Author: Helen Thomas

Stage Stores, who operate under store banners such a Beall’s, Goody’s, Palais Royal, Peebles and Stage, offers moderately priced brand name apparel, accessories, cosmetics and footwear. They are reporting a strong holiday sales season for 2014. Official fourth quarter and full year 2014 results will be reported March 3, but Stage is reporting same store sales for the nine week period ending January 3, 2015 at an increase of 6.5%.

“We are very pleased with our holiday sales and margin performance. Footwear, women’s and cosmetics categories were especially strong. Our customers responded well to our holiday assortment, marketing, promotions and strategic initiatives in store and in our direct-to-consumer business, “ said Michael Glazer, President and CEO at Stage Stores, Inc.

Source: Retailing Today

January 9, 2015

Retail industry employment increased by 2,000 jobs in December as healthy hiring gains in general merchandise and sporting goods stores were offset by declines in clothing and furniture stores, the National Retail Federation said today.  Retail employment for 2014 climbed by 176,000 jobs over the year before, according to NRF’s calculations, which do not include automobile dealerships, gasoline stations or restaurants.

“Once again, today’s jobs report was very strong and shows that the labor market is maturing and the economy is performing soundly,” NRF Chief Economist Jack Kleinhenz said.  “It is the largest annual increase in overall employment since 1999.  While retail employment witnessed large swings in December, it was wholly consistent with seasonal patterns.”

“However, data on average hourly earnings was very disappointing,” Kleinhenz said.  “While the labor market has recovered from recessionary lows, it’s still not strong enough to generate or pressure wage increases.”

“While labor slack is diminishing, the recent and notable drop in energy prices combined with anemic wage growth may provide the Federal Reserve more leeway to lift short-term interest rates,” Kleinhenz said.  “We continue to expect further revisions into the New Year.”

Source: National Retail Federation

January 12, 2015

The Conference Board Employment Trends Index (ETI) increased in December.  The index now stands at 128.43, up from 127.83 in November.  This represents a 7.5 percent gain in the ETI compared to a year ago.

“The Employment Trends Index increased in every single month of 2014, capping the year off with strong growth, 2.3 percent, in the final quarter,” said Gad Levanon, Managing Director of Macroeconomic and Labor Market Research at The Conference Board.  “The strengthening in the ETI suggests that rapid job growth is likely to continue throughout the first half of 2015.  And as the labor market tightens further, acceleration in wage growth is soon to follow.”

December’s increase in the ETI was driven by positive contributions from six of the eight components.  In order from the largest positive contributor to the smallest, these were: Percentage of Respondents Who Say They Find “Jobs Hard to Get”, Initial Claims for Unemployment Insurance, Industrial Production, Percentage of Firms with Positions Not Able to Fill Right Now, Number of Temporary Employees, and Real Manufacturing and Trade Sales.

The Employment Trends Index aggregates eight labor-market indicators, each of which has proven accurate in its own area.  Aggregating individual indicators into a composite index filters out “noise” to show underlying trends more clearly.

• Percentage of Respondents Who Say They Find “Jobs Hard to Get” (The Conference Board Consumer Confidence Survey)
• Initial Claims for Unemployment Insurance (U.S. Department of Labor)
• Number of Employees Hired by the Temporary-Help Industry (U.S. Bureau of Labor Statistics)
• Ratio of Involuntarily Part-time to All Part-time Workers (BLS)
• Job Openings (BLS)
• Industrial Production (Federal Reserve Board)
• Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis)
• Statistical imputation for the recent month
• Statistical imputation for two recent months

Source: The Conference Board

January 8, 2015

Costco showed again in December why it’s the cream of the crop among warehouse club stores.

The Washington based retailer reported an increase of 8% in same store sales in the United States, excluding gasoline sales and foreign exchange.  Same-store sales at international stores rose by 1%.

Net sales for the retailer rose 5% to $12.2 billion in December from $11.53 billion a year earlier.

For the 18 weeks ended January 4, sales at stores open at least a year rose 4%.  They climbed 6% in the United States, but were flat overseas.  Total revenue for the 18-week period climbed 7 percent to $40.85 billion.

Costco Wholesale Corp., based in Issaquah, Washington, runs 671 warehouses, including 474 in the U.S. and Puerto Rico, 88 in Canada, 34 in Mexico, 26 in the U.K., 20 in Japan, 11 in Korea, 10 in Taiwan, seven in Australia and one in Spain.

Source: Retailing Today

January 9, 2015

The economy generated 252,000 new jobs in December, and the gains for November and October were revised up.  These strong gains are likely to continue to boost consumer spending in 2015.  The continued drop in the unemployment rate, to 5.6 percent in December, puts us within striking distance of the natural rate of 5.5 percent.  All the more reason to expect that the Fed will start raising rates in the first half of 2015.  In such an environment we should expect to see acceleration in wage growth, but there is no evidence of that, yet, in the establishment survey.

Source: The Conference Board

Macy’s reported a 2.7% year over year increase in sales for November and December. This was in line with their projected 2-3% sales increase prediction.  “We feel very good about our performance in the November/December period as we reversed trend from a soft third quarter and set the stage for continued progress going forward,” Terry J. Lundgren, Macy’s chairman and CEO, said.

That continued progress includes the announcement of major changes at Macy’s for 2015. These changes include a restructuring of merchandising and marketing functions at both Macy’s and Bloomingdale’s, focusing on the company’s omnichannel approach as well as a series of adjustments to its field and store operations to increase productivity and efficiency that include closing 14 of its 790 stores and some related layoffs. Macy’s also announced opening two new locations and reconfirmed plans for seven others.

