Author: Helen Thomas

Worries over jobs, the economy and fiscal policy uncertainty have left consumers spending cautiously, prioritizing long-term goals and improvement projects, according to the Chase Freedom Lifestyle index report released on October 30.

Spending on home improvement and self-improvement saw year-over-year spending increases in Q3, while consumer electronics and office supplies saw the biggest declines in spending.  Home improvement spending rose 4%.  The housing recovery and increase in home values likely prompted consumers to increase their spending on remodeling and other improvements to their dwellings.

Craft stores saw the biggest surge in spending during the quarter with a 91% increase, a sign of “continued strength of do-it-yourselfers who may be buying a home or remodeling their current residence.”  That is good news for home improvement retailers such as Home Depot and Lowe’s, and hardwood flooring retailer Lumber Liquidators, which likely got their fair share of spending during the quarter.

Deep discounters such as Dollar Tree, Dollar General and Five Below, as well as Walmart and Target, which sell materials for arts and crafts, aldo tapped into some of that home improvement spending.

The index also shows that consumers are committed to self-improvement resolutions made earlier in the year, reflected in year-over-year spending increases on books at 6% and sporting goods at 5%.  Book sellers Barnes & Noble and Amazon.com likely captured some of those dollars.  Sporting good retailers such as Dick’s Sporting Goods and athletic apparel outfits like Nike, Under Armour and Lululemon probably also benefitted from that spending.

Office supply and consumer electronics spending slipped 7% vs. a year earlier.  That is not good news for retailers like Staples and Best Buy – which is in the midst of a turnaround.  However, the report notes that the decline in spending on consumer electronics might be “a sign of calm before the holiday spending storm.”

The Chase Freedom Lifestyle index is a quarterly barometer of consumer trends based on aggregated Chase Freedon cardholder spending.  Chase is the retail banking business of JP Morgan Chase.

Source:  Investor’s Business Daily>>

Publix Reports Third Quarter 2013 Results and Stock Price

LAKELAND, Fla., Nov. 1, 2013 — Publix’s sales for the third quarter of 2013 were $7 billion, a 5.6 percent increase from last year’s $6.7 billion. Comparable-store sales for the third quarter of 2013 increased 4.1 percent.

Net earnings for the third quarter of 2013 were $359.9 million, compared to $368.4 million in 2012, a decrease of 2.3 percent. Earnings per share for the third quarter decreased to $0.46 for 2013, down from $0.47 per share in 2012.

Publix’s sales for the first nine months of 2013 were $21.6 billion, a 5.2 percent increase from last year’s $20.5 billion. Comparable-store sales for the first nine months of 2013 increased 3.4 percent.

Net earnings for the first nine months of 2013 were $1.23 billion, compared to $1.16 billion in 2012, an increase of 6.3 percent. Earnings per share increased to $1.58 for the first nine months of 2013, up from $1.48 per share in 2012.

These amounts are based on unaudited reports that will be filed next week with the U.S. Securities and Exchange Commission (SEC). The company’s quarterly report to the SEC, Form 10-Q, will be available Nov. 7 on its website at www.publix.com/stock.

Effective Nov. 1, 2013, Publix’s stock price increased from $27.55 per share to $30.00 per share. Publix stock is not publicly traded and is made available for sale only to current Publix associates and members of its board of directors.

“I’m very pleased we had another significant increase in our stock price, resulting in a 33 percent increase in our stock price over the last year,” said CEO Ed Crenshaw. “Our associates continue to deliver premier customer service, the key to our success.” 

Retail sales fell in September for the first time in six months, but the decline was credited to a drop-off in auto purchases.  Most U.S. retail sectors actually experienced broad sales gains during the month, according to the National Retail Federation, which reported that, excluding automobiles, gas stations and restaurants, retail sales grew a seasonally 0.6% compared to the previous month and 3.8% unadjusted compared to the prior year.

Results of specific sectors include:

• Building material and garden equipment and supplies dealers stores’ sales increased 0.1% seasonally adjusted and 8.0% unadjusted year-over-year.
• Clothing and clothing accessories stores’ sales decreased 0.5% seasonally adjusted month-to-month yet increased 0.7% year-over-year.
• Electronics and appliance stores’ sales increased 0.7% seasonally-adjusted month-to-month and 1.8% unadjusted year-over-year.
• Furniture and home furnishing stores’ sales increased 0.2% seasonally-adjusted month-to-month and 4.1% unadjusted year-over year.
• General merchandise stores’ sales increased 0.4% seasonally adjusted month-to-month yet decreased 0.2% unadjusted year-over-year.
• Health and personal care stores’ sales increased 0.4% seasonally adjusted month-to-month and 4.6% unadjusted year-over-year.
• Sporting goods, hobby, book and music stores’ sales increased 0.5% seasonally adjusted month-to-month and 0.9% unadjusted year-over-year.
• Non-store retailers’ sales increased 0.4% seasonally adjusted month-to-month and 12.0% unadjusted year-over-year.

