Check out a survey showing that younger U.S. consumers are trimming travel plans as well as turkeys during Thanksgiving.
    
More young professionals (37 percent) are adjusting their Thanksgiving travel and spending plans than the affluent and general population (both 30 percent), according to a survey by American Express. Young professionals are defined as less than 30 years old, having a college degree and a minimum annual household income of $50,000.
    
The young guns also are pulling back in other areas:
 
* 11 percent of young professionals plan to drive instead of flying, compared to 7 percent of the general population and 6 percent of the affluent, who are defined as having a minimum annual household income of $100,000. 
    
* 8 percent of young pros plan to shorten their stay for the Thanksgiving holiday weekend, compared to the affluent and general population (both 3 percent). 
 
* 7 percent of young pros will use rewards points, miles and special offers to offset the cost, versus 4 percent of the affluent and 3 percent of the general population.
    
Overall, American Express found 30 percent of U.S. consumers plan to adjust this year’s travel plans for Thanksgiving — historically one of the busiest travel days of the year — but only 21 percent expect those expenses to decline from last year.
    
Those who are changing their plans said they will rely more on travel by car, stay for a shorter time and cash in rewards to help pay for holiday trips as they become more selective amid the high unemployment and soft housing market.

However, in a positive sign, sales at U.S. retailers excluding vehicle sales rose for the second straight month in September, raising cautious optimism consumer spending could support the economic recovery.
    
The American Express survey also showed that the young professionals are cutting back for Halloween, when consumers spent $5.8 billion last year according to the National Retail Federation.
    
* 36 percent of young pros are buying less expensive costumes and decorations.  The rate is 16 percent among the affluent group and 15 percent among the general population. 

* 26 percent of young pros are making their own costumes or using hand-me-downs.  Again, that is higher than the 13 percent of affluent respondents and 11 percent of the general population. 
    
Looking ahead to the winter holiday season, sale prices are still king when it comes to early shoppers.  Eighty-two percent overall said they would be enticed by some sort of discount, with almost all of the young professionals (96 percent) and affluent (94 percent) agreeing.
    
It appears easier to entice the young set.  They would be willing to spend with discounts as low as 10 percent, according to American Express.  The affluent said it would take a discount of nearly 30 percent, on average, for them to buy. 
     
Also in the basket:

Pepsi, Anheuser to jointly buy goods, services

Kraft opens $50 mln Russian biscuit factory

Host Hotels beats estimates on cost cuts

Diageo’s Q1 sales dip 6 pct, sending shares lower 

Handbags and snoods help Burberry top forecasts

(Reuters photo)

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.

The U.S. housing slump’s impact is well chronicled, but PepsiCo CEO Indra Nooyi said it also has hurt sales of the company’s Gatorade sports drink.

Nooyi — on a conference call with analysts after the maker of Pepsi-Cola and other sodas and Tropicana juices reported a better-than-expected quarterly profit – said she has met with convenience store CEOs who told her the weak U.S. housing market has resulted in fewer construction workers stopping by for sports drinks and other snacks on their way to the job.

“One of the things that used to happen is the construction worker used to pull up with the pickup truck at 6 or 6:30 in the morning, buy six or seven bottles of 32-ounce Gatorade, a few bags of Doritos, throw it in the truck and pull off to the construction site. With housing starts being down as much as they are, that construction worker is not coming through the (convenience store) to pick up that Gatorade and so there’s no question that we have lost that active-thirst occasion related to that construction worker who was toiling in the hot sun.”

Nooyi said the Gatorade franchise will shrink in the short term, but the company is running the business with the long term in mind.

She said PepsiCo will not go to lower “private-label pricing” and is “jealously guarding” the brand’s equity. She said the core athletic user is extremely loyal and that the company is offering other products to retain casual users who might be lured by lower-cost tap water, bottled water and in some cases soft drinks. 

Nooyi said Gatorade previously experienced strong growth due partly to the rising number of casual drinkers and warmer-than-normal weather. Now, those casual drinkers have more options, the weather has cooled and the recession has some buyers trading down.

John Compton, CEO of PepsiCo’s Americas Foods business, added that higher unemployment and lower housing starts had indeed hurt convenience stores, particularly in the snack business over the last three to four months. However, he said more broadly in the company’s “up and down the street” channel, which includes convenience, dollar and drug stores, the total business has not changed very much as the dollar stores have picked up quite significantly.

