Shop Talk

Check Out Line: Toys R Us says more is merrier this Xmas

Check out the latest attempt by a U.S. retailer to win shoppers ahead of the key holiday shopping season.

Toys R Us is planning to open about 600 pop-up stores in malls and shopping centers around the United States this Christmas season. That is more than six times what the world’s largest dedicated toy retailer opened last year. Many of those nearly 90 Toys R Us Express locations have remained open through 2010.

The company, which already operates 587 full-size Toys R Us stores, said the latest initiative should broaden its reach and win more shoppers.

“By doubling the number of Toys R Us locations nationwide, now more than ever we will be available when and where customers want to shop with us this holiday season,” CEO Jerry Storch said.

The company will also bring some cheer to the ailing jobs market by hiring about 10,000 temporary workers to staff these stores.

Also in the basket: Holiday shipping up in the air in weak U.S. economy

McDonald’s France lags in August; shares fall

Bad economy equals tough time for teeth

We all know that people have cut back on shopping, dining out, vacations and other pursuits in the difficult economy. Turns out many are also neglecting their smiles.

More than 90 percent of dentists surveyed by the Chicago Dental Society said clients are putting off cosmetic procedures, up from 60 percent a year earlier.

The stress of unemployment and other concerns also are taking their toll.  Sixty-five percent of dentists saw an increase in jaw clenching and teeth grinding among their patients.

The dental group released findings from its fall 2009 survey this week as it holds its 145th annual Midwinter Meeting in Chicago.  The three-day event, which wraps up on Saturday, gives dental professionals the chance to check out new toothbrushes, chairs, goggles and other tools.  And it looks like companies are in tune with the tough times.  Reuters Shop Talk took a stroll through the main floor of the show and saw several companies offering dentists discounts of 40 percent or more on power toothbrushes and other dental goods if they bought them on the spot.

More than 75 percent of the dentists surveyed said patients are putting off needed dental work and a majority said visits for preventative dental care were down.

The survey was conducted before Tiger Woods‘ personal life was major news, but apparently he was already on many people’s minds. His smile, along with that of actor Tom Cruise, topped the list of most requested celebrity smiles when male patients came in. Among women, Julia Roberts had the most requested smile for the second consecutive year.

In case you want to start taking better care of your teeth — maybe before that next visit? — dentists were split on which routine is better, brushing and then flossing, or flossing and then brushing.  So we’ll leave it up to you.

from Raw Japan:

Cheap treat keeps Japan sweet

What is sticky, shaped like a fish and helps Japanese people shrug off the lingering effects of the country's worst recession since World War Two?

The economy is struggling but sales of a traditional, fish-shaped sweet snack are going along swimmingly, thanks to its low price and auspicious name.

Taiyaki, which means baked sea bream, is a pancake stuffed with a sweet bean jam and served hot and cheap in stalls all over the country.

The name helps. "Tai", Japanese for sea bream, sounds similar to the word for happiness.

With a price tag of as little as 130 yen ($1.45), the snack, which celebrates its 100th anniversary this year, is making a lot of people happy -- including those needing a job as the stalls are easy to get going. 

"Taiyaki has been around from ancient days but I still want to eat one once in a while," Masako Kano, a 69 year-old housewife queuing outside a new store, told me. "Compared to other cakes, which normally cost around 200 yen to 300 yen, its price is attractive."

Fancy Corporation recently opened its 45th taiyaki outlet in Kawasaki, just south of Tokyo, saying the cheap snack is as popular as ever in tough times. 

Check Out Line: The dreaded 10 percent

Check out the grim unemployment numbers from the U.S. Labor Department on Friday, a day after dozens of retail chains reported lackluster October sales.

U.S. employers cut a deeper-than-expected 190,000 jobs in October, driving the jobless rate to 10.2 percent, the highest in more than 26 years.

Analysts polled by Reuters had expected the monthly unemployment rate to edge up to 9.9 percent from 9.8 percent in September.

While job losses have been mounting for months, some analysts and economists say 10 percent unemployment could deal a new psychological blow to U.S. consumers who might previously have felt that the economy was beginning to stabilize.   

Just last week, news that the U.S. economy had returned to growth instilled hope for a rebound in consumer spending. But the latest reports on retail sales and joblessness suggest that such a result may be further down the road.

So, no matter what gimmicks retailers resort to – be it $10 DVDs or upscale wines – the customer, spooked by an almost daily dose of gloomy economic data, may still be unwilling to open their wallets.

Also in the basket:

Check Out Line: What goes around comes around

Check out what’s coming around again this holiday season.

It’s that gift you gave someone last year.

According to a holiday shopping poll conducted by Consumer Reports in October, 36 percent of Americans say they have “recycled” a holiday gift. That’s up from 31 percent in 2008 and 24 percent in 2007.

Those more likely to re-gift include women, adults under 55 years old, residents of the U.S. West and people with children under the age of 12.

Want to prevent your gifts from making the rounds again?

Skip presents like socks, slippers and ties, which were on the list of most disappointing 2008 holiday gifts, according to the survey.

Or, for a virtually fail-safe bet, try cold hard cash.

Check Out Line: Jonesing for another earnings beat

Check out which company Wall Street keeps underestimating.

