.com/2012/11/30/google-buys-bufferbox/


“Wal-Mart’s Neighborhood Markets Pose Threat to Dollar Stores” by Ronald Thomas in Minyanville.  “As a retailing analyst, I know that consumers have historically reacted to pricing differentials above 5% when choosing among the same sorts of stores. As the differential approaches around 8% however, it can cause some really important market share shifts. Indeed, we have seen Kroger gain significant market share from other chains such as Safeway and Supervalu, with prices that I believe have averaged about 6-8% below traditional chains. As an aside, it seems very possible that Supervalu may see bankruptcy based on its years of being priced about 8% above most of its competition.”  https://www.minyanville.com/sectors/consumer/articles/wmt-walmart-Walmart-Express-dollar-stores/11/30/2012/id/46223


“Supervalu’s Fundamentals Continue to Deteriorate” by Michael Keara at Morningstar.  “Same-store sales and profit margins at Supervalu’s core supermarkets are in a free-fall and are also declining at the company’s hard-discount Save-A-Lot format. We don’t see fundamentals improving at either segment anytime soon, given that Wal-Mart is accelerating the rollout of its small-format Neighborhood Market stores, a major competitive threat to both segments. Moreover, Target now sells groceries at nearly all of its units, and all the dollar stores we cover are expanding square footage roughly around 7%, while increasingly using food as a loss-leader category to drive customer traffic.”  https://news.morningstar.com/articlenet/article.aspx?id=576253


Score one for the little guy…..“Family Business Took on Walmart Over Alleged Patent Infringement”  by Patrick Healy at News4 Southern California (Video).  The Rosenes and Bartoli acknowledge they had previously approached Walmart about bundling a Solar Sun Ring with a small children’s play pool, but no agreement was reached.  Walmart expressed interest in selling the Ring as a stand-alone product, according to the family. But they said they declined out of concern that would gut sales through their original retail network of small pool supply stores.  The family contends that is in fact what happened when the Solar Pad came on the market.”  https://www.nbclosangeles.com/news/local/Family-Business-Took-on-Walmart-Over-Alleged-Patent-Infringement-181701451.html


“Sears CEO checking on retailer’s comeback (in Canada)” by Murray McNeil in Winnipeg Free Press.  “The retail landscape is about to become even more competitive when Walmart’s biggest competitor south of the border, Target Corp., begins opening its new Canadian stores in March and April next year.  McDonald acknowledged Target’s arrival is going to turn up the heat on Sears. But he insisted the changes now underway would have happened even if Target wasn’t entering the picture.  He said the changes are already having a positive impact on the company’s bottom line. Although it’s still bleeding red, it was able to cut its net loss in half in the third quarter this year.  https://www.winnipegfreepress.com/business/sears-ceo-checking-on-retailers-comeback-181652701.html


“PetSmart: A Stealth Housing Stock?” by Justin Menza at CNBC.  “”There’s a high correlation to housing and pet acquisition,” PetSmart CEO Robert Moran told CNBC this week. In addition to spending more money at Lowe’s and Home Depot , people tend to get a cat or dog after buying a new home.  “Right now about 62 percent of households, which equates to 73 million households, have pets. We believe we’re incredibly well positioned if there’s any type of housing recovery to take advantage of this.”  https://pub.cnbc.com/id/50012993


Walgreen’s Opens Store Number 8,000.  “We are thrilled to locate our milestone 8,000th store and latest flagship store at such a famous intersection as we bring a format unlike any traditional drugstore to the Hollywood community,” said Joe Magnacca, Walgreens president of daily living products and solutions. “Walgreens aims to be America’s first choice for health and daily living, and we look forward to providing an exceptional experience for our customers as we help them get, stay and live well.”  https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121130005231&div=-1245645151