Check out a lack of government stimulus checks and rising gas prices weighing on consumers –and the retailers that are trying to sell them stuff.

Best Buy reported lower earnings for its fiscal first-quarter (which ended May 30), and said sales at its stores open at least 14 months declined the most during May. A year ago it got a boost in that month when shoppers came into its stores to spend those government stimulus checks.

The consumer electronics retailer said fewer customers visited its U.S. stores during the quarter. Sales of gaming items, digital cameras, appliances and movies fell, while notebook computers, mobile phones and repair services sold well.

Meanwhile the The ICSC-Goldman Sachs chain store sales index for the week ending June 13 declined by 0.6 percent from the prior week and fell by 1.5 percent from the prior year — the weakest
year-over-year performance in seven weeks.

The ICSC said overall customer traffic was off for the week relative to the prior period, and higher gasoline prices ate into the consumers’ ability to spend on discretionary merchandise. According to the U.S. Energy Information Administration, the average price of a gallon of regular gasoline rose by 4.8 cents over the latest week–its seventh consecutive weekly rise for a cumulative increase of 62 cents per gallon.

The ICSC said that for June, it now expects sales (minus Wal-Mart, which no longer reports monthly same store sales) to be down by about 5 percent from its year-ago level.

Earlier this month, it said it expected June same-store sales would fall 3 percent to 4 percent. 

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Smithfield Foods loss less than expected

Tod’s sees low single-digit sales growth in 2009

Procter & Gamble buys men’s skincare brand Zirh

(Photo: Reuters)

Check out hopeful signs that the recession may be abating.

While recent reports showed slumping sales at many big-box retailers, there are other signs that the economy may be bottoming.

U.S. retail sales rose in May and the number of workers who filed new applications for jobless benefits last week fell for the fourth straight week.

The Commerce Department today reported that U.S. retail sales rose 0.5 percent in May, thanks partly to gasoline sales that jumped 3.6 percent. Meanwhile, the Labor Department said initial jobless claims fell to their lowest levels since Jan. 24.

Discount retailer Target has increased its quarterly dividend, Clorox did the same while also affirming its 2010 profit outlook and financial targets for 2013, and Del Monte posted far stronger-than-expected quarterly earnings and provided a better-than-expected 2010 forecast.

Not all the news has been hopeful, however.

While last month’s U.S. foreclosure activity ebbed from April’s record high, homeowners were still struggling to keep up with house payments and May foreclosure filings were the third-highest on record.

Unemployment is at its highest level since July 1983. Some economists are talking about a “jobless recovery”, gas prices are rising and spiking mortgage rates are cooling demand for new home loans.

The weak economy has led to haggling in some unexpected places – namely  Tiffany – and forced other exclusive brands like Juicy Couture and Louis Vuitton to join the retail hoi polloi in trolling online for sales via Facebook and Twitter.

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Stimulus cash brings hope to poor U.S. youth

Jamba CEO eyes long-term growth, menu expansion

Lululemon posts lower profit, sees flat quarter

Look Who’s Shopping Goodwill (New York Times)

Restaurants Take Trip to Store (Wall Street Journal)

(Photo: Reuters)

Check Out Wal-Mart’s price cuts for eggs, milk, butter and bread in Ontario, Canada.

If you are counting pennies but still want that morning coffee and omelet, you can now buy one- and two-liter milk cartons for $1.77 and $2.97 respectively or a dozen large eggs for $1.97, if you shop at Wal-Mart’s Ontario stores.

The world’s top discount retailer said that besides cutting prices for those staple food items in its Ontario stores, it will also slash prices on hundreds of products across Canada in September, after a round of different price cuts in August.

Wal-Mart’s decision is yet another nod to the fact that more and more shoppers are squeezed for money these days.

“With looming back-to-school costs, gas-pump woes, food-price hikes, and a struggling provincial economy, times are tough for many of our Ontario customers,” said Vi Konkle, Wal-Mart Canada’s chief customer officer, in a release.

It certainly looks like Wal-Mart is paying close attention to consumers’ money-saving actions, such as drawing up shopping lists to avoid spending extra money, consolidating shopping trips, avoiding costly items and buying cheaper store-brand products.

Konkle said milk, butter, eggs and bread feature prominently on people’s shopping lists, and that is why they’re getting their prices cut.

With that move in Canada, how far behind is a round of price reductions in the United States?

