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Sep 25, 2009
via Shop Talk

Check Out Line: Walmart Canada in holiday price cut mode

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Check out toy prices falling north of the border.Walmart Canada said it is dropping the price of some popular toys to $10 (Canadian dollars that is) — a price cut of up to 67 percent in some cases – and new toys will be reduced to $10 every week between now and Christmas.For instance, it said Transformers Universe, which is regularly priced at $29.92, is being cut to $10, as is Mega Bloks’ Builder Racer that usually sells for $24.96.The move echoes price cuts announced by Walmart U.S. on Oct. 1 last year, when it slashed prices on popular toys — like Barbie dolls and Tonka trunks — to $10 each.”We are starting our Christmas toy price cuts earlier than ever, across more toys than ever before,” said Jim Thompson, Walmart Canada’s senior-vice president of merchandise and operations.He cited research that was conducted for the retailer showing many Canadians plan to buy items on sale to help them stay on budget this holiday shopping season, and many will spread the expense of their holiday shopping over a longer period of time to avoid large post-Christmas bills.It can now only be a matter of time before Walmart U.S. rolls out its holiday toy plans.Also in the basket:Unilever pays 1.3 bln euros for Sara Lee brandsWalmart.com bullish on growth of MarketplaceFinish Line discontinued Man Alive leads to Q2 lossBeauty retailers hope for flat holiday sales (WWD, subscription required)(Photo: Reuters)

Sep 17, 2009
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Check Out Line: Train wreck Christmas?

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Check out a rather glum outlook for the Christmas shopping season.Last year, holiday sales notched their worst performance in nearly four decades.This year, they could be a “train wreck” says Britt Beemer, founder and CEO of America’s Research Group.According to the latest Consumer Mind Reader survey released by America’s Research Group and UBS, 81 percent of respondents said they are pressured by family debts, forcing many to shop less and spend less.  “The data foretells a very scary Christmas shopping season with consumers radically cutting back at a time when retailers need shoppers to shore up sagging retail sales,” Beemer said. “I am fearful Christmas will be a retail train-wreck this year.”Earlier this week, Beemer told Reuters that U.S. consumers are still cautious about eating at restaurants and are not planning to loosen the purse strings for holiday spending this year despite signs the economy is improving.”Everybody wants the recession to be over, but nobody has told the consumer,” Beemer told Reuters.According to the survey released on Thursday, more than three quarters of families are trying to cut back on how much they are spending.  The average amount that American consumers are cutting out of their monthly spending is $191.11, the highest figure ever recorded for spending cuts in 13 years of ARG Consumer Mind Reader surveys.Of consumers cutting back, 60.1 percent said they have accepted this new, lower spending level — even when the economic situation improves and they could afford to spend more. Also in the basket:New normal? U.S. consumers coming back cautiouslyPier 1 posts smaller-than-expected loss on cost cutsDan Brown novel breaks one-day sales recordsGowns go with the flow on New York fashion runwaysFashion Houses Forced to Test Radical Ideas (WSJ)(Photo: Reuters)

Aug 14, 2009
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Check Out Line: Losses in the retail world

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Check out the quarterly losses reported by J.C. Penney and former teen darling, Abercrombie & Fitch.Penney reported a net loss of $1 million, or nil per share, compared with a year-earlier profit of $117 million, or 52 cents per share. Analysts on average expected a loss of 1 cent per share, according to Reuters Estimates.The loss was bigger over at Abercrombie.The clothing retailer recorded a net loss of $26.7 million, or 30 cents a share, compared with a net profit of $77.8 million, or 87 cents a share, a year earlier.Penney has fashioned itself as a value destination in the downturn, and said on Friday that it sold more merchandise at regular promotional prices and less at clearance prices. Shoes and women’s clothing were the strongest sellers, while children’s apparel sales were weakest.Abercrombie, which has been reluctant have its name associated with value, faced sliding sales, higher markdowns and increased costs in the quarter.As the economic downturn has deepened, teenagers are overlooking its high-priced fashions and turn to rivals with cheaper prices like Aeropostale or Forever 21. Abercrombie has slowly begun to discount or lower the starting ticket prices on some items to address the consumer aversion to high prices in the downturn.The company said it remained on track to open three international flagship stores in fiscal 2009, including two stores in Milan and one outlet in Tokyo.Also in the basket:Dole Foods files for $500 mln IPOSwatch sees H2 recovery after forecast-beating H1Bloomie’s Flagship gets overhaul (WWD, subscription required)Wal-Mart thinks locally to act globally (WSJ, subscription required)(Photos: Reuters)

Aug 7, 2009
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Check Out Line: Target takes control of Target.com

