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Walgreen Co and Rite Aid both reported sales at stores open at least a year, pointing to shoppers filling more prescriptions but buying less discretionary summer merchandise. Walgreen said same-store sales in June rose 3.4 percent, while smaller rival Rite Aid saw sales slip 0.6 percent.

Economists and analysts had previously pointed to signs the recession may be nearing an end, but the news is still mixed as the number of jobs cut in June was higher than expected and the unemployment rate rose to 9.5 percent.

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(Reuters photo)

Berlin

For the fifth time, up-and-coming fashion designers are meeting in the German capital to present selections from their latest collections at the Berlin Fashion Week, which is attracting increasing interest from the international fashion scene.

Maia Guarnaccia, vice president at IMG Fashion Europe, which organises the fashion week in Berlin as well as similar events in New York, Miami and Amsterdam, said last year marked a turning point for Berlin.

“Since July (last year) people are now calling us to be here,” he said, adding that it used to be the other way around.

“Berlin still is an oasis,” Guarnaccia said. “Because it is more accessible” than other fashion capitals like Paris, London or Milan, where the cost of living as well as production and rents are a lot higher, he said. This, he said, attracts young designers especially in a time of global economic recession.

“People get more creative in times of a crisis,” he said, having also worked for British fashion designer Vivienne Westwood in the past.

One of the fast-rising stars is designer Pablo Ramirez. Born in Buenos Aires in 1971, Berlin marks one of his first international shows.

“Berlin is another important door to Europe,” Ramirez said after the show. He was invited to come to Berlin after winning top fashion awards in Argentina. “I’m very nervous and excited,” he said.

His summer 2010 collection featured mainly elegant black dresses and suits and was accompanied by almost melancholy sounding strings.

It was followed by a bright, colourful and upbeat show by South African designers Jacques van der Watt and Danica Lepen with their Black Coffee label -- which featured red, blue and red silky smooth wrap-around dresses adorned with golden laces.

A few minutes walk away from the main venue, another show launched in a big white tent set up at the heart of the city, next to the opera house. The German natural clothing brand Hessnatur show is the latest collection with other ecological designers in several rooms of Berlin's famous Adlon Hotel. 

Hessnatur was founded more than 30 years ago by environmentalist Heinz Hess and won over designer Miquel Adrover as creative director in 2007. Hessnatur decided to show in Berlin after his gig at last year's the New York Fashion Week triggered a wave of media interest. “Requests have risen brutally,” said Chief Executive Wolf Luedge.

Why so busy? Well, actress Julia Roberts recently ordered some clothes for her next movie and Vogue just did a photo shooting with Cameron Diaz wearing Hessnatur’s frocks.

While the future looks bright for the company, there is still a great deal of uncertainty. Hessnatur is part of German retail and tourism group Arcandor which filed for insolvency last month.

Luedge could not say what would happen to his company now, but said: “Hessnatur will come out of this one unharmed. I am not worried. Not at all.”

IMG’s Guarnaccia added more optimism. Berlin would make its way, he said: "The success will be a blend of German brands, established designers and newcomers.”

The National Retail Federation’s STORES magazine is out with its annual ranking of the top 100 retailers.

The list shows that U.S. consumers have been focused on bargains and basic necessities, such as food and medicine.  Wal-Mart tops the lineup, followed by Kroger and Costco.  Home Depot fell from No. 2 in 2007 to the fourth spot in 2008 as many shoppers decided to cut back on costly home-improvement projects.

Home Depot, Lowe’s and Sears Holdings were the only members of the top 10 to see their revenue fall in 2008.

Some other rankings that may interest you: Amazon.com is the 19th largest retailer, ranking higher than well-known chains such as J.C. Penney, 7-Eleven and Gap.  Apple’s stores and iTunes combined hold the 40th spot, topping chains such as Nordstrom, Whole Foods and Barnes & Noble.

The companies were listed by annual revenue, which may include estimates for private or closely-held companies.  Revenue from major non-retail operations were excluded when possible.

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Turf War at the Hot Dog Cart (New York Times)

(Reuters photo)

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The long anticipated arrival of warm weather helped boost U.S. consumer spending 1.6 percent in the week that ended June 27, from a week ago – the strongest gain since matching its Jan. 31 results, according to a stody by the International Council of Shopping Centers and Goldman Sachs.

On a year-over-year basis, sales rose 0.6 percent.