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Starbucks says more discounts, promotions coming

Suitmakers hit hard as retailers want discounts

Tiffany U.S. fortunes could turn at holidays

Linens ‘n Things may file restructuring on Friday - NY Post

(Photo: Reuters)

Check out retailers’ profits and forecasts.

A discerning shopper, or investor for that matter, could browse the aisles of the retail financial world and come away with very different messages on the strength of the U.S. economy depending on which company’s results they chose.

On the plus side,  upscale jeweler Tiffany posted a better-than-expected profit and raised its full-year outlook, although that was driven by strong sales overseas. Tiffany expects U.S. same-store sales to return to growth in the fourth quarter. Shoe and hat retailer Genesco, and home-appliance and consumer-electronics retailer Conn’s also topped Wall Street’s views and boosted their forecasts.

For the pessimists out there, Williams-Sonoma saw its profit fall and it cut its forecast, while Sears Holdings also fell short of expectations amid the weak housing market.

Somewhere in the middle was discount store operator Fred’s, which reported a profit in line with what analysts were expecting.

Retailers have been hit in varying degrees as consumers dial back discretionary spending due to the pressure from high food and gasoline prices. Even as the U.S. economy grew stronger than first thought in the second quarter, economists see growth slowing as the year progresses.

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Genesco posts better-than-expected profits; ups views

Williams-Sonoma profit falls, forecast cut

Sears Holdings profit falls short

Fred’s Q2 profit in line with market estimates

Michael Kors (but You Knew That) (New York Times)

(Photo: Reuters)

Check out the fading influence of tax rebate checks.

Tax rebate checks helped boost June retail sales but their influence appears to have petered out by July, according to data released by the Commerce Department on Wednesday.

The figures showed that total sales at U.S. retailers declined 0.1 percent in July, which was in line with forecasts made by Wall Street economists. A big reason for the drop was a fall off in auto sales. Auto and auto parts sales fell 2.4 percent in the month, their biggest drop since April, and were off a whopping 10.5 percent from year-ago levels. 

But excluding autos, retail sales were up 0.4 percent in July. That was roughly in line with forecasts, but down from a 0.9 percent rise in June. 

Economists said before the numbers were released that spending has been supported by government stimulus checks but that the stimulus effect was waning in July because most of the checks already have been issued. Meanwhile, prices for many food items are on the rise and there was only a slight moderation in gasoline prices during the month. 

The Commerce Department said gasoline sales in July were up 0.8 percent after a 4 percent June jump. But reflecting higher prices, gasoline sales were 24.6 percent higher than in July last year. 

Excluding gasoline, retail sales in July fell 0.2 percent after a 0.1 percent June decline.

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CVS Caremark to buy Longs in $2.54 bln deal

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(Photo: Reuters)

Check out how international sales and the weak dollar continue to lift quarterly results at U.S. companies.

Second-quarter profit at cosmetics firm Avon Products Inc more than doubled, as demand in Latin America and other overseas markets more than made up for sagging U. S. results.

Office Depot posted a 6 percent drop in North American retail sales, but a 13 percent rise in international sales during in its most recent quarter.

Still, investors are wondering when and if the United States’ economic malaise will spread to markets like Europe, Asia and Latin America.

Some cracks are already showing. Britain’s stressed housing market is putting pressure on consumer spending and Spain has reported a plunge in June retail sales amid a severe economic slowdown.

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Los Angeles City Council passes fast-food ban

Oil slide, US glimmers of hope boost stocks

Jones Apparel 2nd-qtr profit tops estimates

(Photo: REUTERS/Jo Yong-Hak)

Check Out how the spiking price of oil and lifeless consumer spending are affecting more consumer companies.

Supervalu, whose chains include Albertsons and Save-A-Lot, didn’t see any increase in its total quarterly sales. Its food sales were actually down 0.7 percent, but the company saved itself in part with lower expenses, and reported a higher quarterly profit.

But the No.3 U.S. supermarket chain cut its full-year outlook, acknowledging the effect of tight consumer spending, as shoppers are increasingly squeezed by high gasoline and food prices.

Pizza chain Domino’s didn’t think much of its situation either. 

The company’s second-quarter profit, excluding some items, missed Wall Street’s estimates and its Chief Executive David Brandon said returning to positive same-store sales in the United States has “proven difficult” for the company. The problem? The same as it is for others– high costs, struggling consumers.

“We are in a turnaround mode, which is not fun,” Brandon said.

No fun indeed, as is the case for most companies these days.

