Shop Talk

Retailers, consumers and prices

Check Out Line: Moving to a different grocery shop


Check out where the groceries are bought. supervalu
Family Dollar and Supervalu both reported quarterly results today and they seem to highlight the shift in where people are shopping.
Family Dollar saw an 8 percent increase in sales, driven in part by food. The company also raised its forecast for full-year earnings.
Meanwhile grocery store operator Supervalu had flat sales and cut its earnings forecast for the full year.
As the economy remains mired in a recession, people have been shopping places where they can save money. Wal-Mart has been the big winner, but Family Dollar says they are getting a share of that business, too.
“As more families face financial challenges in this environment, they are relying on Family Dollar for more of their everyday needs,” Chairman and CEO Howard Levine said in a statement.
So while Family Dollar is seeing sales grow in the here and now, Supervalu is cutting costs and says it is focusing on the long term in the face of “cautious consumer spending.”
Also in the basket:
Sam’s Club head to be Wal-Mart International CEO
Constellation Brands profit beats view
Wal-Mart, Netflix sued over online video rentals
The price of the new frugality (WWD, subscription required)

(Photo: Reuters)

Check Out Line: How low will retailers go?


cloudsCheck out the days of reckoning for retailers.
This week most U.S. retailers will tell us how December sales went. The news is not likely to be good.
According to Thomson Reuters data, Wal-Mart is about the only one that saw an increase in same-store sales. With a recession, job losses, falling home values and tighter credit, it’s not surprising that most people cut back and that sales fell for most retailers.
But what will be more telling is how much the big sales — like Jos A Bank’s three-for-one suit sale — lead to profit warnings by retailers. Those deep discounts may move merchandise (though even that is debatable in this environment), but they come at the expense of profits.
Retail stocks have actually outperformed the broader market in the past month. But the depth of the profit warnings will likely determine whether those retail stocks also go back on the discount rack.
Also in the basket:
UK retailers ease Christmas fears, but gloom lingers
Smoking ban in cafes puts French off cigarettes
Coming down on tobacco (N.Y. Times)


Check Out Line: More bad news for books and drug stores


Check Out some weakness in book and drug stores sales.

Borders dumped Chief Executive George Jones less than threejones2 years after he joined the No. 2 U.S. specialty bookseller, replacing him with a private equity executive with experience turning around ailing companies. The company, which reported a sales decline of almost 12 percent during the holiday shopping season, also named a new chief financial officer as well as replacing its executive vice president for merchandising and marketing.

In November, Borders said it was no longer pursuing a possible sale of the company even as it posted a larger-than-expected operating loss.

Check Out Line: Holiday wishes for a better economy


Check out samsantaAmericans, fed up with financial doom, who are wishing for a cheerier economy in 2009.

The Marist Institute for Public Opinion in Poughkeepsie, New York, polled 1,003 Americans about their expectations for 2009 on December 9 and 10 — days after the National Bureau of Economic Research confirmed the United States had been mired in a recession since December 2007 — and found that Americans are optimistic that 2009 will be a better year.

Check Out Line: Mixed Sales News


Check Out mixed news on the retail sales front.

Retailers are now out to lure consumers with after-Christmas deals as data show this year’s BRITAIN-SALES/VIEWholiday season was one of the weakest in decades.

The retail data service of MasterCard Advisors said U.S. retail sales fell as much as 4 percent during the holiday season. SpendingPulse tracks sales activity in the MasterCard payments network and couples that with estimates for other payment forms.

Check Out Line: Spending Still Down


Check Out unemployment’s strain on consumers’ wallets.

holidayThis is not what retailers want to hear on the day before Christmas, but evidence continues to mount that consumers are cutting back spending.

The U.S. Commerce Department said consumer spending contracted 0.6 percent in November, the fifth-straight monthly fall. Incomes shrank 0.2 percent. A separate report showed initial claims for jobless benefits last week reached the highest level in 26 years.

Downturn triggers “survival panic.” How are you reacting?


USA-HOLIDAYSALES/Shoplifting, drug use, depression, anxiety and even violence.

These could rise in frequency in the coming months, according to mental health experts, as the U.S. recession leaves consumers confronting a harsh new economic reality — and the prospect of living within diminished means. 

“People start seeing their economic situation change, and it stimulates a sort of survival panic,” said Gaetano Vaccaro, deputy clinical director of Moonview Sanctuary, which treats patients for emotional and behavioral disorders. 

Recession Sells: Slashing prices, outlet-style


Outlet malls are known for their low prices, but the discounts being offered this weekend at Woodbury Common Premium Outlets in Central Valley NY, roughly 45 miles north of Manhattan, were truly eye-popping.

From Geoffrey Beene to Izod to Van Heusen, store windows were plastered with signs offering 40 to 60 to 75 percent off:

Check Out Line: Neiman marked down


NEIMAN MARCUSCheck out how the rich aren’t all that different from the rest of us after all.
They aren’t spending any money either — at least that’s how it looks according to the earnings for upscale department store Neiman Marcus.
Revenue fell 13 percent to $986 million in the first quarter, which ended Nov. 1.
Operating profit, excluding one-time items, fell almost 50 percent.
The results are not necessarily a surprise. Unlike other recent economic slowdowns, luxury retailers have been hit this time around, too.
But the earnings do serve as a reminder that this recession is a falling tide that grounds all boats.
Also in the basket:
Office Depot closing stores, distribution centers
Stores build up cash to weather the storm (WWD, subscription required)

(Reuters photo)

Check Out Line: Hanging at the mall not so fun


shopCheck out how consumers feel about shopping at malls.

Auto dealers and reporters are popular targets for hate mail. But mall operators may have reason to fear joining them if a new study conducted by the University of Pennsylvania Wharton School and the Verde Group, a market research consultancy, is to be believed.

Almost eight of every 10 people surveyed faced a problem at the mall, citing such issues as a limited choice of places to eat, lack of variety of stores, parking difficulties and a shortage of restrooms.