“A bout of seasonally hot weather late in the week helped to trigger consumer spending,” ICSC chief economist Michael Niemira said in a statement. “This late June sales spark was a welcome sign for the industry and the economy. ”
 
However, he added, ”for the month as a whole, June sales continue on track for a ‘tough’ month with the early part of the month weighing heavy on its performance.”
 
Excluding Wal-Mart Stores, which has stopped reporting monthly sales, the ICSC expects June sales to be down by about 5 percent.

Investors, analysts and consumers are watching for signs the U.S. recession may be nearing an end.

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(Photo/Reuters)

Starbucks will start selling a high-grade variety of fair trade-certified Rwandan coffee in Britain and Ireland next year as part of its effort to source more fair trade beans across East Africa. 

The world’s biggest coffee chain has pledged to have all coffee sold in its 700 British and Irish outlets fair trade-certified, which would make it the largest purchaser of such coffee in the world. 

Coffee represents Rwanda’s biggest foreign-exchange export earner in an economy which has been rebuilt following the 1994 genocide of 800,000 people.

(Photo\Starbucks)

More recently Family Dollar added 200 more food products — including a bigger selection of pasta and Kraft salad dressings — to its shelves.

As the economic downturn persists, that decision to focus on food appears to be paying off as more shoppers seek low prices on food.

With many consumers losing jobs or seeing their hours cut to part time, shoppers also have more time and greater incentive to compare prices and scour a variety of stores for deals.

The average household made 13 trips to a dollar store in 2008, up from an average of 11 in 2001, the Nielsen Co said. But the average household made 59 trips to supermarkets in 2008 — 13 fewer visits than in 2001.

Shopper Juan Bugueno told Reuters that he shops the Albertsons, Ralphs and Whole Foods grocery stores in his Venice, California, neighborhood — but prefers the dollar store for staples like vegetables and eggs.

“It’s cheap and it’s good,” he said as he purchased bagged spinach and garlic at a busy 99 Cents Only Store.

So, where are you shopping for your groceries these days? Are you venturing into dollar stores instead of heading to the supermarket?

Pharmacy chain Walgreen Co and Delaware are playing hardball in a battle over cuts in prescription drug reimbursements — a model other cash-strapped states could follow as they try to compensate for budget shortfalls.

Delaware plans to reduce the amount it reimburses pharmacies for filling Medicaid prescriptions though by half as much as it previously intended.

Medicaid provides health insurance to low income people and is jointly funded by states and the federal government.

Walgreen, Delaware’s largest pharmacy with 62 stores, says it would lose money on most branded drug prescriptions it fills for Medicaid patients under the state’s new plan. It will now stop taking Medicaid prescriptions as of July 6. 

So far, the 100 or so other pharmacies in Delaware are not taking Walgreen’s cue.

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Retailers cut back on variety - (WSJ - subscription required)

(Photo/Reuters)

Featuring outfits designed during seventh- and eight-grade art classes, Manhattan Academy of Technology (P.S. 126) put on a real runway show, which was hosted by Stacy London, from the TLC network’s instructional fashion program “What Not to Wear”.

Dresses were the most popular design, but ranged in style from casual sundresses to metallic-sheened party dresses to an asymmetric gown. Two even featured recycled materials.

For these talented 12 to 14 year olds, one thing seems clear. If they keep it up, they could make a killing come prom time.

(Photos by Manny Torres)

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.”

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(Photo: Reuters)

That may be what people at the National Retail Federation and the Retail Industry Leaders Association are feeling today after the two groups said they ended merger talks.

“RILA and NRF have ended discussions aimed at merging the two organizations. NRF and RILA will devote all resources to continuing the work they are each doing to address the serious issues that America’s consumers and retailers are facing in today’s economic environment,” the two boards of directors said in a joint statement.

At first it seemed so good — like a merger made in (retail trade group) heaven.  And they spoke so fondly of one another, too.

“The challenges and opportunities before our members are unprecedented. Now is the right time to bring these associations together,” said RILA Chairman, Robert Niblock, CEO of Lowe’s Cos, and NRF Chairman Mike Ullman, CEO of J.C. Penney, in a joint statement when they announced talks over the merger in April.

Though merger talks have broken down, the two organizations will continue to work toward very similar goals of lobbying for the Organized Retail Crime Act and the E-Fencing Enforcement Act, and against the the Employee Free Choice Act.