Shop Talk

Retailers, consumers and prices

This holiday, gift cards may go toward gas, food

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gasoline.jpgGift card spending may be a little less frivolous and a lot more practical this holiday season.

Based on its 2008 Holiday Gift Card survey, Archstone Consulting expects gift card sales will fall 5 percent to $25 billion this holiday. The firm also expects gift card spending will shift toward household necessities like groceries or gas, or small indulgences, like dining at restaurants. 

Gift cards have exploded in popularity in the recent few years, and retailers typically count on customers coming back into their stores quickly after the holiday season to use their gift cards — and spend more than the value of the gift card.

But as consumers began to feel pressured by high gasoline and food costs last year, that did not quite work out as hoped.

Check Out Line: No more 99 Cents in Texas

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cowboy-boots.jpgCheck out 99 Cents Only Stores closing all of its Texas stores.

99 Cents, which sells a variety of household, food and other items often priced at 99 cents, says it will now focus on its core markets of California, Arizona and Nevada, where it has 230 stores that make up 90 percent of its sales.

Those states are also some of the hardest-hit by the U.S. housing crisis and credit crunch, and consumers pressured by rising gas and food prices are trading down from higher-priced stores to discounters to save money, a positive for 99 Cents.

Check Out Line: Fewer burrito buys at Chipotle

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chipotle.jpgCheck out Chipotle blaming poor sales on the lackluster U.S. economy.

Like other restaurants, Chipotle is struggling to attract customers as high gas and food prices leave people with less disposable income to spend on going out to eat. Discounters like Wal-Mart are capitalizing on that trend by pushing products like its cook-at-home pizza and other ready-to-eat dinner products.

For Chipotle, high food costs are a double whammy, as they must pay more for the ingredients to make the food that people are buying less of.

Sears sets up its own Fashion tent, hopes to wow the crowds

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sears.jpgThe big white tent that houses New York City’s Fashion Week was joined by another, smaller tent on Wednesday. Set up behind the main event, in a corner of Bryant Park, Sears erected what it calls a “lifestyle exhibit.” Also housed under a white tent, the meandering exhibit was meant to showcase Sears’  brands – well-established names such as Kenmore appliances and more recent products like a new clothing line by rapper LL Cool J.

The tent was divided into rooms with themes like “Alpha Dog” that featured a DieHard motorcycle, and “Boho Grunge,” that had mannequins playing Rock Band.

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.
 
Also in the basket:
 
U.S. chicken industry still hurting – Sanderson farms
 
Polman a surprise pick to revive Unilever fortunes

Check Out Line: Wal-Mart cuts prices in Canada

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walmart-milk.jpgCheck 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.

Wal-Mart looks to political convention ads to lure shoppers

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wmtecon5.JPGTV viewers may be undecided about how they will vote in the upcoming presidential election, but if Wal-Mart has its way, they should not be undecided about where to shop.

As the Democratic and Republican National Conventions get underway, Wal-Mart is preparing to launch a series of TV ads that will highlight how consumers, worried about the economic climate, can save money by shopping at the discount retailer.

BJ’s: Prices are going up and competition may be “brutal”

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costco1.jpgLate last month, Costco warned its quarterly profit would miss Wall Street estimates as soaring costs and inflationary pressures ate into its margins.

While the cost of the goods it sells was going up, the No 1 U.S. warehouse club operator said it was delaying passing along price increases to shoppers in order to boost its sales and appeal to cash-strapped consumers.

Wake Up! It’s Hannah (prank) calling

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miley.jpgOn July 23, Shop Talk wrote about Wal-Mart teaming up with Disney to offer free wake-up calls from Hannah Montana, (a.k.a. Miley Cyrus), as part of its back-to-school marketing push.

Parents can use the service to send their child a wake-up call — as early as 5 am — to get them ready for the new school year.

Drug stores top hot list with acquisitions

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(Due to a tabulation error in the research, STORES Magazine has issued a corrected list. This is being corrected to remove Coldwater Creek from the Top 10 list and replace it with Citi Trends at No. 10) 

cvs.jpgThough the retail industry cooled last year to its slowest growth since 2002, a number of retail companies experienced fiery growth, according to the National Retail Federation. The hottest retailers, in general, grew through acquisitions, according to the trade group’s STORES Magazine.

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