Author: Helen Thomas

October 27, 2014

Home improvement in New York is in for a new look in 2015 when Lowe’s opens two tiny stores in Manhattan.

Lowe’s is coming to Manhattan to bring homeowners, renters and professional customers the products and services they need to maintain and improve their homes and businesses, the company said.  Its two stores are slated to open in the second half of 2015 at 2008 Broadway at West 68th Street and 635 6th Avenue at West 19th Street.

“We are excited to expand our presence to Manhattan and we look forward to offering Lowe’s project expertise and tailored product selection in two convenient locations,” said Richard Maltsbarger, Lowe’s chief development officer.  “We know customers in Manhattan are already shopping with Lowe’s online and at our New York area stores.  Based on our research, we are developing these locations to meet the unique needs of these customers.”

Both stores will be approximately 30,000 sq. ft. and offer products and services that are locally relevant to customers, including appliances in a variety of sizes, home organization and storage products to maximize space, and inspiring home decor and accessories to refresh living areas.  Most items will be in-stock and many will be delivered from Lowe’s New York area stores.

Lowe’s operates roughly 1,835 stores in the U.S., Canada and Mexico and most are larger than 100,000 sq. ft.

Source: Retailing Today

October 30, 2014

The U.S. Bureau of Economic Analysis today reported 3.5 percent annualized growth in real Gross Domestic Product for the third quarter of 2014, which is above expectations because of strong contributions from net exports and government spending on national defense.

The growth in household consumption was disappointing, and business investment grew only moderately.  Despite extremely low interest rates, residential investment continues to grow unusually slowly, partly a result of very weak household formation.

Moving forward, we expect the U.S. economy to grow at about a 2.5 percent rate on average in the coming quarters.  If moderate growth and therefore the current pace of job creation are sustained, we could even see some pickup next year in wage growth, and a first Fed hike by mid-2015.

Source: The Conference Board

October 22, 2014

Family Dollar Stores on Tuesday announced that it has certified substantial compliance with both the Federal Trade Commission’s second request regarding the acquisition by Dollar Tree, as well as the second request regarding Dollar General’s bid for the company.

Dollar Tree is expected to certify substantial compliance by November 7, the company stated, however Family Dollar has no insight as to when Dollar General will comply with the FTC’s second request.  Family Dollar continues to believe, based on its discussions with the FTC staff, that the FTC review of the Dollar General tender offer will continue well into 2015, the company stated.

Once all parties have certified that they have substantially complied with FTC’s second request, the Commission has 30 additional days to complete its review of the transaction and to take action if necessary.

Family Dollar is committed to cooperating with the FTC’s investigations of both transactions, and providing all of the necessary information from Family Dollar for the FTC to advance its review of both potential transactions as promplty as practicable.

Source: Retailing Today

October 28, 2014

The Conference Board Consumer Confidence Index, which had decreased in September, rebounded in October.  The Index now stands at 94.5, up from 89.0 in September.  The Present Situation Index edged up from 93.0 to 93.7, while the Expectations Index increased sharply to 95.0 from 86.4 in September.

Says Lynn Franco, Director of Economic Indicators at The Conference Board: “Consumer confidence, which had declined in September, rebounded in October.  A more favorable assessment of the current job market and business conditions contributed to the improvement in consumers’ view of the present situation.  Looking ahead, consumers have regained confidence in the short-term outlook for the economy and labor market, and are more optimistic about their future earnings potential.  With the holiday season around the corner, this boost in confidence should be a welcome sign for retailers.”

Consumers’ appraisal of current conditions was moderately more favorable in October than in September.  Their view of business conditions was mixed; while the proportion saying conditions are “good” inched up from 24.2 percent to 24.5 percent, those claiming business conditions are “bad” also increased slightly, from 21.2 percent to 21.7 percent.  Consumers’ assessment of the job market improved moderately, with the proportion stating jobs are “plentiful” increasing marginally from 16.3 percent to 16.5 percent, and those claiming jobs are “hard to get” declining slightly from 29.4 percent to 29.1 percent.

