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Retailers, consumers and prices

July 28th, 2009

New doc checks into MinuteClinic

Posted by: Jessica Wohl

minuteclinic_0031The doctor is in.

Dr. Andrew Sussman was named president and chief operating officer of CVS Caremark’s MinuteClinic unit on Tuesday.

Sussman, who was most recently COO at UMass Memorial Medical Center and an associate professor at UMass’s medical school, also became CVS Caremark’s associate chief medical officer.

The company named Troyen Brennnan, Aetna’s former top doc, to the new role of chief medical officer back in November.

The latest appointment comes as CVS tries to expand the reach of MinuteClinic in-store clinics, which can already be found in about 500 locations across 25 U.S. states.  Rival Walgreen has about 345 Take Care clinics in 19 states.

Chip Phillips, who had been MinuteClinic president for just over a year, became president of TheraCom.  That CVS business helps biotech and pharmaceutical manufacturers find commercial success for their specialty products.

Clinics, which have popped up in some Walmart stores and other  retail outlets, have gained some popularity as consumers look for quick, inexpensive advice rather than waiting in emergency rooms or doctor’s offices.

(Photo\CVS Caremark)

July 24th, 2009

Would this label sway your buying decision?

Posted by: Nicole Maestri

This is a picture of a label that might one day adorn the merchandise hanging on a rack at Wal-Mart. wmtlabel2

The final look and feel of the label could change - maybe it would have a number rating instead of a sliding scale.

But Wal-Mart said the idea is to give shoppers a means of calculating the environmental and social cost of making, packing and selling all of the items in its stores.

The labels could take a while to develop — maybe five to ten years — so they wouldn’t necessarily be aimed at the shopper in its stores today.

But they could be a way for the retailer to win the business of the next generation. High school and college students of today may not yet have much money to spend now. But once they start earning a paycheck, according to Wal-Mart, they intend to spend it at retailers that care about the environment.

“This is the No. 1 issue on college campuses today, regardless of what happens with the economy, because they know this is their future,” Chief Merchandising Officer John Fleming said on a webcast when Wal-Mart announced the labels.

There is a lot of work that will need to take place before the label can move from an idea to a reality. And what consumers say they intend to do and what they actually choose to do with their dollars can often diverge. But it will be interesting to see, if the labels do come to fruition, how much shoppers will care and whether a higher green rating is enough to convince them to pay what could be a higher price.

Wal-Mart says it would like to see other retailers embrace the idea and also use such labels. But if they don’t, will Wal-Mart’s rating system on its merchandise be trusted?

(Photo: Copy of a slide included in Wal-Mart’s presentation on developing a sustainability index)

July 23rd, 2009

Check Out Line: Can a $298 laptop jump-start back-to-school?

Posted by: Nicole Maestri

schoolbus2Check out efforts to get serious back-to-school shopping underway.

Wal-Mart announced plans to start selling on Sunday a Compaq Presario laptop for $298.

Gary Severson, Wal-Mart U.S.’s senior vice president of home entertainment, told Reuters he thought the deal represented a “screaming value.”

The retailer also plans to cut the price of an Acer laptop with an 8-hour battery by $50 to $548. The computer has 3 gigabytes of memory, a 320 gigabyte hard drive and qualifies for a free upgrade to the Windows 7 operating system when it is released.

Retailers ranging from Wal-Mart, to Target, to J.C. Penney have outlined their plans to lure back-to-school shoppers. Penney is using a special website, jcp.com/teen, to reach web-savvy teenagers who shop for themselves in the back-to-school period but may have less money to do so this year.

But retailers are confronting cash strapped shoppers, who are watching their pennies as the unemployment rate rises and the housing market remains depressed.

Asked for his view of the back-to-school season, the Chief Executive of UPS, Scott Davis, said on a conference call it was too early to tell.

“We’ve not seen a lot of signs yet based on the air freight market and ocean freight market,” he said.

But he said Wal-Mart’s plans to increase its selection of laptop computers was a good sign and perhaps the back-to-school season would be better — a hope likely held by the entire retail industry.

Also in the basket:

Amazon.com buying shoe seller Zappos for $928 million

Kimberly-Clark 2nd-quarter profit falls

McDonald’s quarterly profit falls

Safeway cuts view after tax matter aides profit

P.F. Chang’s, Chipotle, Domino’s top Street

(Photo\Reuters)

July 1st, 2009

Check Out Line: Buying basics buoys big chains

Posted by: Jessica Wohl

Check out the ten largest U.S. retailers.