“Falling gas prices combined with rising housing and stock prices continue to support consumer spending, and the broader economy,” NRF chief economist Jack Kleinhenz said.  “While far from robust, consumers are shopping, but they are spending both discriminately and moderately.  Volatility still persists in various retail sectors but spending has somewhat stabilized heading into the all-important holiday shopping season.”

September retail sales, released today by the U.S. Census Bureau, showed that total retail and food services sales, which include non-general merchandise categories such as automobiles, gasoline stations, and restaurants, decreased 0.1% seasonally adjusted month-to-month yet increased 3.2% adjusted year-over-year.

Source: www.retailingtoday.com, Dan Berthiaume 

Total nonfarm payroll employment rose by 148,000 in September, and the unemployment rate was little changed at 7.2 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in construction, wholesale trade, and transportation and warehousing.

Both the civilian labor force participation rate, at 63.2 percent, and the employment- population ratio at 58.6 percent, were unchanged in September. Over the year, the labor force participation rate has declined by 0.4 percentage point, while the employment- population ratio has changed little.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was unchanged at 7.9 million in September. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

Source: Bureau of Labor Statistics

Shoppers in the United States plan on spending an average of $646 on gifts this holiday season, representing an 11% increase over the $582 they planned to spend, on average, in 2012, according to Accenture’s annual holiday shopping survey. The forecast uptick is more optimistic than other holiday surveys released to date.

“The average dollar spend is trending up, and we are seeing a consumer mindset shifting from ‘cautious’ to ‘sensible,’ which is good news for retailers,” said Chris Donnelly, global managing director of Accenture’s Retail practice. “However, retailers are mindful that during the 2013 Thanksgiving-Christmas shopping period, they will have six days less in which to tempt shoppers through their doors, so many will go big and go early.”

read the rest of the Retailing Today article

Deloitte’s holiday sales forecast points to further signs that the economy is recovering. Holiday sales are expected to climb to between $963 and $967 billion, representing a 4% to 4.5% increase in November through January holiday sales (excluding motor vehicles and gasoline) this year from last year’s season. 

The growth rate is on par with last year’s 4.5% gain. In addition, Deloitte forecasts a 12.5 to 13% increase in non-store sales. Nearly three-quarters of non-store sales result from the online channel with additional sales coming from catalogs and interactive TV.

Deloitte also anticipates that mobile-influenced retail store sales will account for 8%, or $66 billion, in retail store sales this holiday season, driven by consumers’ store-related smartphone activity such as product research, price comparison or mobile application use.

“We anticipate non-store sales growth will continue to surpass overall retail sales growth,” said Alison Paul, vice chairman, Deloitte LLP and Retail & Distribution sector leader. “In addition, shoppers researching their purchases electronically, via their PC, tablet or mobile phone, are increasingly influencing in-store sales, particularly as we see greater integration across retailers’ store, online and mobile channels. More retailers are offering services such as ‘buy online and pick up in store,’ as well as inventory from other locations and price matching on the spot. The store is still a core element of holiday shopping, and retailers leading the way this season will be those that effectively bring together their pricing, promotions, merchandise and inventory management across both their physical and digital storefronts.”

source: www.retailingtoday.com, Dan Berthiaume 

Canadian retailer Hudson’s Bay, parent company to Lord & Taylor stores, has agreed to purchase Saks Fifth Avenue, based in New York City. The buyout is expected to close by year end.

The combination of these three brands will make the company one of the largest luxury brand retailers in North America, with over 320 stores.

During a conference call with investors, Hudson’s Bay Co. Chairman and CEO Richard Baker said the goal is to bring Saks luxury brand into Canada. The company plans to open up seven Saks Fifth Avenue stores and 25 Off Fifth outlet stores to Canada.  “With the addition of Saks, (Hudson’s Bay) will offer consumers an unprecedented range of retailing categories and shopping experiences,” Baker said.

Global luxury sales, including higher-end jewelry and clothes, rose an estimated 10 percent to $281.96 billion last year, according to the latest study from Bain & Co. In North America, luxury sales were up an estimated 12 percent to $81.33 billion.

Bradenton, FL June 12, 2013—Accelerated Analytics®, a leading provider of retail point of sale reporting, announced today it has acquired afterBOT’s retail POS reporting business.  The acquisition further expands the market leadership of Accelerated Analytics as the go to provider for retail point of sale reporting solutions. 

“The acquisition of the afterBOT point of sale reporting business is a key strategic step in our growth strategy for Accelerated Analytics.  We are looking forward to servicing the existing afterBOT customer base, and bringing new capabilities to our existing customers.” said Chad Symens, President and CEO of Accelerated Analytics.