(Reuters photo)

Check out how less bad is the new good.

The latest example of this new reality is Home Depot’s revised profit outlook.

The world’s biggest home improvement retailer said this year’s earnings from continuing operations could be flat to down 7 percent.  That compares with its earlier call for a fall of 7 percent.

Home Depot Chief Executive Frank Blake said in a meeting with analysts that economic indicators are signaling that the worst of the housing downturn is over.

Home Depot still expects sales to fall by about 9 percent this year, with sales at stores open at least a year down in a high-single-digit percentage range. It expects gross margins to be flat to slightly higher.

Also in the basket:

Rising U.S. mortgage rates sap loan applications

Pimco bond manager sees “green shoots” of recovery

Gap and Stella McCartney to launch new kids line

P&G taps Army vet as new CEO

(Photo: Reuters/Rick Wilking)

Check out the not-so-chipper news in the retail world.

Restaurant chain Burger King reported lower profits and cut its full-year forecast due to the currency fluctuations, while cosmetics and perfume companies Estee Lauder and Elizabeth Arden rang up lower, albeit better-than-expected, profits and said they would cut jobs.

Indeed, retailers overall posted the second weakest monthly same-store sales performance since Thomson Reuters began tracking the data in 2000 as heavy job losses, weakness in the U.S. housing sector and the still-tight credit markets have many consumers closing their wallets.

In the mixed-bag camp, apparel retailer Gap saw same-store sales fall more than expected, but raised its full-year profit outlook.

There is some good news out there, however. 

Discount giant Wal-Mart posted a better-than-expected increase in sales at U.S. stores open at least a year, almost double what analysts had expected. Meanwhile, Kellogg’s quarterly profit rose and the cereal maker stood by its 2009 profit outlook, and department store operator Macy’s saw a smaller-than-expected decline in same-store sales and raised its fourth-quarter profit forecast.

Also in the basket:

Talbots announces cost cuts, $200 mln loan

Signet to cut costs as Q4 sales fall sharply

Flash is out for wealthy on Valentine’s Day

(Photo/Reuters)

Home Depot is hoping that U.S. President-Elect Barack Obama will take actions that will help bring the housing market out of its years-long slump.

As recent as early September, the retailer’s top executive said the housing market may be nearing the bottom of its decline. But that was before the financial crisis and rising unemployment took a toll on consumer confidence.

Now, the world’s largest home improvement chain says it is not seeing the better trends it had expected and noted that some housing markets, such as the U.S. Northwest, have worsened compared with a year ago.

“We think it’s prudent to be cautious,” Chief Financial Officer Carol Tome said in an interview this week after Home Depot posted better-than-expected third quarter results.

Though she didn’t give specifics on what the incoming U.S. president could do to aid the housing market, she expressed hope that Obama would do something.

“Anything the Obama administration can do for housing is certainly something we’d support,” Tome added.

She said rising unemployment now poses a major threat to consumers, who are cutting back their use of credit and paying more with cash.

Tome noted that during previous U.S. recessions, it was ultimately the strength of consumers that helped lead the economy out of a slump. But this time, they are the ones hurting the most.

“If they’re losing their jobs, it’s hard to see how they’ll take us out (of recession),” she said.

(Photo: Reuters)

Check out the Whirlpool of woe.
 
Five thousand. That’s the number of jobs Whirlpool plans to cut by the end of next year as it faces falling sales in North America and a potential global recession.
 
Appliance makers have already been hammered by the U.S. housing collapse. Now the credit crunch is likely to keep demand down, the world’s largest appliance maker said.
 
“The global credit crisis has had a profound negative impact on what was already a weakening and very fragile global economy,” Whirlpool Chief Executive Jeff Fettig (pictured left) said in a statement.
 
Some of the job cuts had already been announced. Others were new. They all add to a slew of job cuts announced by corporate America in recent weeks.
 
That creates a spiral of people not being able to buy the goods the manufacturers make, which could cause manufacturers to cut more jobs as the economy keeps swirling down the drain.
 
