Author: Chad Symens

Nordstrom announced Thursday total net sales increased 9%, with comparable sales of $3.6 billion increasing 4.9 % over Q2 2014. Comparable sales increases by channel were: US stores up 0.8%, Nordstrom.com up 20%.

Top performing merchandise categories were cosmetics and women’s apparel. Top performing regions were the Southwest and Southeast.

Ending inventory increased 11% over Q2 2014, and was consistent with expectations and projected growth initiatives.

The company opened 350,000 new Nordstrom Rewards accounts, growing to 4.5 million members. Sales from members increased 10% in the second quarter and represented 44% of total sales.

Official remarks from Blake Nordstrom, Co-President, Nordstrom, Inc., included, “our customer is at the center of our strategy as we focus on creating a differentiated experience in each of our businesses. While we’ve been pursuing distinct strategies to grow each business, we’re also working to link them together to provide our customers with a seamless experience. This is important because we know that when customers engage with us across multiple touch points, their lifetime value and spend increase significantly.”

Source: Nordstrom.com

Macy’s delivered their quarterly earnings today, stating that earnings and revenue fell short of expectations. They also announced a revision in its 2015 sales forecast.

Analysts expected earnings per share of $0.76 and revenue of $6.23 billion. Macy’s earned $0.64 per share, down from $0.80 this quarter last year. Revenue fell to $6.1 billion from $6.27 billion a year ago.

Macy’s shares were down 3.5% following the announcement.

“The consumer didn’t shop in our categories to the degree that we thought the consumer would,” Macy’s Chairman and CEO Terry Lundgren said, citing slowing tourism as a drag on sales. European, Chinese and Brazilian tourists “are not coming to America, and the strength of the dollar is impacting that.”

Macy’s also cut its sales forecast for the year to a 1% decline, compared to previous expectations of 1% growth.

Source: CNBC

Lowe’s used feedback from professional customers to test and launch an improved LowesforPros.com website. Professional customers can make and track purchases of more than a half a million items via computer, tablet or smartphone. Customers can choose to buy online and pick-up in store or have their orders delivered directly to their business or job location.

Lowe’s intent is to make their LowesforPros.com a complete online solution to develop requisition lists, access purchasing reports and create custom catalogs that enable their customers to maintain their brand across multiple buyers and locations. The site also provides customers with purchase approvals and ability to process tax-exempt purchases.

The site also provides industry resources and gives 5% off online purchases with Lowe’s Business Credit.

“LowesForPros.com helps Pros save time, money and run their businesses as efficiently as possible,” said Mike Horn, Lowe’s vice president of ProServices. “Pros have the ability to buy online and pick-up in-store or have orders delivered directly to their business or jobsite while taking advantage of the 5 percent discount every day wherever they choose to shop with us – through their mobile device, tablet or computer. This new website was designed by the Pro, for the Pro.”

Source: Retailing Today

The volume of import cargo for major US retailers is expected to increase 3.6% in August 2015 from August 2014, as retailers prepare to stock for the holiday season. Imports for the year, according to the National Retail Federation, is expected to be up 4.2% from 2014.

Some retailers are paying less to transport their merchandise due to larger capacity ships. Import levels in May were normal, showing a recovery from the port issues in 2014 and the beginning of this year.

“Consumers might be out buying back-to-school supplies but toys and sweaters are starting to show up on the docks,” NRF VP for supply chain and customs policy Jonathan Gold said. “There are still some lingering congestion issues, but retailers are working with their supply chain partners to make sure all of that merchandise flows smoothly to store shelves.”

Source: Chain Store Age

Dropping tourism numbers and consumers saving rather than spending money saved from lower gas prices will affect retailer earnings announcements, say industry analysts.

Several retailers will be making earnings announcements this week: Macy’s on Wednesday, Dillard’s, Kohl’s and Nordstrom on Thursday, and JC Penney on Friday. Analysts report that value retailers with loyalty programs like Kohl’s should report better results than others.

