“Wal-Mart realigns small-store format management, adjusting ‘on the fly’” by Kim Souza at The City Wire. “(Mike Moore) said the team is lean with five senior vice presidents that report to him with specific duties. The team, which had its first meeting this week, are: Larry Mahoney – logistics; Marc Lieberman – vice president of small formats; Brian Hooper – real estate; David Norman – operations over the West; and Glenda Fleming – operations over the East…Moore said this week he received at least 24 requests from suppliers for meetings about Wal-Mart’s small formats. He assured the crowd it’s not that different but there is a small team of veteran managers looking out for Neighborhood Markets that in that past hierarchy system sometimes got overshadowed or overlooked because the supercenters make the most money.” Read more
“Target’s new CEO makes Canadian turnaround his priority” by Marina Strauss at Globe & Mail. “Brian Cornell said in an interview on Wednesday he will travel to Canada from Target’s head office in Minneapolis on a “regular” basis to oversee the turnaround efforts. He has “put on pause” the company’s earlier plan to appoint a non-executive chairperson with domestic experience to oversee the troubled Canadian operations.” Read more
“Target Corp CEO says every Canadian store ‘has to improve’ as bare shelves continue to plague retailer” by Hollie Shaw at Financial Post. “Inventory lapses were evident in a mid-town Toronto Target store on Wednesday. While some racks were fully stocked with neatly folded clothing, there were gaping shelf holes in the home storage, décor and shoe departments.” Read more / See the pics
“How the Weather Channel Persuaded Walmart to Hand Over Their Sales Data” by Clair Suddath at Bloomberg. “The company persuaded advertisers such as Wal-Mart Stores to hand over their sales data for every product they sold, in every store, in every aisle, all over the country. “I mean that literally,” says Vikram Somaya, general manager of WeatherFX. “We said, ‘Give us your data.’ Traditionally, that’s not been met with a whole lot of resounding cheer, right?” But the stores did it.” Read more
“Target’s Bill Ramsey downplays the potential of Apple Pay” by Abby Callard at Internet Retailer. “For consumers, the payment experience can be fraught with emotion, he said: “Emotions create less than logical behavior.” Anxiety is one emotion the Target team talks about a lot, he said. Consumers work hard for their money and deciding what to spend it on and how much to spend can bring up anxiety. If all the new technology does is mimic a current payment method—such as using a cell phone app that keeps a credit and debit card on file—it’s not really an improvement, Ramsey said.” Read more
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“Sam’s Club’s Racquel Harris & Walmart’s Sharon Orlopp Discuss Leadership” by Jamie Smith at The City Wire. “Harris worked at Kraft Foods before her role at Sam’s Club where she had the opportunity to learn from other female leaders about how to break down barriers and demonstrate empathy. For Orlopp, the answer was the “power of storytelling” and the ability to connect to people at all levels.” Read more
“Aldi unveils $700m assault on Western Australia and South Australia” by Sue Mitchell at Sydney Morning Herald. “Retailer Aldi has outlined plans to invest another $700 million building two distribution centres and as many as 130 stores in Western Australia and South Australia.” Read more
“J.C.Penney Turnaround Plan Fails to Excite” by Maria Halkias at Dallas News. “Investor confidence in J.C. Penney’s turnaround slumped Wednesday as the retailer put the kibosh on the idea that store closings are necessary…Penney’s stock fell $1, or 11 percent, to close at $8.19.” Read more
“Help wanted – Publix is looking for a crisis PR agency — just in case it gets hacked” by Sarah Halzack at The Washington Post. “The company is seeking a consultant who could potentially help with all forms of communications about a breach, including communication with customers, employees, credit card companies and banks. Brous said Publix is being proactive about lining up these services because “it takes time to build a relationship with a PR firm.” By preemptively refining a plan of action, Publix hopes to be better equipped to weather a breach if one occurs.” Read more
Happening Today: Q4 2014 Family Dollar Earnings Conference Call @ 5:00 PM EST Webcast