The National Retail Federation’s STORES magazine is out with its annual ranking of the top 100 retailers.

wal-mart-meat-shoppersThe list shows that U.S. consumers have been focused on bargains and basic necessities, such as food and medicine.  Wal-Mart tops the lineup, followed by Kroger and CostcoHome Depot fell from No. 2 in 2007 to the fourth spot in 2008 as many shoppers decided to cut back on costly home-improvement projects.

Home Depot, Lowe’s and Sears Holdings were the only members of the top 10 to see their revenue fall in 2008.

Some other rankings that may interest you: Amazon.com is the 19th largest retailer, ranking higher than well-known chains such as J.C. Penney, 7-Eleven and Gap.  Apple’s stores and iTunes combined hold the 40th spot, topping chains such as Nordstrom, Whole Foods and Barnes & Noble.

The companies were listed by annual revenue, which may include estimates for private or closely-held companies.  Revenue from major non-retail operations were excluded when possible.

Also in the basket:

General Mills profit tops view, outlook strong

Constellation Brands earnings beat expectations

Goldman raises Yum Brands to buy

Turf War at the Hot Dog Cart (New York Times)

(Reuters photo)

June 24th, 2009

Check Out Supervalu’s shopper woes

Posted by: Aarthi Sivaraman

Check Out Supervalu’s troubles from consumer thrift.USA-COSTCO/

The third-largest  U.S. supermarket operator, with about 2,500 stores, said that its earnings in the first quarter, which ended on June 20, were hurt by a “tougher than expected business environment.” Its results would be much below analysts’ expectations, the grocer said.

“Since providing guidance on our fourth quarter earnings call, consumers have become more value focused and cautious in their spending, which has pressured sales and margins greater than anticipated,” Supervalu’s CEO Craig Herkert said in a statement.

The pressure on Supervalu underscores how consumers have become highly conscious of how they spend their money in the long recession — shopping mainly for essential items, and seeking low prices even on those products.

Herkert recently took over the top job at Supervalu, after having worked as the president and CEO for discount giant Wal-Mart’s America’s region, which includes Canada, Puerto Rico and parts of South and Central America.

Also in the basket:

U.S. recession to bottom out this year: OECD

Monsanto earnings fall 14 percent

Rite Aid posts narrower loss, lower revenue

Pepsi and Calbee form food deal in Japan

(Photo/Reuters)

June 16th, 2009

Check Out Line: No stimulus checks, gas prices rising

Posted by: Nicole Maestri

Check out a lack of government stimulus checks and rising gas prices weighing on consumers –and the retailers that are trying to sell them stuff.

bbyBest Buy reported lower earnings for its fiscal first-quarter (which ended May 30), and said sales at its stores open at least 14 months declined the most during May. A year ago it got a boost in that month when shoppers came into its stores to spend those government stimulus checks.

The consumer electronics retailer said fewer customers visited its U.S. stores during the quarter. Sales of gaming items, digital cameras, appliances and movies fell, while notebook computers, mobile phones and repair services sold well.

Meanwhile the The ICSC-Goldman Sachs chain store sales index for the week ending June 13 declined by 0.6 percent from the prior week and fell by 1.5 percent from the prior year — the weakest
year-over-year performance in seven weeks.

The ICSC said overall customer traffic was off for the week relative to the prior period, and higher gasoline prices ate into the consumers’ ability to spend on discretionary merchandise. According to the U.S. Energy Information Administration, the average price of a gallon of regular gasoline rose by 4.8 cents over the latest week–its seventh consecutive weekly rise for a cumulative increase of 62 cents per gallon.

The ICSC said that for June, it now expects sales (minus Wal-Mart, which no longer reports monthly same store sales) to be down by about 5 percent from its year-ago level.

Earlier this month, it said it expected June same-store sales would fall 3 percent to 4 percent. 

Also in the basket:

Smithfield Foods loss less than expected

Tod’s sees low single-digit sales growth in 2009

Procter & Gamble buys men’s skincare brand Zirh

(Photo: Reuters)

June 6th, 2009

“American Idol” Kris Allen woos Wal-Mart investors

Posted by: Lisa Baertlein

krisallenIt reminds us of those old Disney commercials in which, after a big victory, a sports star is asked where they are going next, and the answer is "Disneyworld," or something close to that.