Consumers’ optimism, which had declined considerably in September, improved in October.  The percentage of consumers expecting business conditions to improve over the next six months increased from 19.0 percent to 19.6 percent, while those anticipating fewer jobs fell from 16.9 percent to 13.9 percent.  The proportion of consumers expecting growth in their incomes rose from 16.9 percent in September to 17.7 percent in October, while the proportion expecting a drop in income fell from 13.4 percent to 11.6 percent.

Source: The Conference Board

October 24, 2014

Sales of newly built, single-family homes inched up 0.2 percent in September to a seasonally adjusted annual rate of 467,000 units, the highest level in six years, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.  Sales numbers for August were revised down from 504,000 to 466,000.

“Three consecutive months of sales upticks demonstrate steady growth in the housing market,” said Kevin Kelly, chairman of the National Association of Home Builders and a home builder and developer from Wilmington, Delaware.  “Consistent job creation and low mortgage interest rates are spurring the release of pent-up consumer demand.”

“The August revision was not unexpected, as this figure seemed out of line with the modest housing recovery we have been seeing,” said NAHB Chief Economist David Crowe.  “The continuing increase in the inventory of new homes points to builders’ confidence in the market.”

The inventory of new homes for sale increased to 207,000 in September, which is a 5.3 month supply at the current sales pace.

Regionally, new home sales rose 12.3 percent in the Midwest and 2 percent in the South.  Sales were unchanged in the Northeast and dropped 8.9 percent in the West.

Source: National Association of Home Builders

October 23, 2014

The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.8 percent in September to 104.4, following no change in August, and a 1.1 percent increase in July.

“The LEI picked up in September, after no change in August, and the strengths among its components have been very widespread over the past six months,” said Ataman Ozyildirim, Economist at The Conference Board.  “The outlook for improving employment and further income growth are expected to support the moderate expansion in the U.S. economy for the remainder of the year.”

“The financial markets are reflecting turmoil and unease, but the data on the leading indicators continue to suggest moderate growth in the short-term,” said Ken Goldstein, Economist at The Conference Board.  “Meanwhile, the weak advances in the housing market remain a bigger risk to the outlook than short-term financial gyrations.”

The Conference Board Coincident Economic Index (CEI) for the U.S. increased 0.4 percent in September to 110.2, following a 0.1 percent increase in August, and a 0.3 percent increase in July.

The Conference Board Lagging Economic Index (LAG) for the U.S. increased 0.1 percent in September to 125.1, following a 0.3 percent increase in August, and a 0.2 percent increase in July.

Source: The Conference Board

October 23, 2014

The National Association of Home Builders (NAHB) Remodeling Market Index (RMI) reclaimed the high-water mark of 57 in the third quarter of 2014.  This is the sixth consecutive quarter for an RMI reading above 50.

An RMI above 50 indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it is lower.  The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity.

“Most remodelers remain confident that the market is improving as home owners undertake renovations, large and small,” said NAHB Remodelers Chair Paul Sullivan, CAPS, CGR, CGP, of Waterville Valley, N.H.  “The consistency and longevity of positive RMI readings are in line with the gradual recovery of the housing industry.”

The RMI’s future market conditions index rose to 58 from 56 in the previous quarter.  All four of its subcomponents – calls for bids, amount of work committed for the next three months, backlog of jobs and appointments for proposals – increased or remained level with the previous quarter’s reading.

The current market conditions component of the RMI increased one point to 57 this quarter.  A two point gain was made among the categories of large additions as well as smaller remodeling jobs with readings of 56 and 58, respectively.

“The stabilization of the RMI in the mid-50s for more than a year demonstrates the slow, steady recovery of the housing industry that we expect to continue,” said NAHB Chief Economist David Crowe.  “The major headwind to a stronger recovery is a shortage of qualified labor and subcontractors in some parts of the country, making it difficult for remodelers to employ carpenters and finish projects as quickly and economically as many of their customers expect.”

Source: National Association of Home Builders

October 13, 2014

Home Depot EVP Marvin Ellison will become president of J.C. Penney on November 1 and succeed Mike Ullman as CEO of the department store retailer next August.

Ellison, 49, is an interesting choice for a retailer focused on apparel and accessories given his extensive background in operations as opposed to merchandising.  He spent the past 12 years at Home Depot and most recently served as EVP of stores since 2008.  Prior to his current role he served as president of Home Depot’s northern division and also held the role of SVP of global logistics.  Before Home Depot, Ellison spent 15 years in a variety of operational roles at Target including corporate director of asset protection.  Ellison serves on the board of FedEx and earned a business administration degree in marketing from the University of Memphis and an MBA from Emory University.

