March’s weather was not exactly a friend to retailers.

It was cold, damp and even snowy in parts of the country — not quite ideal weather conditions for retailers trying to sell new spring goods, like dresses, sandals, or even fertilizer. (We saw the extent of their struggles on Thursday, when retailers reported dismal March sales figures)

While weather is obviously a very local phenomenon, April so far has not been much kinder than March. According to weather tracking firm Planalytics, this weekend – April 12th and 13th — will be a repeat of most Eastern weekends this spring — a mixture of storminess and cooler temperatures.

But wait … could an upper air pattern be coming to the rescue?

Planalytics said its meteorologists see a change in the upper air patterns between April 16th and 20th. That should result in warm, fair conditions over much of the East and Southeast, extending westward into Texas and as far north as southern Ontario and Quebec, the firm said. 

“Pent-up demand is strong in the East, from the Carolinas to the major Canadian cities of the St. Lawrence, where consumers have been anxious to get out and about. Their gardens need tending, bicycles tuning, and kids want out of the house,”  Planalytics said.

Get ready for surging demand for shorts, sundresses, fertilizer, grass seed, bottled water – even beer — Planalytics said, as people flock to the stores or enjoy the outdoors.

But we can’t all enjoy better weather.

“Unfortunately, the same change turns the Northwest cool and stormy and keeps many of the western and central Canadian provinces out of the fair weather,” the firm said.

(Photo: Reuters)

Check out the consumer confidence. Yep, didn’t think you could find it.

According to the Reuters/University of Michigan Surveys of Consumers, consumer confidence fell to its lowest level in 26 years.

Twenty-six years ago, Ronald Reagan was president, the Berlin Wall was still standing, Olivia Newton-John topped the music charts with the single “Physical” (video here) and rich oilmen topped the TV ratings on “Dallas.”

And memories of the 1970s “stagflation” — a period of low growth and high inflation — were still fresh in consumers’ minds, dragging down confidence.
 
Today the growth is low — some experts think the U.S. economy is already in recession — and consumers are being battered by rising food and fuel prices.

Still, inflation is nowhere near the double-digit levels seen in the 1970s. But the Reuters/University of Michigan report showed one-year inflation expectations jumped to 4.8 percent — the report’s highest reading since October 1990.

As for other comparisons with 1982? The U.S. president is now the son of Reagan’s vice president, the Berlin Wall came down long ago and Olivia Newton-John’s physical activity is walking along the Great Wall of China to raise money for cancer research.

As for rich oilmen? Well, oil is trading at about $110 a barrel. Maybe that’s why there has been an attempt to make a “Dallas” movie.

Also in the basket:
 
For Fortune Brands CEO, loss is win (WSJ, subscription required)
 
Russia retailer X5 to buy Karusel for up to $970 mln
 
Linens ‘n Things seen nearing bankruptcy (WSJ, subscription required) (NYPost)

 (Photos: Reuters, Warner Bros.)

M-A-R-C-H S-A-M-E-S-T-O-R-E S-A-L-E-S.

The overwhelmingly dreary news today from U.S. retailers reporting March sales results was enough for Lazard Capital Markets analyst Todd Slater to utter the “R” word with gusto.

Referring to a recession in consumer discretionary spending, Slater said: “The numbers on consumer discretionary spending this month indicate that a recession is in full swing.”

According to the Free Dictionary , that means a recession is already “at the highest level of activity or operation.” Therefore, Slater reasoned, it may be time to start buying some retail stocks.

Slater was not alone. The Standard & Poor’s retail index was up more than 2 percent on Thursday afternoon.

According to Slater’s “Beat-O-Meter” only 30 percent of retailers posted March same-store sales that exceeded Wall Street estimates, well below the average of 50 percent. 

“While the first half of March was very strong, owing to early school vacations and the Easter shift, sales fell off precipitously at the end of the month, suggesting a bigger giveback than expected.”

But if you believe that things can only get better from here, Slater says investors should focus on companies that:

1) have strong top-line growth visibility, driven by increasing brand cachet and/or global exposure, such as American Apparel, Deckers Outdoor, Iconix Brand Group, Warnaco, Wolverine World Wide and VF Corp.

