Shop Talk

Check Out Line: June jobs data disappoint

Check out the latest batch of grim data about the U.S. job market.

U.S. employment fell for the first time this year in June, renewing concerns about the strength of the U.S. economic recovery.

Weaker-than-expected private hiring and the end of thousands of temporary census jobs translated into a decline of 125,000 nonfarm payrolls, their largest fall since last October.

Analysts polled by Reuters had expected employment to fall 110,000 last month.

Private employment, often regarded as a better gauge of labor market health, rose only 83,000 in June, below market expectations for a 112,000 gain.

Retailers, wrestling with high labor costs and cautious American consumers, also seem to be playing safe while seeking new employees. Retail hiring fell 6,600 in June.

Also in the basket: Blockbuster wins debt reprieve, forced to delist

Check Out Line: Sam’s Club outsources, sheds 10 percent of jobs

Check out Sam’s Club cutting 11,200 jobs or about 10 percent of its workforce as it outsources in-store product demos and sheds jobs for recruiting new business members to its warehouses.

Sam’s Club, a division of Wal-Mart, will use a third-party company, Shopper Events , rather than its own staff to essentially hand out food samples or demonstrate electronics to passersby, allowing Sam’s Club to let go of about 10,000 mostly part-time workers. (Though they can apply for new jobs with Shopper Events.)

Sam’s Club is also getting rid of about 1,200 staff responsible for recruiting new business members.

(The move has some echoes of Saks Inc’s decision to offload workers at its cosmetics and fragrance counters at its Fifth Avenue flagship store by the end of this month and have outside vendors staff their counters.)

Sam’s Club’s moves could put extra pressure on rival Costco, which has resisted mass layoffs, said Wall Street Strategies analyst Brian Sozzi in a note on Monday.

Also in the basket:

* Italy’s Ferrero rules out bidding for Cadbury * Bang & Olufsen unexpectedly posts Q2 loss

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Check Out Line: Jobs still hard to come by

Check out the rise in the number of U.S. workers filing new claims for jobless benefits.

Hurt by layoffs in seasonal industries, the initial claims for state unemployment insurance rose 17,000 to a seasonally adjusted 474,000 in the week ended Dec. 5 from 457,000 in the prior week, the Labor Department said.

Analysts polled by Reuters had forecast claims climbing but only to 460,000.

The data that came in after five straight weeks of declining claims suggest that many casualties of the worst financial crisis since the Great Depression are still having a difficult time finding jobs.

Also in the basket:

Overseas sales prop Costco results

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: Green shoots sprouting?

Check out a glimmer of hope on the employment front.   Planned layoffs for U.S. firms fell in April to their lowest levels since last October, according to a  report from outplacement consultancy Challenger, Gray & Christmas.    Okay, layoffs are still at recessionary levels, with U.S. employers announcing plans to cut 132,590 jobs in April.   But CEO John Challenger says the fact that they are falling could mean that employers are a little more confident about future business conditions.   If employers start feeling more confident and stop laying off people, that could spur more confidence in employees and eventually get them to spend more at retailers, which, after all, is what this blog is about.   In a report by Discover, the credit card issuer, the number of consumers saying the economy was getting better was 23 percent in April.  While that might not seem like much, it is still 8 percentage points better than in March.   Also, 51 percent of consumers said the economy was getting worse, down from 61 percent in March.   “Consumers continue to approach their spending with caution, albeit a little less so in April,” said Julie Loeger, senior vice president of brand and product management for Discover Financial Services.  “As they grow more confident in the economy and their finances, consumers may boost their spending; which should help with an economic recovery.”   Are these the “green shoots” of an improving economy, or just optimism waiting to get shot down?   Also in the basket:   Carlsberg Q1 doubles on Eastern Europe gains, cost cuts   In Target tussle, a store becomes a battlefield (N.Y. Times)   Barneys aiming to close two stores (Wall Street Journal)

(Reuters photo of job fair)

Check Out Line: Shopping? No thanks

Check out a persistent weakness in consumer attitudes.

On a scale of 0 to 100, where 100 is “very confident,” general economic perception of consumers fell to 36.7 in February from 38 in October, according to a survey by retail research firm NPD Group. The survey uses online answers from 1,000 people each month.

On the heels of worries over the economy, consumers’ intentions to shop also weakened. NPD’s study showed a more than five-point drop to 35.4 in February, compared to 40.7 in October.