It’s Jones Apparel. The retailer and apparel maker once again “reported a much higher-than-expected” quarterly profit. Last quarter, Reuters said the company “beat estimates handsomely.” The quarter before that it was “easily beat estimates.”

Heck, even in the fourth quarter, when almost all retailers and apparel makers were hammered by the recession and credit meltdown, the company reported a “smaller-than-expected” quarterly loss.

Aside from demonstrating that Reuters has several different ways of saying “big earnings beat,” the reports also raise this question: “Why does Wall Street keep missing the mark on Jones?”

One reason could be that the company itself still cannot quite figure out if business is up or down.

For the current quarter — which includes the all-important holiday season — it expects same-store sales to range anywhere from a drop of 2.5 percent to a rise of 2.5 percent.

So come February, you might see the words “eclipsed Wall Street Estimates” connected with Jones earnings.

from MacroScope:

Housing “W”hipsaw looms

America has breathed a sigh of relief since April, as the summer selling season kicked in and the $8,000 first-time homebuyer credit nudged consumers off the fence into the most affordable market in years. These factors, along with easy financing from the Federal Housing Administration, was the first leg up for the "W," said Lisa Marquis Jackson, a vice president at John Burns.

The onset of the weaker selling months, a building pipeline of foreclosures and expiration of the tax-credit on Nov. 30 will likely bring rising prices upturn to a halt, creating a "false peak" and fresh downturn, the group says. Federal efforts have slowed foreclosures but have not addressed many issues including unemployment and underwater mortgages, leaving a heavy "shadow inventory" set to knock prices to fresh lows.

An extension to the first-time homebuyer credit -- bandied about by the Obama administration -- may soften, but not prevent another leg down, the John Burns group said.

"We anticipate that foreclosure activity will remain very high at least through 2012, with the majority of future foreclosures coming as a result of job losses," John Burns, president of the group, said in an outlook.

The second downward thrust to the "W" could also come as the FHA clamps down on credit, they said. Signs of stability in the economy will push mortgage rates higher, meantime.

Once a new, lower bottom in prices is realized in mid-2010, America can see a gradual appreciation thereafter because of weak employment, sluggish economic recovery and continued stress on the banking system, the group predicted.

A brighter view doesn’t lead to increased spending

Americans may have become more confident in the economy but they haven’t started spending heavily again — and that could be bad new for retailers this holiday season.

Discover’s U.S. Spending Monitor for September rose for the second straight month, climbing 2 points to 89 (based out of 100).  Thirty-three percent of respondents said they felt economic conditions were improving, a Monitor high and a 2-point rise from August.

When asked to rate their own financial fitness, 33 percent rated it as good or excellent, up a point from August and the highest percentage in four months. On the flipside, 48 percent said their finances were getting worse, also up a point from the previous month.

Consumers’ spending intentions remained flat.  Many industry watchers have said that the recession has created a “new normal” characterized by a more frugal lifestyle and fewer shopping sprees. Even those people who have remained financially secure, and are not among the 9.8 percent of Americans who are unemployed, have reset spending habits.

To that end, WSL Strategic Retail said that only 17 percent of shoppers plan to go back to shopping the way they used to.

“There appears to be no indication consumers are willing to increase their spending, despite a Monitor-high number of them who feel the economy is getting better,” said Julie Loeger, senior vice president of brand and product management for Discover.   That could cause headaches for retailers, who are hoping that consumers will start shopping again heading into the all-important holiday season.   For the sixth consecutive month, less than half of consumers said that they expected to have money left over after paying monthly bills.   One bright spot, if you could call it that, is that only 43 percent of respondents felt economic conditions are getting worse. Forty-six percent felt that way in August. 

(Photo/Reuters)

from Fan Fare:

NY Fashion Week models feel economic chill

Models at New York Fashion Week are facing an even more competitive environment as many designers continue to down-size and opt for cheaper presentations over runway shows, said Marques Nolan, an agent for Code Model Management.

Model Emily Fox, backstage before the Academy of Arts runway show, said designers are holding less castings making it even more competitive than usual to get modeling work.   It has also become more common for models to be paid in clothes rather than money, she said.

Another model, Alice Gibb, said she was told last minute she wouldn't be needed for a show she had been booked for.

Check Out Line: Suppliers on Kraft chopping block

Check out Kraft slashing its supplier base.   Yes, Kraft is doing more than just trying to buy Cadbury.  The company is still operating its business and part of that is the process of looking to improve its margins.   Kraft told Reuters it plans to cut its supplier base to less than half of its 70,000 companies.   “We’re essentially taking a white sheet of paper and saying ‘what is the right number of suppliers to support this particular category, who are they, what is the capability we need for now and in the future, and does the current supplier base have that,’ ” Julia Brown, senior vice president of procurement at Kraft, said.   Suppliers have been under pressure in recent years as companies look to work with fewer vendors that operate more as partners.   The recovery is actually expected to make things worse for some suppliers as they find out they cannot get financing to ramp up operations as their customers start looking to buy from them again.   The winners will likely find even more business as they work closer with companies.   For the loser, it could be “supply-side wreckonomics.”   Also in the basket:   McDonald’s same-store sales up 2.2 percent   Talbots loss narrower than expected   Jewelry retailer Signet profit tops estimates   Speedo extends sponsor deal with Michael Phelps

(Reuters photo)