Shop Talk

Retailers, consumers and prices

Check Out Line: NRF says Americans plan to get their pumpkin on

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pumpkin1Check out the spending boost planned by Americans for Halloween.

The National Retail Federation said spending by the 148 million Americans who partake in the “spooky” October holiday is expected to surge almost 18 percent this year as revelers look for any reason not to think about high unemployment and a shaky housing market.

“In recent years, Halloween has provided a welcome break from reality, allowing many Americans a chance to escape from the stress the economy has put on their family and incomes,”  NRF CEO Matthew Shay said in a statement.

“This year, people are expected to embrace Halloween with even more enthusiasm, and will have an entire weekend to celebrate since the holiday falls on a Sunday,” he added. 

Americans will spend an average of $66.28 on costumes, candy and decorations (or a total of $5.8 billion), up from last year’s average of $56.31. However, that is still short of the $66.54 spent in 2008, according to the study conducted by BIGresearch for the NRF. Retailers love Halloween because it comes between the back-to-school and December holidays in luring consumers into stores.

Check Out Line: Surprise, surprise, a discount retailer is doing well

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dg1Check out the strong quarterly profit at discount retailer Dollar General.

The company, which prices most of its merchandise below $10, posted a stronger-than-expected profit thanks to bargain-seeking consumers who spent more per visit. Company executives talked of building sales momentum during the quarter and sales results in the current three-month period were encouraging.

As a result, Dollar General, which has received a boost from high U.S. unemployment rates, raised its full-year earnings forecast.

Check Out Line: Warning, slow recovery ahead

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homedepot1Check out signs that a slow recovery is in the offing.

Retail executives see only gray skies ahead as U.S. shoppers are still spending cautiously, giving weight to the notion that a recovery will remain weak beyond 2010.

“The economic backdrop is not optimal,” Ken Perkins, president of retail research firm Retail Metrics, told Reuters. “It’s not catastrophic like it was in 2008 and the first quarter of 2009, but it’s just very sluggish.”

Check Out Line: More corporate earnings to parse

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walmart1Check out the latest raft of quarterly earnings.

With investors and denizens of Main Street alike dissecting various government reports and company press releases for hints on the relative strength or weakness of the U.S. economy, the latest slew of quarterly earnings arrived to parse, including better-than-expected results from Wal-Mart Stores and Home Depot.

Wal-Mart posted a better-than-expected profit helped by cost cuts and growth in international markets as sales at U.S. stores open at least a year fell. The world’s largest retailer also raised its full-year profit forecast.

Check Out Line: How Lowe’s can you go?

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lowes1Check out the weaker-than-expected earnings at Lowe’s.

Giving fuel to pessimists about the U.S. economy, Lowe’s, the No. 2 home improvement chain behind Home Depot, posted a quarterly profit and sales that missed analysts’ expectations, and also forecast lackluster earnings in the current quarter, underscoring “limited visibility into near-term demand.”

Sales at companies like Lowe’s had benefited immensely from the homeowner tax credit and cash for appliances programs, but now more and more uncertainty seems to be the watchword.

Check Out Line: Consumers beware! Rising prices even at Wal-Mart

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walmart1Check out rising prices even at Wal-Mart.

Pressures created by rising costs have caused even the world’s largest retailer, known for its ”rollback” discounts, to boost the prices that consumers pay for groceries.
    
Wal-Mart Stores raised average prices on supermarket items by about 6 percent in a month, according to a recent J.P. Morgan study in Virginia that compared the prices of 31-item goods sold at its supercenters, and at supermarket rivals Kroger, Safeway, Harris Teeter and Whole Foods.
    
Specifically, the study found that prices at a supercenter in Virginia rose 5.8 percent, the most significant sequential increase since JP Morgan started price comparisons in January 2009.
    
While the world’s largest retailer remains the cheapest among supermarkets, rivals such as Kroger and Safeway are gaining ground, according to J.P. Morgan.
    
Rising costs of raw materials and oil are pressuring companies to pass on costs to consumers with higher prices.

Indeed, clothes makers such as Nike, VF Corp and Hanesbrands are facing the same conundrum. And British baker Greggs said soaring wheat prices were set to push up costs, emphasizing a theme that may be repeated for such food makers as General Mills, Kellogg, Kraft and Sara Lee.

Check Out Line: Modest gains expected for U.S. retailers

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shop1Check out the modest gains expected for U.S. retailers in July.

U.S. retailers look set to report a small improvement in same-store sales for July as anxious consumers cut back on spending and big chains returned to discounting to lure them into stores.

Analysts are expecting same-store sales growth of 3.1 percent, compared with a decline of 5.1 percent last year, with department stores and discounters showing the biggest gains, according to Thomson Reuters.

Check Out Line: Earnings to quench investors’ thirst

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pepsi1Check out the latest quarterly earnings for signs of a recovery.

Whirlpool and PepsiCo both reported better-than-expected quarterly profits and pointed to improving trends, lending hope to optimists that the economy is slowly improving.

While citing continuing macroeconomic challenges, PepsiCo, which makes Tropicana juice, Frito-Lay snacks and Quaker Oats in addition to its namesake cola,  posted stronger-than-expected results and affirmed its earnings per share growth target for the fiscal year.

Check Out Line: Cautious notes hit by top luxury execs

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bulgari1Check out the cautious notes being sounded in the global luxury market.

Industry executives voiced concerns about everything from unemployment to Europe’s brewing economic crisis, but are nonetheless banking on growth from China and a recovering U.S. market.

Leading officials speaking at the Reuters Global Luxury Summit said the debt crisis in Europe is threatening to halt luxury’s rebound, but demand for fine merchandise was picking up in the United States while China’s shoppers were venturing frequently into Tokyo for top brands.

Check Out Line: A glimmer from Zale’s

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Check out who is paying full price for bling.  ZALE/

More people at Zale Corp, that’s who.

The jeweler still posted a loss in the first quarter, but it was less of a loss than a year earlier.

Merchandise margins also rose, the result of less promotional
price cutting.

Zale has also cut expenses, closed stores and trimmed inventories. And it got some relief from its liquidity problems earlier this month, when private equity firm Golden Gate Capital lent it $150 million for five years and took a 19.9 percent stake.

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