2) have already suffered through a self-imposed recession, have lowered expenses and inventory liability significantly and can meet/beat earnings estimates through margin expansion, even in a weak top-line environment, such as Limited Brands.

Case in point: Limited Brands said on Thursday that same-store sales at its Bath & Body Works chain fell 13 percent but that merchandise margins were up “significantly”.

Enchanted orchid or pineapple mango body cream anyone?

Check out Old Navy sales getting torpedoed from within.
 
There’s a lot of weakness out there as retailers report March sales today, with cold, wet weather keeping the already skittish consumer from the stores.
 
But one chain that stands out is Gap’s Old Navy division, which is looking more like McHale’s Navy than a mighty Armada.
 
The unit posted a 27-percent decline in same-store sales in March and at least some of the damage appears to be self-inflicted.
 
A company spokesman said on a recorded message that the brand has put too much emphasis on women’s fashion, at the expense of more basic items. He said the company plans to adjust the mix to achieve more of a balance.
 
But Old Navy has a tough course to navigate as it faces competition form a host of other brands that also sell basic apparel for the family, like shorts, cargo pants and T-shirts.
 
The company brought in well-known designer Todd Oldham last fall as creative director and in February the division’s president, Dawn Robertson, left Gap in what the company called a mutual decision. Tom Wyatt, president of Gap Inc’s outlet division, took over while a search for a permanent replacement was launched.
 
But will Old Navy’s new skipper find anything seaworthy?

Also in the basket:
 
Sales from Wal-Mart, JC Penney, Target, Aeropostale, Costco and others
 
JC Penney CEO doesn’t see US downturn ending soon
 
Rite Aid posts Q4 loss on charge; outlook disappoints 
 

Check out the tiny profit at Circuit City.
 
The electronics retailer surprised investors by not posting a loss in the fourth quarter. The company had a $4.85 million profit, even though sales fell 7.7 percent.
 
Faced with a push by investor Mark Wattles to oust chief executive Philip Schoonover  (pictured), the company is trying to simplify store operating procedures and sell more add-on services like home theater installations and warranties.
 
But the company is still facing what it calls the worst macroeconomic environment in years. And now that it has completed a store overhaul, the company needs to show it can improve customer service before Circuit City can show some juice.
 
Also in the basket:
 
New Nestle CEO faces billionaire’s dilemma
 
Retailers’ costs rise faster than prices-Carrefour
 
Signet year profit down, outlook tough
 
Candid Camera: Trove of videos vexes Wal-Mart (WSJ, subscription required)

 (Photo: Reuters)

“Not as bitter!” “What’s with the flayed mermaid”? “Smooth …” “What? Free coffee?”

Just a few of the comments overheard this morning in the busy newsroom — journalists are a highly caffeinated bunch, after all — about Starbucks Corp’s new coffee brew called Pike Place Roast, launched today.

Folks, including this reporter, lined up outside Starbucks coffee houses across the country today as barristas passed out free 8-oz (227 gram) samples of the coffee that the global coffee chain hopes will stave off competitors such as McDonalds Corp in the economic downturn.

“The reality is, they have enough brand equity with their consumers they can afford to experiment,” said Matthew Kaufler, a fund manager with Clover Capital. Kaufler, a Starbucks drinker whose professional portfolio does not include the coffee chain, had yet to try the new blend, but said Starbucks stock, given its 40 percent fall since a year ago,  ”is starting to look enticing.”

The new blend, which sells for $9.95 per pound (454 grams) has a smoother flavor and finish, the company says. That appeared to be the general assessment in this newsroom, although some drinkers questioned Starbucks’ new label on the cup. The brown band — formerly green — now features a mermaid whose tail is splayed in two like a butterflied chicken.

“It’s actually a siren,” said a Starbucks spokeswoman. “A siren is a two-tailed mermaid.”

Aha. Indeed.

The two-tailed mermaid harkens back to the company’s roots at the fishermen’s haven of Seattle’s Pike Place Market, the spokeswoman said. The new logo, which looks like the company’s original label, will be seen on cups for a few months, after which the green and white cups — on which a much smaller siren is visible — will reappear.

But, back to the taste.

Thumbs up or down? Bitter or smooth? Is the mermaid — siren, sorry — distracting or enticing?