“While a five-point drop doesn’t seem like much, it represents millions of dollars,” said Marshal Cohen, chief industry analyst at NPD.

U.S. consumers have held back on shopping in the past months as they contend with weak home values, tight access to credit and the fear of job losses in a recession.

But not all is lost.

NPD did note that although consumers’ confidence about the economy was fading, their worries about job security were leveling off. While the number of consumers most concerned about job security peaked in December at 38 percent from 33 percent in October, it fell to 34 percent in February.

Check Out Line: Too Many Chickens

Check out more grim news on the jobs front, from the food sector.

Pilgrim’s Pride became the latest consumer-related company to cut jobs when it said on Friday that it plans to idle three U.S. plants because of an oversupply of chicken and weak consumer demand. The plants, in Georgia, Louisiana and Arkansas, employ about 3,000 people, or about 7 percent of the company’s U.S. workers.

The chicken producer, which is fighting to emerge from Chapter 11 bankruptcy protection, said the closings were needed to reduce production of low-value meat that is draining its finances. 

But it’s not just chicken producers feeling the crunch of the recession. 

Reuters reporter Bob Burgdorfer wrote this week that Americans are eating more hamburgers and fewer steaks as the economy wallows in recession — leading to huge losses at U.S. feedyards that fatten the cattle for steaks.

The U.S. Agriculture Department has said that prices for cattle, hogs and turkeys will stay weak for much of this year because of oversupply even as the nation’s meat production declines.

Also in the basket:

Check Out Line: Unemployment line grows

Check out more than half a million more people looking for work.   The layoffs have been all over the news, but when you see them all added together it shows just how bad this economy is.   The economy shed a worse-thank-expected 598,000 jobs in December. That’s the worse one-month drop since Richard Nixon was president.    “The report is awful. it’s even worse than it looks, because people did not hire workers prior to Christmas, but they still did enormous layoffs after Christmas,” Cary Leahey, economist at Decision Economics.   Retailers shed 45,000 jobs in January and have cut 219,000 jobs since November as they went through the worst holiday shopping season in at least four decades.   And the hits just keep on coming. Macy’s  cut another 7,000 jobs on Monday.   Where’s that stimulus again?   Also in the basket:   Tim Hortons, Cold Stone to wed doughnuts and ice cream   Hermes, LVMH bring relief to luxury sector   Amazon New York event spurs talk of new Kindle model

(Photo: Reuters)

Check Out Line: Not so cool for Kool

Check out how it’s no longer cool to be Kool.

Reynolds American has given the Kool brand a demotion, moving it to what it calls a “support” brand – meaning it will actually get less support.

Before Tuesday, Kool had been a “growth” brand, which meant that, along with Camel and Pall Mall, it was one of the brands where Reynolds focused most of its marketing efforts.

Kool also had been Reynolds’ leading brand in the menthol cigarette market, a market that has been growing while the rest of the U.S. cigarette market shrinks.

Now Reynolds wants is leading brand, Camel, to be its leading menthol brand, too. So Kool gets kut.

But Kool can at least take heart that at Reynolds, the brand designations can fluctuate. Pall Mall was once a “support” brand, but Reynolds saw it growing even without the extra marketing dollars. So one day Pall Mall got the call to come hang out with the popular crowd. In other words, it was cool to be Pall Mall. 

(Additional reporting by Brad Dorfman)       Also in the basket:

Check Out Line: Of incomes, spending and jobs

Check out more signs of consumers being put in a vise.   Personal income rose 0.1 percent in June, the Commerce Department said. That was the lowest rise since April 2007.   And in fact, if it were not for the economic stimulus checks some consumers received in June, disposable income would have shrunk, the department said.   Meanwhile, costs continued to rise. The personal consumption expenditures price index — an inflation gauge — rose at its highest year-over-year pace since May 1991.   Consumer spending rose 0.6 percent in June, but actually fell 0.2 percent accounting for inflation. So consumers are spending more to get less.   Oh, and one more thing on the gloomy economic front, Challenger, Gray & Christmas Inc said planned layoffs at U.S. companies rose 26 in July from June.   Also in the basket:   Retailer Boscov’s files bankruptcy, may be sold   Walgreen July same-store sales up   Burani says investor eyeing bid for 15-18 percent stake   Calvin Klein’s latest controversy (WWD)

(Photo: Reuters)