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SunTrust sells big Coke stake, profit falls 21 percent

Hermes sees no reason to join CAC 40, shares fall

Unilever agrees to Bertolli olive oil/vinegar sale

U.S. back-to-college spending to fall this year - survey

Protests, ambush marketing hurt Olympic brand

Why Dora the Explorer Can’t Come To Your Kid’s Birthday Party - (WSJ)

(Photo: Reuters)

Check out all those billions of dollars in U.S. tax rebate checks failing to give June retail sales much of a boost.

The Commerce Department said on Tuesday that total sales at U.S. retailers rose a less-than-expected 0.1 percent in June.  Economists polled by Reuters had forecast total retail sales to rise 0.4 percent in June, following a 0.8 percent gain in May.

Part of the weaker-than-expected results were due to falling demand for cars. Auto and auto parts sales fell 3.3 percent in June — their worst month since February 2006.  But even excluding autos, retail sales rose 0.8 in June, which was below the consensus estimate of 1.0 percent. Excluding autos, building supplies and gasoline, retail sales rose 0.4 percent in June. 

Economists had expected government tax rebate checks to give a bigger boost to retail sales in June, despite the weak overall U.S. economy, as shoppers had excess cash to spend. But last week, major retail chains, like J.C. Penney,  Target and Gap, released their June sales results and many did not see a rebate boost. Penney said it might have received a “modest” sales lift from the checks but any benefit would be “short lived.”

So where did the billions of rebate cash go?

Well, Wal-Mart got a chunk. Its June U.S same-store sales rose at their highest level in years as traffic in its stores jumped. The retailer had offered to cash tax rebate checks for free.

Surging gasoline prices likely gobbled up an even bigger chuck of the rebate dollars. The Commerce Department said gasoline station sales rose 4.6 percent in June as motorists faced higher prices at the pump. Over the past year, gasoline station sales have jumped 24.5 percent to nearly $46 billion last month, on a seasonally adjusted basis.

Charles Grom, a retail analyst with JP Morgan, estimates that every 1 cent increase at the pump, translates into $1.4 billion of lost consumer spending power. “Therefore, the (roughly) $1.00 jump in retail gas year-over-year should more than offset the $106 billion stimulus package,” he wrote in a note last week.

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Newell Rubbermaid to exit certain product lines

Kimberly-Clark cuts year outlook, says profit fell

(Photo: Reuters)

Check out the quarterly results at Walgreen, one of the largest U.S. drugstore operators.

The company posted a 2 percent increase in quarterly profit, amid a weak U.S. economy and slowing growth in sales of prescription drugs —  in the reported quarter, Zyrtec was switched to over-the-counter status.

And a slower-than-usual flu season — (good for you and me) – wasn’t so good for Walgreen. The company also pointed to the milder flu period for a slowdown in prescription drug sales volume in the quarter.

The company said it is on track to beat its goal of opening 550 new drugstores this year — and perhaps even come to the rescue of cash-strapped shoppers in the process.

“We’re adding neighborhood locations for today’s customer who is searching for value and struggling with high gas prices,” President Greg Wasson said in a statement on Monday.

As of May 31, the company operated 6,727 store locations in 49 states, but will be in all 50 states when it opens its first Alaska stores in 2009.

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Bunge to buy Corn Products for $4.4 billion

Costco plans Australia foray to challenge duopoly

Busch family member backs ’strong’ Anheuser Busch

Jones Apparel takes stake in Asian partner

(Photo: Reuters)

By Ben Klayman

Check out how high gas and commodity costs are crimping Hershey and Best Buy.

Chocolate maker Hershey cut its long-term earnings growth target and said it would boost advertising as it moves to reverse falling profits.

However, the largest U.S. chocolate company, which is meeting with analysts, said the pressures it faces — soaring prices for cocoa , energy and other commodities — remain the same.

“We expect 2009 to be another trying year for us with respect to input costs,” Chief Executive David West said.

The price of oil has surged to $133 a barrel and that has pushed up costs across all industries.

The government said rising energy prices sent producer prices – a gauge of costs at the farm and factory gate — up a bigger-than-expected 1.4 percent in May. Housing starts fell in May to their lowest level in more than 17 years as that industry grapples with the subprime mortgage meltdown.

Meanwhile, consumer electronics retailer Best Buy reported a lower, but better-than-expected quarterly profit thanks to market share gains in TVs, computers and video games.

Like all retailers, Best Buy has faced slowing consumer spending due to rising gasoline and food prices prices, as well as the U.S. housing slump.

Also in the basket:

Reuters Consumer and Retail Summit coverage

(Photo: REUTERS/Susana Gonzalez)