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Check out Target already looking forward to the 2011 holiday season.The discount retailer said it is taking control of Target.com and aiming to launch its new website by the 2011 holiday season.The announcement signals the end of a relationship with online retailer Amazon.com that began in 2001.”We believe it is in Target’s best interest going forward to assume full control over the design and management of Target’s e-commerce technology platform, fulfillment and guest services operations,” Target.com President Steve Eastman said in a statement.Target had previously extended its contract with Amazon to 2011, but the companies will continue to work together during the next two years.Also in the basket:Crocs Q2 beats, sees return to profit in 2010 Blue Nile profit in-line; full-yr view tops, shrs upHhgregg Q1 profit beats Street, reaffirms outlookForget the shuttle, take a Hermes chopper to the airportSupreme Court Justice Thomas and Wife Camp Out at Wal-Mart (Foxnews.com)(Photo: Reuters)

Jul 31, 2009
via Shop Talk

Check Out Line: The extreme weather in July

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Check out the chilly, wet weather continuing into July.Last month, retailers weathered the second-coolest June in 10 years, with record rainfall in cities like New York, Boston and Chicago, according to weather research firm Planalytics.That put a lid on shopper demand for short shorts and tank tops, hurting June sales results.July didn’t necessarily bring enough heat to make up for the June wash out.According to Planalytics, unusually cool temperatures were pervasive across the northern Plains, Midwest, and interior Northeast in July with many locations having monthly readings that made it the coolest ever for July.Here are some extremes the tracking firm noted:Regional Extremes (Temperature):

    The East North Central region had its coolest July ever, shattering the previous record set way back in 1967 (42 years) The West North Central region had its 2nd coolest July ever, lagging only 1992. The Northeast region had its 3rd coolest July ever, lagging only 1962 and 2000.

Regional Extremes (Precipitation):

    Hartford, CT (9.127inches) Wettest July ever recorded, breaking the record set in 1980 Portland, ME (7.98 inches) Wettest July ever recorded, breaking the record set in 1997 Ottawa, ON (9.61 inches) Wettest July ever recorded, shattering the record set in 1972

But Texas might be wondering what all the fuss is about.  Planalytics noted that it was brutally hot across much of the southern Plains and Texas, where daily high temperatures often exceeded 100F.We will see what all the extremes mean for retailers next Thursday, when chains report their July sales results.Also in the basket:Homi Patel Retiring as Hartmarx CEO (WWD, subscription required)Disney profit beats Wall Street, shares slideForeigner signs with Wal-Mart (Los Angeles Times)Ruth’s Hospitality Q2 profit tops StreetSABMiller flat beer volumes see shares dip(Photo: Reuters)

Jul 24, 2009
via Shop Talk

Would this label sway your buying decision?

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This is a picture of a label that might one day adorn the merchandise hanging on a rack at Wal-Mart. The final look and feel of the label could change – maybe it would have a number rating instead of a sliding scale.But Wal-Mart said the idea is to give shoppers a means of calculating the environmental and social cost of making, packing and selling all of the items in its stores.The labels could take a while to develop — maybe five to ten years — so they wouldn’t necessarily be aimed at the shopper in its stores today.But they could be a way for the retailer to win the business of the next generation. High school and college students of today may not yet have much money to spend now. But once they start earning a paycheck, according to Wal-Mart, they intend to spend it at retailers that care about the environment.”This is the No. 1 issue on college campuses today, regardless of what happens with the economy, because they know this is their future,” Chief Merchandising Officer John Fleming said on a webcast when Wal-Mart announced the labels.There is a lot of work that will need to take place before the label can move from an idea to a reality. And what consumers say they intend to do and what they actually choose to do with their dollars can often diverge. But it will be interesting to see, if the labels do come to fruition, how much shoppers will care and whether a higher green rating is enough to convince them to pay what could be a higher price.Wal-Mart says it would like to see other retailers embrace the idea and also use such labels. But if they don’t, will Wal-Mart’s rating system on its merchandise be trusted?(Photo: Copy of a slide included in Wal-Mart’s presentation on developing a sustainability index)

Jul 23, 2009
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Check Out Line: Can a $298 laptop jump-start back-to-school?

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Check out efforts to get serious back-to-school shopping underway.Wal-Mart announced plans to start selling on Sunday a Compaq Presario laptop for $298.Gary Severson, Wal-Mart U.S.’s senior vice president of home entertainment, told Reuters he thought the deal represented a “screaming value.”The retailer also plans to cut the price of an Acer laptop with an 8-hour battery by $50 to $548. The computer has 3 gigabytes of memory, a 320 gigabyte hard drive and qualifies for a free upgrade to the Windows 7 operating system when it is released.Retailers ranging from Wal-Mart, to Target, to J.C. Penney have outlined their plans to lure back-to-school shoppers. Penney is using a special website, jcp.com/teen, to reach web-savvy teenagers who shop for themselves in the back-to-school period but may have less money to do so this year.But retailers are confronting cash strapped shoppers, who are watching their pennies as the unemployment rate rises and the housing market remains depressed.Asked for his view of the back-to-school season, the Chief Executive of UPS, Scott Davis, said on a conference call it was too early to tell.”We’ve not seen a lot of signs yet based on the air freight market and ocean freight market,” he said.But he said Wal-Mart’s plans to increase its selection of laptop computers was a good sign and perhaps the back-to-school season would be better — a hope likely held by the entire retail industry.Also in the basket:Amazon.com buying shoe seller Zappos for $928 millionKimberly-Clark 2nd-quarter profit fallsMcDonald’s quarterly profit fallsSafeway cuts view after tax matter aides profitP.F. Chang’s, Chipotle, Domino’s top Street(Photo\Reuters)