Also in the basket:
 
Sam’s Club opening new store called Mas Club
 
Retailers slash Blu-ray player prices (WSJ) 

Pershing to unveil suggested Target “transaction”

Wal-Mart cutting US store openings further

Wal-Mart says ‘relentlessly’ non-partisan in US election 

(Photo: Reuters)

Sears, Roebuck is looking to grow home-goods sales by adding stores away from malls as shoppers flock to new retail centers.

That off-mall strategy includes more dealer stores located in smaller, rural markets, and home appliance showrooms in big cities.

Sears has about 860 dealer stores and 24 appliance showrooms, in addition to its more than 900 traditional mall-based stores. This year, the retailer is adding 75 dealer outlets and about 50 appliance showrooms, said Steve Titus, vice president of Sears Dealer Stores, in an interview.

The Hoffman Estates, Illinois, retailer is the top-selling U.S. appliance chain but has seen its dominance challenged as home-improvement stores such as Home Depot and Lowe’s expand their offerings.

Now, as Home Depot and Lowe’s cut their store growth in the slowing U.S. economy, Sears Holdings is looking to grow key businesses in hopes of benefiting when conditions improve.

The appliance showrooms (pictured), which include as much as 5,000 square feet, are located in high-traffic retail strips that also include other big-box stores such as Target.

Sears is hoping the appliance showrooms, which are currently in Minneapolis, Dallas, Houston, Atlanta and some other big cities, will help fill the gaps in areas not served by its mall stores or existing dealer stores.

“If we pull this off right, it could really help us grow our appliance business,” Titus said.

The dealer stores are locally owned and operated. Owners pay rent and expenses and Sears provides the products and pays a commission for selling them.

Even in the slow economy, “we have several hundreds of people requesting ownership of these stores right now,” Titus said.

Photo/Sears

Check out some positive signs for home improvement stores?
 
Goldman Sachs raised its rating on Lowe’s to “buy” from “neutral,” citing, in part, stabilization in the housing market.
 
“Stabilization” might be a stretch. But Goldman noted that home sales fell 15.5 percent in July, following a 17.9 percent decline in June. The drop was the smallest since July 2007 and marked the fifth consecutive monthly improvement.
 
The tumbling U.S. housing market has clobbered both Lowe’s and Home Depot, so any signs that the worst might be over could be a good thing for those companies.
 
Relatively calm hurricane seasons in the last two years have also hurt the retailers, Credit-Suisse analyst Gary Balter said.
 
Both retailers historically receive bumps from hurricanes, with Katrina, Rita and Wilma in 2005 “having a measurable impact not just on near term sales trends but on rebuilding for nearly one year past the hurricane event,” he said in a research note.
 
Gustav, Hanna, Ike, Josephine and what is currently a tropical depression could lift sales for Lowe’s and Home Depot, he said,
 
“Among natural disasters, hurricanes rank as the most sales impactful because unlike major winter storms, earthquakes or tornadoes, they are predictable providing a sales lift on both sides of the event,” Balter wrote.
 
He did note that both companies keep prices and margins low during natural disasters, but the impact of rebuilding still works its way to the bottom line.
 
Also in the basket:
 
Apparel insiders fear death by “safe” fashion
 
Onward buys Jil Sander owner
 
Back-to-school is looking like a flop (N.Y. Post)

 (Photo: Reuters)

Check out Williams-Sonoma predicting that this fiscal year, it ”will be operating in one of the most challenging macro-economic environments we have seen in many years.”

The upscale home goods retailer, which operates the Williams-Sonoma, Pottery Barn and West Elm chains, reported higher-than-expected fourth quarter profit on Thursday, helped by an extra week of sales in the quarter compared with last year.

But the deteriorating U.S. housing market has not been a friend to retailers that make a living selling furniture and home decorations, and Williams-Sonoma, not very surprisingly, gave an earnings forecast for its current fiscal year that is below Wall Street expectations.

Acknowleging that it cannot turn around the macro environment, it is choosing to focus on a micro-enviroment — its own business.

It said it will be ”focused on the things we can control,” like reducing discretionary costs, keeping a close eye on inventory and cutting the number of catalogs it mails.

Also in the basket:

ConAgra to sell trading busines; quarterly net up

Movado quarterly net up

McCormick profit tops view; ups ‘08 sales outlook