Karen Jacobs

Check out the benefit of lower fuel prices on consumer spending.

Wal-Mart Stores continues to stand out as consumers go for bargains in the recession. The top retailer led other chains with a better-than-expected 5.1 percent rise in sales at stores open at least a year in February, and announced it was boosting its dividend.

Relief from high gasoline prices is giving consumers more money to spend on discretionary items, Wal-Mart said.

Other retailers weren't so lucky, with apparel and department store chains posting some of the biggest sales drops for February. While lower gas prices appear to be giving lower-end consumers a break, weak financial markets are still leading wealthier shoppers to pull back, hurting Saks and Nordstrom.

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Mortgage delinquencies still rising

Blockbuster same-store sales up

Gymboree has bleak outlook

(Photo: Reuters)

Check out mixed news from discount retailers.

Warehouse clubs turned in a diverging earnings performance on Wednesday but overall results still showed the strength of this business model as consumers search for bargains.

No. 1 U.S. warehouse club operator Costco Wholesale reported a lower profit as non-food sales weakened, but smaller rival BJ's Wholesale eked out an earnings gain.

As both retailers look to preserve and grow their business, that could bode even better for cost-conscious customers.

Costco has said it will cut prices to keep shoppers, while BJ's said one of its top priorities this year is to gain market share.

Close-out chain Big Lots also posted profit that topped Wall Street forecasts - and investors eagerly snapped up its shares.

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More mortgage borrowers are 'underwater'

Kindle access from iPhone

(Photo: Reuters)

Check out more grim news on the jobs front, from the food sector.

Pilgrim's Pride became the latest consumer-related company to cut jobs when it said on Friday that it plans to idle three U.S. plants because of an oversupply of chicken and weak consumer demand. The plants, in Georgia, Louisiana and Arkansas, employ about 3,000 people, or about 7 percent of the company's U.S. workers.

The chicken producer, which is fighting to emerge from Chapter 11 bankruptcy protection, said the closings were needed to reduce production of low-value meat that is draining its finances. 

But it's not just chicken producers feeling the crunch of the recession. 

Reuters reporter Bob Burgdorfer wrote this week that Americans are eating more hamburgers and fewer steaks as the economy wallows in recession -- leading to huge losses at U.S. feedyards that fatten the cattle for steaks.

The U.S. Agriculture Department has said that prices for cattle, hogs and turkeys will stay weak for much of this year because of oversupply even as the nation's meat production declines.

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Consumer confidence still low

Sony chief to oversee electronics unit

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(Photo: Reuters)

The recession is leading many consumers to sharpen their do-it-yourself skills, opting to work on their cars and homes themselves rather than hire professionals.

Home Depot said it is gearing up for spring with a wide assortment of lawn equipment and fertilizer products, looking to cash in should consumers cancel their contracts with professional landscaping companies.

The company said some consumers in cold-weather climates bought snowblowers in the fourth quarter, opting to clean their own driveways and save money instead of calling on snow-removal services.

"We wonder if that might not happen in the spring in the garden business," Chief Financial Officer Carol Tome said in an interview. "If that were to happen, we'll be ready with a broad assortment."

Home Depot, which posted better than expected results for the fourth quarter adjusted for charges on Tuesday, gave insights on how its consumers are spending. During the fourth quarter, it said purchases of $500 or more fell in double-digit percentages. But average purchases of less than $20 fell only about 3 percent, suggesting consumers are still spending on basic home repairs.

"Consumers in general are being pretty careful," Tome said. "We've seen savings rates increasing so that will impact consumer spending, too."

While the rate of sales declines in hard-hit housing markets such as California and Florida has eased, Home Depot is not yet ready to say weakness in those states has hit bottom. Now, malaise has spread to areas that used to be more solid. For example, sales in the Ohio Valley and Pacific Northwest have softened considerably, Tome said.

One area where sales are rising is the U.S. Gulf Coast, where residents continue to rebuild after devastating hurricanes.

Home Depot also noted strong sales in vinyl flooring, roll carpet and cleaning, types of products that tend to go in homes that are being rented.

(Photo: Reuters)

Check Out mixed news on the retail sales front.

Retailers are now out to lure consumers with after-Christmas deals as data show this year's holiday season was one of the weakest in decades.

The retail data service of MasterCard Advisors said U.S. retail sales fell as much as 4 percent during the holiday season. SpendingPulse tracks sales activity in the MasterCard payments network and couples that with estimates for other payment forms.

It found that luxury sector sales fell 34.5 percent, as job losses and stock market declines weighed on higher-end shoppers. Specialty electronics and appliance sales were off 26.7 percent.

But the news wasn't all bad. Online retailer Amazon.com said this year's holiday sales season was its best yet, with more than 6.3 million items ordered on its site on the peak shopping day of Dec. 15. Online sales were likely aided by winter weather in some parts of the United States.

Retail shares even turned higher on Friday -- perhaps investors are more confident that it can't get much worse?

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British shoppers hunt for post-Christmas deals

(Photo: Reuters)

Check Out unemployment's strain on consumers' wallets.

This is not what retailers want to hear on the day before Christmas, but evidence continues to mount that consumers are cutting back spending.

The U.S. Commerce Department said consumer spending contracted 0.6 percent in November, the fifth-straight monthly fall. Incomes shrank 0.2 percent. A separate report showed initial claims for jobless benefits last week reached the highest level in 26 years.

Today, retailers are making a final push to lure last-minute gift hunters but surveys indicate the steep discounts are not inspiring consumers to spend. This year's U.S. holiday shopping season could be the worst in up to 40 years.

Are you spending more or less this holiday season? Let us know.