The company will change its merchandising-related functions in local districts to improve the ability to localize assortments by size, color, fabric weight, style, fit, category and brand. Among the changes, the company is eliminating positions known as “district planners” and reinvesting in new regional teams devoted to specific themes of merchandise localization. Plans call for these teams to intensify Macy’s warm-weather strategies, as well as address topics such as meeting the needs of more traditional customers who live in northern climate zones, and better understand and support the diverse needs of multicultural customers. Macy’s contends its field team will continue to represent a significant competitive advantage in reacting quickly to changes in customer demand.

Macy’s will expand its existing fulfillment center network in Arizona, California, Connecticut, Tennessee and West Virginia with a new 1.3 million square foot fulfillment center opening this year in Tulsa.

“Going forward, Macy’s and Bloomingdale’s will be better able to move more quickly and nimbly to select merchandise, assort inventories and serve total customer demand, no matter how, when or where the customer shops,” Lundgren said. “Some redundant activity also can be avoided to accelerate speed to market, partner more effectively with vendor resources and ensure the merchandising organizations are more responsive to the marketplace in making and implementing decisions.”

Source: Retailing Today

Holiday online sales in 2014 exceeded an already optimistic forecast. Total desktop online sales for November through December grew 15% to $53.3 billion, $2 billion of that total coming from Cyber Monday, making 2014 the 5^th consecutive year this day had the highest amount of spending.

The day after Cyber Monday came in second with $1.7 billion. Over the entire season, 15 days exceeded $1 billion in online desktop spending. In 2013 only 10 days exceeded $1 billion during the same period.

“Despite a shortened holiday calendar between Thanksgiving and Christmas and erroneous reports of flagging holiday sales, the American consumer proved resilient and flexed their spending muscle online this year, “ quoted comScore chairman emeritus Gian Fulgoni. “In the end, we saw growth rates in the mid-double digits as the online channel continued to gain meaningful share from brick-and-mortar.”

Source: Retailing Today

January 5, 2015

Rite Aid Corp. says sales at stores open at least a year grew 5.3% in December, boosted again by strengthening pharmacy sales.

Same-store sales at the Camp Hill, Pennsylvania-based retailer grew 5.3% to $2.2 billion, beating analyst consensus of 4.5% and reflecting a 1.7% increase in front-end same-store sales and a 7.3% increase in pharmacy same-store sales.

“The front-end comp of 1.7% outpaced consensus of 1.2% and represents the strongest two-year trend since last January,” noted Ed Kelly, Credit Suisse research analyst.  “Flu-related OTC helped and Wellness remodels are likely a tailwind impact could ramp over time as a higher proportion of the store base is remodeled.  The pharmacy comp beat as wellk, as sales rose 7.3% vs. consensus of 6.3%, although generic impact markedly decelerated sequentially due to the lapping of Cymbalta.”

Prescription count at comparable stores increased 5.1% over the prior year period.  Prescription sales accounted for 64.8% of drug store sales, and third party prescription sales represented 97.6% of pharmacy sales.

Same-store sales for the 43 week period ended December 27, 2014 increased 4.3% over the prior-year period.  Front-end same-store sales increased 1% while pharmacy same-store sales increased 5.9%.  Prescription count at comparable stores increased 3.6% over the prior-year period.

Total drug store sales for the 43 week period increased 3.9% with sales of $21.8 billion.  Prescription sales represented 68.6% of total drug store sales, and third party prescription sales represented 97.5% of pharmacy sales.

Source: Retailing Today 

January 2, 2015

Economic activity in the manufacturing sector expanded in December for the 19th consecutive month, and the overall economy grew for the 67th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business.

The report was issued by Bradley J. Holcomb, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee.  “The December PMI registered 55.5 percent, a decrease of 3.2 percentage points from November’s reading of 58.7 percent.  The New Orders Index registered 57.3 percent, a decrease of 8.7 percentage points from the reading of 66 percent in November.  The Production Index registered 58.8 percent, 5.6 percentage points below the November reading of 64.4 percent.  The Employment Index registered 56.8 percent, an increase of 1.9 percentage points from the November reading of 51.5 percent.  The Prices Index registered 38.5 percent, down 6 percentage points from the November reading of 44.5 percent, indicating lower raw materials prices in December relative to November.  Comments mention the negative impact on imported materials shipment due to the West Coast dock slowdown.”

Manufacturing expanded in December as the PMI registered 55.5 percent, a decrease of 3.2 percentage points when compared to November’s reading of 58.7 percent, indicating growth in manufacturing for the 19th consecutive month.  A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI in excess of 43.2 percent, over a period of time, generally indicates an expansion of the overall economy.  Therefore, the December PMI indicates growth for the 67th consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the 19th consecutive month.  Holcomb stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through December (55.8 percent) corresponds to a 4.2 percent increase in real gross domestic product (GDP) on an annualized basis.  In addition, if the PMI for December (55.5 percent) is annualized, it corresponds to a 4.1 percent increase in real GDP annually.”

Of the 18 manufacturing industries, 11 are reporting growth in December.

Source: Institute for Supply Management

Although analysts had projected retail growth in December to average 2.7%, J.C. Penney reports that sales rose 3.7% for the last 9 weeks leading up to the end of December. That compares to 3.1% growth for the same time period last year.

Last year at this time, Penney did not disclose sales results, which drove the stock down and raised investors’ concerns about the company’s turnaround efforts after failed changes in sales strategy. This included removing discounts and popular house brands.

“Our highest priority over the last year has been to restore profitable sales growth at J.C. Penney,” Chief Executive Myron E. Ullman said. “This holiday season was instrumental in that effort.”

The National Retail Federation (NRF) projects this holiday season to boast the strongest sales growth since 2011. J.C. Penney is the first large retailer to report holiday season sales.