Please share your thoughts, caffeinated readers, and tell us what you think of Starbucks’ new brew.

 (Photo: Reuters)

Anyone else getting tired of talking about dreary, stormy, cold weather?
 
Well, it will still be one of the topics at hand this week when most retailers release their March sales results on Thursday.
 
Granted, the biggest challenge for most retailers not named Wal-Mart is a U.S. economy that may well be in recession. (Wal-Mart has been getting a bit of a boost as people trade down from other retailers to shop in its stores — although they’re mainly shopping in Wal-Mart’s grocery category, which has lower margins than other goods.)
 
But a little bit of sunshine might help.
 
Planalytics said temperatures in North America were the fourth coolest in the past 10 years, with the Pacific Northwest and the middle of the country being among the coolest regions.
 
There was also snow as far south as Dallas, while heavy rains fell in the Northeast.
 
“Even with the earliest Easter in 95 years, the weather kept spring purchasing depressed to last year,” Fred Fox, Planalytics President & CEO, said. “In addition to seasonal demand being down to last year, overall foot traffic was negatively impacted by significant precipitation and snow events.”
 
Maybe things would get better if everyone sang “Rain, rain, go away?”

(Photo: Reuters)

Check out the free coffee!
 
Starbucks will be handing out free 8-ounce samples of its new everyday brew called Pike Place Roast on Tuesday at 9 a.m. Pacific time (noon eastern).
 
But the free coffee is not just about generosity. Starbucks is counting on  the new coffee as one tool to help reinvigorate U.S. traffic, which has been slowing in recent months.
 
The Pike Place Roast brew is supposed to remind consumers of Starbucks’ early Seattle roots. The company says the coffee has a smoother flavor and finish.
 
The new brew is one of several steps Starbucks announced last month — including a new customer rewards program and new espresso machines — as it tries to draw customers back amid a weak U.S. economy and competition in the coffee business from McDonald’s.
 
Also in the basket:
 
Countdown at Cavalli: Bidding process begins for stake in firm (WWD)
 
Asian inflation begins to sting U.S. shoppers (N.Y. Times)

 (Photo: Reuters)

Check out Papa John’s countering U.S. pizza sector woes by continuing its global expansion and announcing plans to open more locations in Canada.

Last month, at the Reuters Food Summit in Chicago, Papa John’s CEO Nigel Travis said the pizza industry was under more pressure than it was at the beginning of the year.

“I personally think we are in a recession,” Travis told the Summit, adding that U.S. consumers are increasingly concerned about the economy.

To offset struggles in the U.S. market, Travis talked of Papa John’s international growth potential, and on Monday the world’s third-largest pizza company said it had signed development deals to open 57 additional Papa John’s restaurants throughout Canada. 

“Canada is a key focus area for our international expansion,” said David Flanery, Papa John’s chief financial officer and managing director, international. 

There are currently 14 Papa John’s restaurants open throughout Western Canada. The chain has more than 3,200 locations open worldwide, including 450 international restaurants in 28 countries.

Also in the basket:

Nestle eyes big takeovers in health food push

Borders, Pershing Square in revised financing deal

HSBC loses disc with data on 370,000 customers

Aeon posts 1st profit fall in 10 yrs, sees recover 

(Photo: Nigel Travis speaks during the Reuters Food Summit in Chicago March 18)

Americans spend 10 percent of their disposable income on food, including restaurant meals and snacks, according to U.S. Dept. of Agriculture figures.

That reliable needle may start to shift as food prices rise. Globally, food prices have jumped 75 percent since 2000, the World Bank calculates. Look at the graphic on the left for another view; the U.N.'s Food and Agricultural Organization figures food prices spiked 23 percent in 2007. See full data here and note the surge in diary prices. The rising costs are affecting trade and subsidies polices and sparking unrest in parts of the world. (More in the Reuters special report on Agflation)

For some Americans, the rising food prices has meant a pullback on spending on clothes, jewelry or home furnishings, retail reporter Nicole Maestri details today, noting that Wal-Mart's grocery business and its emphasis on low prices is spurring a resurgence at its U.S. stores and in its stock price.

Have rising food prices changed your shopping list? What are you pulling back on?

(Image credit: FAO)