Shop Talk

Retailers, consumers and prices

Check Out Line: August sales offer same old look

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sell.jpgCheck out the same old sales story
 
Wal-Mart and other discounters: good. Saks and other high-priced retailers: bad.
 
The pattern seen over the past several months held again for August as cash-strapped consumers sought back-to-school bargains. 
 
Generally speaking, it’s bad form for little Johnny to show up for school naked and without notebooks and pens and pencils. So parents have to shop at least a little bit when school starts.
 
But as expected, they shopped where they could save money.
 
Back-to-school season can also set the trend for the key holiday shopping season. So the question becomes whether this will be a discount Christmas.
 
Employers are cutting back as much as they can, in order to be more profitable. That has led to a huge jump in productivity, but at the expense of jobs.
 
The August jobs report on Friday is expected to show that employers continued their job cutting in August.
 
Not a great sign for holiday cheer.
 
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Check Out Line: Sales strength back at U.S. golden arches

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arches.jpgCheck out the strong sales at McDonald’s in the … United States?
 
The world’s biggest restaurant chain posted its largest monthly U.S. same-store sales gain since February, when Leap year added an extra selling day. Barring the Leap year, July was the best month in 11 months.
 
It seems like only a few months ago people were worried that cash-strapped U.S. consumers would start shunning restaurants altogether, even the less expensive ones like McDonald’s.
 
In fact, it was. The company posted a drop in U.S. same-store sales in March, the first such decline in five years.
 
But the U.S. rebounded and strength in U.S. sales in July is a sign that the company is benefiting as consumers trade down from casual-dining restaurants like Red Lobster and Applebee’s, and that the value message of McDonald’s is attracting customers, analysts said.
  
Growth in high-margin items like drinks could also help the company offset rising hamburger commodity prices, UBS restaurant analyst David Palmer said in a research note.
 
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Hormel gives lower 3rd-qtr view; cuts ’08 outlook
 
Rising grain costs hit consumers (Wall Street Journal, subscription required)

(Photo: Reuters)

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