As part of the Accelerated Analytics family afterBOT customers will now have opportunities to expand their retail point of sale reporting through:

• Multi-retailer reporting.  Accelerated Analytics provides reporting for over 100 retailers.  Customers will now have the opportunity to access POS reporting for all their retail customers in a single set of reports.  
• Expanded reporting tools and capabilities including the ability to customize reports and add other non-POS data like shipping. 
• Mobile access to reports on the iPad and iPhone.

As part of the agreement afterBOT has licensed IP to Accelerated Analytics for servicing the current customers which can also be considered for new opportunities in the future. 

MOORESVILLE, N.C., Jun 17, 2013 (BUSINESS WIRE) — Lowe’s Companies, Inc. LOW +0.51%  , the world’s second largest home improvement retailer, today announced it has entered into an asset purchase agreement with Orchard Supply Hardware, under which Lowe’s will acquire the majority of Orchard’s assets for approximately $205 million in cash, plus the assumption of payables owed to nearly all of Orchard’s supplier partners. Upon completion of the transaction, the acquisition will enable Lowe’s to expand through a new store format and reach a new customer base in California with the addition of Orchard’s smaller-format metro store locations. Lowe’s plans to have Orchard operate as a separate, standalone business, retaining its brand under the leadership of Orchard’s current management team.

Based in San Jose, California and with fiscal 2012 annual revenue of $657 million, Orchard currently operates 91 neighborhood hardware and garden stores primarily located in densely populated markets in California. Under the terms of the transaction, Lowe’s would acquire at least 60 of these stores based upon further due diligence on the locations. On average, the Orchard stores, which offer a product selection focused on paint, repair and backyard categories, include approximately 36,000 square feet of selling space, compared to 113,000 square feet of selling space for an average Lowe’s home improvement store. Lowe’s currently operates 110 stores in California.

The transaction is expected to be consummated through a court-supervised process under Section 363 of the U.S. Bankruptcy Code and is subject to an auction and Bankruptcy Court approval. The agreement with Lowe’s will serve as the “stalking-horse bid” in the auction process. Earlier today, Orchard filed a petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.

Robert A. Niblock, Chairman, President and CEO of Lowe’s, said, “Orchard’s neighborhood stores are a natural complement to Lowe’s strengths in big-box retail, offering smaller-format hardware and garden stores catering to the needs of local customers. Strategically, the acquisition will provide us with immediate access to Orchard’s high density, prime locations in attractive markets in California, where Lowe’s is currently underpenetrated, and will enable us to participate more fully in California’s economic recovery.

“Overall, Orchard’s business model offers great potential but it has been burdened with a high level of debt. With the debt addressed through the Chapter 11 process and appropriate support from Lowe’s, we believe that Orchard will be positioned for profitable growth as a standalone business within our portfolio,” added Mr. Niblock.

Subject to the auction process, Court approval and customary regulatory review, the parties anticipate the transaction will close in approximately 90 days. Under the terms of the agreement, Lowe’s would receive a break-up fee of 3 percent of the purchase price should it not be successful in acquiring the Orchard assets. In addition, subject to Court approval, for an alternative bidder to be successful, it must outbid Lowe’s by a minimum of $12.0 million, representing $5 million in addition to the break-up fee and an expense reimbursement of $850,000.

Goldman Sachs is acting as financial advisor to Lowe’s, while Hunton & Williams LLP is acting as legal advisor.

With fiscal year 2012 sales of $50.5 billion, Lowe’s Companies, Inc. is a FORTUNE(R) 100 company that serves approximately 15 million customers a week at more than 1,750 home improvement stores in the United States, Canada and Mexico. Founded in 1946 and based in Mooresville, N.C., Lowe’s is the second-largest home improvement retailer in the world. For more information, visit Lowes.com.

JC Penney has launched a new home goods strategy that includes expansive home goods boutiques at 500 of their 1,100 stores.  CEO Ron Johnson calls the strategy “pivotal” to his efforts to revive Penney.

For seven years, home goods have been Penney’s worst performing category. The home category accounted for only 12 percent of sales in 2012, compared to 21 percent in 2006.

Penney’s neglected the home goods area to focus on improving its fashion collection, leaving consumers to choose from uninspired, deeply discounted goods. Penney’s new home goods section will be anchored by top designers, such as Jonathan Adler, Michael Graves, Sir Terence Conran and Martha Stewart.

The new home area will occupy up to 19,000 square feet of space, more than twice the size of a Williams-Sonoma store. Their desire is to bring in younger shoppers with attractive brands. They will also organize products by category at a variety of prices, and hold sales events and offer discounts.

Penney’s spokesperson Ellen Degeneres highlighted the JC Penney home goods boutiques on her show Thursday, May 30, by treating a family in need from Georgia to a shopping spree that replaced everything in their house from furniture to window treatments, bedding, dishes and accessories. They showed the boutique in an on-site store visit. The family was also awarded $15,000 from JC Penney to help them with expenses. Ellen’s show also gave each audience member a $100 gift card to spend at a JC Penney.