Retailers, consumers and prices
Barnes & Nobles expects to open 20 to 25 new stores in 2009 — down from 30 to 35 store openings this year.
It’s not that the company wants to open fewer stores, according to Barnes & Noble Chief Executive Joseph Lombardi.
While the bookseller is taking advantage of favorable deals with existing landlords, it said the U.S. housing crisis and credit crunch mean that developers are not able to finance as many new projects — leading to fewer opportunities for Barnes & Noble to open stores in new shopping centers.
“It is true that landlords are offering better deals for many existing centers. As you can imagine, we’re a very, very desirable tenant, and we continue to be very selective about going into existing centers or renovated centers,” Lombardi said on a call with analysts. ”
“But in terms of new development, the principal reason for the pull-back is that many developments are being canceled. So the developers are not able to finance many new projects, and that’s the principal result. So we can’t go somewhere where there’s no center … most of those decisions are not ones that we pulled out of, but where the developer pulled the plug.”
Check out why Heinz didn’t suffer like Hormel did in the past quarter.
Food companies have found it tough going as commodity costs shoot up, but Hormel was particularly hard hit. The reason? It raises the turkeys that it eventually sells — meaning spiking corn feed costs hurt its results.
Check out those coupons from Borders.
In a new report, J.P. Morgan analyst Charles Grom begins tracking the promotional cadence at book sellers. Grom said he is keeping a close eye on discounts and promotions as the price war among book retailers extends into the first half of 2008 and Borders prepares to launch its own e-commerce site.
The view so far? “Borders is still clearly focused on driving the top line, perhaps at the expense of margins, as it remains the most promotional retailer in bookselling today,” Grom wrote.
Borders averages about two coupons per week, with spikes in broad-based discounts during the holiday, quarter-end and month-end periods, Grom said. The company put more promotional focus on specific categories in February and March.
Barnes & Noble’s rewards program, unlike Borders’, is subscription based, with members paying $25 and receiving discounts,
“As such, Barnes & Noble’s direct marketing campaign serves more as a reminder of discounts rather than a limited time offer,” Grom said. But he added that he’s seen some special offers from Barnes over the past several weeks, including a 40-percent discount on kids’ books.
Grom sees the pace of discounts at Borders continuing in the first half as it ramps up e-commerce sales and faces macroeconomic headwinds.
Also in the basket:
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Wendy’s reports lower quarterly same-store sales
Constellation Brands profit tops view