But in this case, it is recent "American Idol" winner Kris Allen, who after winning the TV talent contest last month wasn't schmoozing with Mickey Mouse, he was singing for Wal-Mart investors at the mass market retailer's annual meeting in Arkansas on Friday.

Reuters was there (Smokey Robinson was, too) and here's a link to our video of Kris, posted on YouTube.

American Idol winner Kris Allen @ Wal-Mart 2009

June 5th, 2009

The greening of Wal-Mart

Posted by: Lisa Baertlein

walmartsustainable Wal-Mart, which helped promote the adoption of those funny-looking “green” lightbulbs, is making more room in its Sam’s Club warehouse stores for environmentally friendly products — including a water-saving toilet that has one button for flushing liquids and another for flushing solids.

Employees at a Sam’s Club in the discounter’s home town in Bentonville, Arkansas, have emptied shelves of things like power tools to make way for a variety of green products. Similar efforts have taken place in Sam’s Clubs across the United States.

“Our members need and are looking for things that will help them mitigate their energy bills,” said Joel Heiligenthal, buyer of home efficiency products at the club store chain.

 Wal-Mart launched its own private-label compact fluorescent lightbulbs (CFLs) in 2007 and has been selling them in thousands of stores.  

As part of an environmental push started under former CEO Lee Scott, Wal-Mart also has outlined plans to one day be supplied by 100 percent renewable energy.

Check out this video of new CEO Mike Duke telling reporters about the company’s ongoing sustainability efforts in a press conference on June 5.

(Photos: Reuters/Jessica Rinaldi; Video/Lisa Baertlein)

June 5th, 2009

Wider aisles? Cleaner stores? Must be Wal-Mart’s Project Impact

Posted by: Nicole Maestri

walmartelectronicsWal-Mart has a plan to keep shoppers coming into its discount stores once the economy improves and it is called ”Project Impact.”

While the retailer lost customers during the boom years as shoppers spent their dollars in the brighter, cleaner stores of its competitors, Wal-Mart is trying to make sure that doesn’t happen again.

Under Project Impact it is renovating its U.S. discount stores,  widening its aisles, lowering fixtures, improving its signs, installing wooden floors, and adding skylights to present shoppers with a store that fees open and “friendly.”

Check out a little video of a prototype store.

(Photo: Reuters\Jessica Rinaldhi; Video\Lisa Baertlein)

June 5th, 2009

Wal-Mart Marketside test feels economic hit

Posted by: Lisa Baertlein

castrowrightNot too long ago, U.S. grocers were sprinting to be the first to get smaller stores up and running. Not any more.

Wal-Mart Vice Chairman Eduardo Castro-Wright said the world’s biggest retailer is taking its time testing its convenience store-sized Marketside grocery stores, due to the economy.

“We’re pleased with it, but at this point in time given the current condition in the marketplace … we are not accelerating that effort until we have better data to make a decision,” Castro-Wright told reporters after the retailer’s annual meeting.

 In October, Wal-Mart officially opened four Marketside stores in the Phoenix area. The stores cater to shoppers who are looking for ready-to-eat meals and fresh produce, and might not have time for a trip to a full-scale grocery store.

marketsideMarketside stores are roughly 15,000 square feet, while Wal-Mart’s supercenters average 187,000 square feet.

Meanwhile, Tesco – Britain’s largest retailer – has slashed expansion plans for its competing Fresh & Easy stores and the concept is undergoing an “evolution” as the company works to find its sweet spot with U.S. shoppers.

Fresh & Easy’s early plans called for 200 stores in the United States by February 2009. The chain now expects to open its 200th location by November 2010. Fresh & Easy is putting more focus on value and adding about 1,000 items to its small-format Fresh & Easy stores’ current 3,500-product assortment, which represents about 10 percent of what a typical U.S. supermarket carries.

 ”This isn’t about changing the concept of Fresh & Easy,” Tesco spokesman Jonathan Church said. “What we’ve got to do is fine-tune the model for the customer we have before us today.”

(Photo: Reuters\Jessica Rinaldi; Video\Lisa Baertlein)