Jul 17, 2009
via Shop Talk

Check Out Line: Cost cuts in toy land

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Check out the quarterly profit from Mattel.The world’s top toymaker posted a higher-than-expected quarterly profit but it wasn’t driven by consumers clamoring for its toys.Instead, it cut costs to make up for a dearth of toys based on summer movies and the impact of foreign exchange.Profit for Mattel, the owner of Hot Wheels and Barbie, rose to $21.5 million, or 6 cents a share, in the second quarter from $11.8 million, or 3 cents a share, a year earlier.But sales fell 19 percent to $898.2 million. The impact of currency exchange rates accounted for 5 percentage points of the decline.Worldwide Barbie sales fell 15 percent, hurt mostly by lower overseas sales.While both Mattel and rival Hasbro are battling lower demand in the recession, Hasbro is ahead in the movie-based segment this year with toys linked to summer films such as “Transformers – Revenge of the Fallen” and “G.I. Joe – The Rise of the Cobra.”To offset slumping sales, Mattel has cut 1,000 jobs, shaved corporate travel expenses and taken steps to trim advertising and distribution costs in past months. In the past quarter, it cut roughly $91 million of costs in areas such as administration and advertising.Also in the basket:CIT woes may disrupt retailers holiday plansStarbucks local cafe pilot has alcohol, live musicAppeals Court Hears Tiffany Appeal of eBay Case (WWD, subscription required)(Photo: Reuters)

Jul 10, 2009
via Shop Talk

Check Out Line: The name brand/store brand switcheroo

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Check out which name brand products Americans have shown a willingness to sacrifice amid the recession.According to research from marketing firm ICOM, consumers have jilted their favorite national food, household, health and personal care brands.But when it comes to giving up their favorite name brand pet or child care products, they are not so willing to be unfaithful.The following list shows the percentage of consumers in various product categories who have switched to store brands and away from national brands in the past six months. The list is based on ICOM’s May survey of 1,530 American consumers:

    59% for food and household products;48% for health products;48% for personal care products;23% for pet care products;12% for child care products.

The survey also found that when it comes to over-the-counter medical items,  there is a link between severity and specificity of ailment and openness to switch. The following data depicts the percentage of consumers in each category who have switched to less expensive store brands and away from national brands in the past six months:

    42.2% for general pain relievers;31.7% for cold and cough medicines;30.8% for allergy remedies;21.5% for heartburn medication

Also in the basket:U.S. consumers’ mood sours in early July: surveyOutlook darkens for U.S. back to school salesScoop NYC Feels Credit Squeeze (WWD, subscription required)Amazon’s Kindle to Sell Law Books (WSJ, subscription required)(Photo/Reuters)

Jun 26, 2009
via Shop Talk

Check Out Line: Consumer spending shows a tiny rise

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Check out a government report showing that U.S. consumer spending rose 0.3 percent in May after an upwardly revised flat reading in April.It was the first gain in spending since February, as government stimulus pushed incomes higher.”Probably the increase in personal income was due to the increasing transfer payments coming from the government right now as you’re starting to see some of the stimulus kick in,” said Doug Roberts, chief investment strategist at Channel Capital Research.”But right now what you have to look at is, though consumption is positive, it’s kind of a tepid rebound versus the huge bounce back everyone was expecting. So we have to see if this is stabilization.”Meanwhile, personal income in May surged 1.4 percent from April as social benefit payments included in the government’s massive economic stimulus jumped. The stimulus provided for one-time payments of $250 to people receiving Social Security, supplemental security income and other benefits.But much of that stimulus money has not yet been spent. The data showed the savings jumped to a record annual rate of $768.8 billion — the highest level since records began in 1959. The saving rate climbed to 6.9 percent, the highest since December 1993.”The rise in consumption was normal, but the rise in income was abnormally high because of government payments to people with the stimulus and social security, etc,” said Richard Hoey, chief economist at Mellon Financial Corp.”You’re going to get a lot of commentary about the super-high savings rate, but the reason the rate was high was because of this abnormal burst of income at a rate that is clearly unsustainable. The rise in the savings rate isn’t reflective of any behavioral phenomenon in the consumer. It is a one-month burst in income.”Also in the basket:JC Penney president resigns to be Foot Locker CEOKB Home posts loss, says housing drop moderatingW-A-L M-A-R-T… M-O-U-S-E! (nytimes.com)(Photo: Reuters)

    • About Nicole

      "Nicole Maestri is a retail correspondent for Reuters and covers some of the world's biggest retailers, including Wal-Mart Stores Inc and Costco."
      Joined Reuters:
      2002
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