Shop Talk
Retailers, consumers and prices
Check Out Line: Surprise, surprise, a discount retailer is doing well
Check 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.
U.S. consumer spending rose in July at the strongest pace in four months, offering hope that consumers will be able to keep contributing to a modest economic recovery.
Meanwhile, overseas the message was mixed as Carrefour, Europe’s top retailer, said the summer sales trend was mixed in Europe but demand was holding up in emerging markets. Company executives acknowledged sales trends in Europe in August were slightly disappointing after a satisfactory July.
Check Out Line: Modest gains expected for U.S. retailers
Check 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: Gov’t stimulus may only help some retailers
Check out how the new economic stimulus will help retailers. But only some of them.
The U.S. government’s $787 billion emergency economic stimulus, passed into law in February, aims to create or protect up to 3.5 million jobs while putting more money in consumers’ hands in the hope that they will spend it and boost the economy.
Check Out Line: No more 99 Cents in Texas
Check out 99 Cents Only Stores closing all of its Texas stores.
99 Cents, which sells a variety of household, food and other items often priced at 99 cents, says it will now focus on its core markets of California, Arizona and Nevada, where it has 230 stores that make up 90 percent of its sales.
Those states are also some of the hardest-hit by the U.S. housing crisis and credit crunch, and consumers pressured by rising gas and food prices are trading down from higher-priced stores to discounters to save money, a positive for 99 Cents.
Wal-Mart looks to political convention ads to lure shoppers
TV viewers may be undecided about how they will vote in the upcoming presidential election, but if Wal-Mart has its way, they should not be undecided about where to shop.
As the Democratic and Republican National Conventions get underway, Wal-Mart is preparing to launch a series of TV ads that will highlight how consumers, worried about the economic climate, can save money by shopping at the discount retailer.
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