Plans call for Ellison to replace Ullman as CEO on August 1, 2015 at which time Ullman will become executive chairman of the board for a one year period.

“The Board has completed its search for the right CEO to lead the next stage of J.C. Penney’s growth.  We are delighted to have found that person in Marvin Ellison, a highly accomplished retail executive with a history of delivering top and bottom line results at major American retailers,” said J.C. Penney chairman Thomas Engibous.  “He brings to the role, among other assets, an extensive knowledge of store operations and supply chain management as well as a demonstrated ability to successfully run large retail organizations.  In light of these attributes, we believe he is well equipped to return the company to profitable growth.”

Engibous also spoke highly of Ullman’s contributions, noting that he agreed to return to the company during the most difficult period in its history.  Ullman is credited with stabilizing the business and improving performance after the company attempted an ill-fated transformation under the leadership of prior CEO Ron Johnson.

“(Marvin Ellison’s) experience and leadership are exactly what we need to accelerate the progress we have made over the last 18 months,” Ullman said.  I look forward to working closely with him and the rest of our outstanding team in the coming months to ensure a smooth transition and a successful future for J.C. Penney.”

Ellison added, “as president and, ultimately, CEO, I will be focused on positioning the company to compete in a rapidly changing retail environment for the benefit of our customers, shareholders, suppliers and associates.  I am confident that we have the customer proposition, the brand, and the talent to make J.C. Penney successful over the long term.”

Source: Retailing Today

October 16, 2014

Supervalu president and CEO Sam Duncan is encouraged with the progress the retailer is making and why not.  Identical store sales in the company’s Save-A-Lot units were up 6.5% in the second quarter.

The company’s total sales for the period ended September 6, increased 1.8% to $4.02 billion while profits declined to $31 million, or 11 cents a share, from $40 million, or 15 cents a share.  When adjusted for some non-recurring items, second quarter earnings were $34 million, or 13 cents a share.

“Midway through fiscal 2015, I am encouraged with the progress we have made across the business,” said president and CEO Sam Duncan.  “The investments we have made at Save-A-Lot continue to drive sales and our retail food stores recorded their third consecutive quarter of positive identical store sales.  The addition of the Rainbow stores this past quarter is a positive for our independent business and we are encouraged by the early results.”

Identical store sales in the Save-A-Lot Network increased 6.5% while identical store sales in the company’s retail food segment increased 0.4%.

In Supervalu’s largest segment, the independent business unit, sales were down slightly to $1.82 billion from $1.84 billion primarily due to lost accounts.  The company said it lost one new Albertson’s banner that completed the transition to self-distribution, a larger lost customer and lower military sales, partially offset by new business including increased sales to existing customers.

Second quarter Save-A-Lot net sales increased 8% to $1.05 billion, but operating profits fell to $26 million from $32 million the prior year due to investments in price.

Source: Retailing Today

October 16, 2014

Even if Dollar General doesn’t prevail in its efforts to acquire Family Dollar, the company’s expanding distribution infrastructure is positioned to support future growth.

Dollar General said it plans to build the 13th distribution center in its nationwide network in San Antonio.  The facility will measure more than 900,000 sq. ft., employ roughly 530 people and serve more than 1,000 stores when it opens in October 2015, the company said.

“This distribution center is another important investment in the growth of Dollar General and our substantial presence in Texas where we have nearly 1,200 stores and more than 9,400 employees,” said Rick Dreiling, chairman and CEO of Dollar General.  “We operate more stores in the Lone Star state than in any other state and we have found Texas is a great place to do business.  We are proud to continue investing in the economic growth of Texas and we look forward to bringing an additional 530 jobs to Bexar County.”

Dollar General’s 12 other distribution centers are located in Alabama, California, Florida, Indiana, Kentucky, Mississippi, Missouri, Ohio, Oklahoma, Pennsylvania, South Carolina and Virginia.  Those facilities served the company’s more than 11,500 stores nationwide.

Source: Retailing Today