Supreme Court: “Arguments Go Poorly For Amazon Workers Seeking Pay For Search Time” by Daniel Fisher at Forbes. “I’m in the situation probably I’d say go with the Labor Department,” Breyer said. “They are the ones who are in charge of this. And they are saying you lose.” Read more
“Wind Could be the End of Delivery Drones” by Lauren Walker at Newsweek. “Drones have become synonymous with modern life…But as their use in delivery services verges on becoming a reality, drones are running into a big problem: wind…Of the 10 missions to Juist so far, two were postponed. What can this 20 percent cancellation rate due to wind mean for widespread use of delivery drones?” Read more
“8 Apps That Save You Money On Your Groceries (No Savings Catcher?)” by Sarah Perez at Techcrunch. See the list
“Patient criminal hides on Family Dollar shelf for nearly two hours” by Drew Karedes at KHOU 11 – Houston. “I’d say that was a pretty big sacrifice on his part,” said Sgt. Haney. After the employees left the store around 11 p.m. on Tuesday night, the man on the shelf made his move. Police say he probably wasn’t expecting that the security alarm would immediately go off. It was activated by a motion sensor. The criminal is seen on video exiting out the back door empty handed.” See the video / Read more
Heard on the Costco Q4 Earnings Call
(E-com sales $3 Bil, Living Social promotion, 35 new stores/year, Relo NJ store in 2 weeks…)
Richard Galanti – CFO
For all of fiscal ‘14 we opened 30 new locations, 17 new in the U.S., three each in Canada, Australia, two each in Japan and Korea, and one each in the U.K., Mexico and Spain, that being our first unit opening in Spain.
We ended fiscal ‘14 with 663 locations operating worldwide.
For the current fiscal year fiscal ’15, our plans are to open 31 new warehouses and also relocate four existing locations, 19 of the planned 31 new locations will be in the United States, with remaining in international markets.
During the first four months of fiscal 2015 basically September through this coming calendar year-end, we planned to open eight of our fiscal ‘15 locations, six in the U.S. and one each in Australia and Mexico, as well we will complete one warehouse relo in Wayne, New Jersey. This will occur in two weeks from tomorrow on the 23rd.
Most U.S. regions were in the 4% to 5% comp sales range with Midwest and Southeast being even stronger.
Both food and sundries and hardlines comps were both in the mid-single digits range.
Both softlines and fresh foods comps were in the high-single digits range for the fourth quarter.
Japan and Australia being impacted by cannibalization were the weakest performers, while Canada and Taiwan were the strongest in terms of comp sales increases.
In terms of membership, we continue to enjoy strong renewal rates…91% in the U.S. and Canada, and little over 87% worldwide.
In early September…for eight days, we ran a nationwide membership promotion for new members on Living Social with the purchase of a full price $55 membership. The new member received a $20 Costco Cash card, coupons for three free items.
In terms of Costco online, we’re currently operated in four countries, U.S., Canada, U.K. and Mexico. We’d expect to be in at least one, probably two additional countries by the end of calendar ‘15…This one worked well and we’ll keep you posted.
For the fiscal year, total e-commerce sales came in just under $3 billion.
Sales in e-commerce were up in the high teens for both the fourth quarter and the fiscal year and comp sales in e-commerce were up in the 18% to 19% range for both the fourth quarter and the fiscal year.
Cabo San Lucas Mexico: We plan to be back up and operating by early November.
Midwest: Certainly it’s a newer region relatively speaking. We are getting — we seem to have I think hitting our sweet spots in some of those cities.
On opening a store in France: If I was a betting person, absolutely in the few years but not in the next year, year and half.
On long term store goals: I think we like to get up to 35 a year in the next five years, maybe a little more.
In the greater LA where we’ve got 40 or 50 units, many, many units, we feel that over the next 10 years we could open another 10 or 15, but they are all very pinpointed locations based on where other locations, other Costco locations are.
The list of price increases is not a big list around here.
(E-commerce is) 3% piece of our business. The good news, it’s growing and it is more profitable. E-commerce is definitely quite a bit more profitable than the rest of the company.
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