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'Heritage cocktails' make a comeback

Cadbury sells drinks unit

More U.S. store closings to come

(Photo: Reuters)

The recession, corporate cutbacks and lower demand for big-ticket items are not stopping LG Electronics from expanding its U.S. appliance business.

The South Korean electronics giant this week unveiled a facility in Atlanta that will be used to train engineers, contractors and sales staff how to use its commercial air conditioning products.

LG, which has been gaining U.S. appliance market share as residential customers buy its washing machines, hopes the Atlanta facility, its first commercial training center in the U.S., will help boost sales of heating and air conditioning systems to hotels, hospitals and schools.

LG is the world's biggest maker of air conditioners.

"Consumers are looking for value," Michael Ahn, chief executive of LG Electronics North America, said in a short interview at the training center.

"We're seeing more (appliance) growth at the lower end than the high end" right now, Ahn added. "Total demand will be decreased next year."

To respond to the need for value, Ahn said LG was offering lower-priced versions of its Tromm washing machine (pictured), with a washer-dryer pair priced as low as $1,200. LG has been selling major appliances in the U.S. for about six years, and caters to the premium market.

The U.S. housing slump and tighter credit has hurt appliance demand. U.S. shipments of major appliances were down about 9 percent for the year to date through late October, according to the Association of Home Appliance Manufacturers.

(Photo: LG Electronics)

Circuit City's competitors are trying to capitalize on the retailer's store closures by wooing its customers.

Regional chain hhgregg is accepting Circuit City gift cards for purchases of electronics, appliances and mattresses at its stores. The Circuit City gift card value, when verified, will be good toward up to 20 percent of the hhgregg purchase price.

Hhgregg launched the promotion before the Thanksgiving Day holiday but said on Tuesday that it was being extended through Super Bowl Sunday weekend, which ends Feb. 1.

"We are continuing this promotion as a way to demonstrate hhgregg's superior customer service and to assist those who may be impacted by other retailer's store closures," hhgregg marketing Vice President Jeff Pearson said in a statement.

Meanwhile, RadioShack has broadcast radio ads in Atlanta, a market where Circuit City is closing most stores, urging shoppers to come to its outlets to buy digital cameras, mobile phones and GPS systems.

"Times are tough so this holiday season, put your trust in a store that you know will be around," the speaker on the RadioShack ad says.

Circuit City filed for bankruptcy protection last month and is hoping to emerge from Chapter 11 in the first half of 2009. The retailer is holding liquidation sales at 155 of its about 720 U.S. stores in big cities such as Phoenix and Atlanta.

A RadioShack spokeswoman declined to comment on the company's radio ads. A Circuit City spokesman declined to comment on the actions by rivals.

(Photos\Circuit City, hhgregg)

The beaten-down appliance sector got a shot in the arm on Black Friday as many consumers bought new washers for their laundry rooms, one spot survey shows.

Appliance sales, especially of washing machines and dryers, were up significantly over Thanksgiving weekend as shoppers responded to discounts, said David MacGregor, an analyst with Longbow Research.

More consumers are also buying extended warranties for these big-ticket items, he added.

MacGregor, who conducts regular surveys of appliance sellers, said 87 percent of retailer contacts indicated sales met or exceeded expectations, in some cases doubling forecasts for the weekend.

Sears, the biggest U.S. appliance retailer, benefited strongly as promotions and doorbuster offers drove Black Friday traffic. The retailer's Black Friday deals included a Kenmore washer-dryer pair priced at $599 that normally sells for $1,199, a spokesman told Reuters.

"Based on our estimates of costs, we believe that Sears probably sold most of these heavily discounted items at or below cost and then tried to recover some margin through sales of extended warranties," MacGregor said in a research note.

The continuing U.S. housing slump and tighter credit has hurt appliance demand. U.S. shipments of major appliances were down about 9 percent for the year to date through late October, according to the Association of Home Appliance Manufacturers.

The analyst said he expects the Black Friday strength to aid Whirlpool, whose brands hold leading market share positions in most categories. Whirlpool's shares, which have fallen 50 percent this year, were up 8 percent on Thursday.

Photo: Whirlpool

If you want to know who was the real retail winner amid all the Black Friday frenzy, just look in the mirror.

That's the word from Jim Barry, a former editor of Video magazine, who is now a spokesman for the Consumer Electronics Association.

Barry said consumers found "really unbelievable" prices the day after Thanksgiving on some electronics items, such as 42-inch flat-panel TVs selling for $600 to $800.

But "for retailers and manufacturers, the question is was there any profit in any of this stuff?" he added.

Here's more from a chat with him:

Q: Will electronics prices return to normal after Black Friday?

A: "You're still going to find deals, especially on flat-panel TVs for which there seems to be an oversupply right now. There's also this situation of a couple of companies (closing stores) ... Some of that product may be at liquidators. Flat-panel TVs have been coming down in price, not withstanding Black Friday and will continue to come down. I would expect prices to continue to be terrific for consumers."

Q: Will the February 2009 shift to digital signals spur holiday flat-panel TV sales?

A: "The transition has more people thinking about their TV ... So in that sense, it can't help but help (flat-panel sales). But I wouldn't call it a major factor."

Q: Where are people buying electronics?

A: "Everywhere. The specialty stores like Best Buy, there are other specialty stores like J&R in New York, regional stores. Then there's Wal-Mart. Then people are buying online. Personally I don't think Cyber Monday is as big a deal as it was a few years back partly because more people have high-speed Internet at home now."

Q: Will rival store closures benefit Best Buy?

A: "It's not necessarily great for Best Buy because you've got liquidators selling product. The only clear winner now is the consumer, who's getting great deals."

(Photo\Reuters)