Although retailers saw a weak first two quarters of 2015, analysts are optimistic about the second half of the year looking better. In the apparel and general merchandise category, jewelry is doing well and cosmetics are doing extremely well.

Source: CNBC

US consumer confidence declined 5.3 points in July, dropping to the lowest point since November 2014. The majority of those surveyed, 70.8%, believe the economy is fair or poor, and 41.4% believe it is getting worse. The perception of personal finances remained stagnant, a greater percentage this month felt finances were getting worse. 47.2% report they do not expect added expenses or a shortfall in the next 30 days and 36.8% believe that they will.

Retail spending also decreased in July, down to the lowest level since January. Household improvements still has the largest percentage of adults that say they will spend more this month with 19.8%, but this percentage was 22.9% last month. While spending in household improvements and discretionary spending has gone down, expected spending on clothing, footwear, or accessories, and household expenses has gone up. Change in August is not expected, as 46.8% reported expecting to spend about the same amount next month.

Source: Chain Store Age

US labor costs rose a seasonally adjusted 0.2% in the spring, the slowest pace in three decades. It is the slowest quarterly gain since record keeping began in 1982. Economists were expecting a 0.6% increase. The slow wage growth could affect the Fed’s decision to raise short-term interest rates. Fed officials anticipated an acceleration in wages to signal the labor market is healthy after the recession and could withstand an increase in borrowing costs.

The figures suggest that slack remains in the labor market despite signs that workers’ wages were picking up and a sharp drop in unemployment.

“At this stage of the business cycle, with significant improvement in the labor market, wage growth should be accelerating,” PNC economists Stuart Hoffman and Gus Faucher said in a note to clients. “Weak wage growth is also somewhat puzzling given recent announcements from big companies, such as Wal-Mart and Target, that they are raising workers’ pay.”

Source: The Wall Street Journal

US economic growth in second quarter 2015 saw a 2.3% increase in gross domestic product over first quarter. This gain was boosted by 2.9% growth in consumer spending.  Also, consumer personal savings rate went down to 4/8% from 5.2%, showing that consumers are starting to open their wallets and start spending again. 

Business investment for the period contracted and inventories remained flat. However, consumers and transportation companies are benefitting from lower oil prices. A growth in consumer spending in the third quarter will get more product flowing through supply chains.

Source: Wall Street Journal

Lowe’s Canada is expanding, announcing that in addition to completing the acquisition of 12 former Target stores, they will also open 2 new locations in Ontario. This expansion will increase Lowe’s Canada total store count from 40 to 54.

Lowe’s acquisition of Target’s former stores was for a total purchase price of $113 million. Lowe’s construction plans will be an investment of approximately $38 million. Over 2,000 new jobs will be created. It will have 37 stores in Ontario, 3 in Saskatchewan, 9 in Alberta and 5 in British Columbia. Many of these areas were currently unsaturated by Lowe’s.

“These 14 new locations are a tremendous win for us in Canada, accelerating our growth across the country and bringing our total store count to 54 locations,” said Sylvain Prud’homme, president of Lowe’s Canada. “We continue to receive a positive reaction from our customers on our store experience and this helps us reach additional communities more quickly.”

Source: Chain Store Age

CVS has announced it will be expanding its beauty offerings with three new exclusive collections. CVS will introduce 13 products from Jouviance, a Canadian biotechnology skin care brand, which range from $22 to $69. It will also unveil blemish control and eye treatment products from European-inspired brand Wilma Schumann. Wilma Schumann products range from $18 to $64. Its third new brand will be Promise Organic, featuring skin care, body care and multi-use oil for skin and hair products.

Health and beauty sales grew 25% faster over the past 3 years than the pharmacy’s general merchandise and consumables. CVS plans to bring in 1,200 new products over the next few years, and see its exclusive brands portfolio double by the end of this year.

CVS is shifting its focus to the beauty aisle, planning to update displays to educate customers on skin care products and provide easy navigation through the department. CVS will also offer services from in-store beauty consultants. CVS has partnered with a psychologist to study the role of beauty on overall health.

Source: Retailing Today