Author: Chad Symens

The Home Depot kicks off the Spring season with a variety of omnichannel shopping features. Online shoppers can have purchases sent directly to their home or shipped to their nearest store for pick up. In 2014, 40% of online orders on Homedepot.com were picked up in a local store. Online tools and calculators, such as a Pest Problem Solver and Grass Seed calculator help solve customer problems and assist them in purchasing the right products and the right amounts.

Inside stores, The Home Depot mobile app identifies where products are on the shelves, and offers “expanded aisles” connecting customers to a variety of product options available online.

The Home Depot also has tools in place to help shoppers plan and design their outdoor living space. The Garden Club features tips and expert advice tailored to a customer’s gardening region. The Fencing Project Planner and Decking Project Planner guide additions, upgrades and restorations.

Source: Chain Store Age

The latest Survey of Consumer Expectations from the New York Fed stated that as of March consumers expect their spending will increase by 4.5% over the next year. This is a big change from February findings, when consumers thought spending would be just 3.8%. The February decline is attributed to the poor weather conditions.

Retail sales are expected to show a 1% increase in March, after declines in January and February.

Source: Business Insider

Belk Inc., founded in 1888 by William Henry Belk and in the third generation of Belk family leadership, has hired Goldman Sachs to help it evaluate strategic alternatives, including a potential sale. Belk is the largest family owned department store chain in the US, valued at as much as $4 billion.

In fiscal year 2014, ending January 31, 2015, Belk posted net sales of $4.1 billion, up 1.8% compared to the previous year. After Reuters reported on the potential sale, Belk issued a statement that it had hired Goldman Sachs to help them explore all options and expect to conclude its analysis in the next several months.

US consumer spending has been slow moving this year despite lower gas prices, due to weather conditions and consumers’ desire to save. This has affected department store sales, prompting chains to resort to smaller store models and aggressive discounting.

The last major acquisition in the department store sector was Canadian chain Hudson’s Bay Co, owner of the Lord & Taylor chain, which acquired Saks in 2013 for $2.9 billion. Major department stores like Macy’s and Nordstrom are expected to be contacted by Belk to solicit their interest in a deal. Neither Goldman Sachs, Macy’s nor Nordstrom responded to requests for comment.

Belk operates 297 stores in the southern US and is based in Charlotte, North Carolina.

Source: Reuters.com

Belk, with 297 stores in 16 Southern states, announced several key strategic initiatives for this year, to include increasing their store count, remodeling other stores and improving its e-commerce fulfillment center in Jonesville, S.C.

After reporting a holiday season sales increase of 5.2%, Belk finished its fiscal year on January 31 down 7.8% in net income to $146.1 million versus $158.5 million last year. “Despite challenges early in the year, we ended FY15 with strong holiday sales and are pleased to report our fifth consecutive year of positive comparable store sales,” CEO Tim Belk said. “Although our annual earnings continue to be impacted by additional expense associated with key strategic initiatives, fourth quarter net income rose 8.3 percent on a sales increase of 5%. We are encouraged by the recent trends and believe we are well positioned for the year ahead.”

Net sales totaled $4.11 billion, up 1.8% from $4.04 billion the year before. Same store sales climbed 1.5% and saw the highest growth rate in activewear, ladies contemporary, resort and bridge fashions. Ladies suits, men’s sportswear and juniors.

Source: Retailing Today

The Army and Air Force Exchange Service (AAFES) conducted a workshop in Dallas, detailing the Exchanges’ go to market strategy, with over 50 AAFES representatives and an audience of manufacturers, brokers, distributors and service providers. The goal of the workshop was to simplify the process of selling to AAFES.

AAFES representatives discussed store repositioning strategies and individual category breakouts including hard lines, soft lines, consumables and e-commerce. They also covered legislative and policy issues affecting military resale. The average company can take two to four years to navigate the military resale environment, but a workshop such as this one can help shorten that to a six to twelve month learning curve.

The workshop was led by AAFES Chief Merchandising Officer Ana Middleton.

Resource: Retailing Today

Swarovski is the centerpiece of Las Vegas’ newest retail destination, Grand Bazaar Shops. To keep with the Grand Bazaar theme, Swarovski has opened their first-ever “bartering window”, allowing shoppers to negotiate the price they pay for select items. Most items to be found in the bartering window are limited edition items such as crystallized Beats Headphones and black and pink skulls. Inside the store is a large video screen with scenes from exotic bazaars, alongside specially crafted panels as platforms to display their jewelry and décor.

Outside, the store is designed to look like a cut crystal. Towering above the store is a 14 foot diameter starburst made of 911 custom-cut Swarovski crystals. The tower puts on a three minute light show every night at midnight, choreographed to music.

Source: Chain Store Age

After sinking 0.7% in January, the biggest drop in 6 years, the consumer price index rose 0.2% in February. This is attributed to a rise in gas costs and broad increases in other categories.

Outside of food and energy, the cost of rents, clothes, new and used cars and airfares all also increased 0.2% last month. Even with February’s uptick in prices, economists expect the strong dollar to keep inflation in check in coming months because it makes imported goods cheaper. The dollar has risen sharply in value in the past year compared with the euro and yen, in part because the U.S. economy is growing faster than those in Europe and Japan.

“It is too early to say inflation is turning higher,” said Jennifer Lee, an economist at BMO Capital Markets. The dollar’s strength “takes time to filter through to prices, and the recent increase will show up in coming months.”

The Fed has said in a statement that it might be appropriate for an interest rate increase after further improvement in the labor market, as long as inflation remains at its 2% target.

Source: Austin Statesman

The National Retail Federation released its 2015 Easter Spending Survey, gauging consumer behavior and shopping trends leading to the holiday. The report finds that the average person celebrating Easter will spend $140.62, over 2014’s $137.46 average spend. Total spending is expected to reach $16.4 billion.

“Easter will be the perfect segue into spring for both consumers and retailers who have longed for warmer weather for quite some time,” said NRF President and CEO Matthew Shay. “As one of the busiest times of year for several retail sectors and as shelves begin filling with both traditional spring and holiday merchandise, retailers are looking forward to welcoming shoppers with attractive promotions on home goods, garden equipment and traditional Easter items.”

The survey found that 45% of those celebrating will purchase clothing, spending more than $2.9 billion. They will also spend $2.4 billion on gifts, $1.1 billion on flowers, $998 million on decorations and $695 million on greeting cards.

58% plan to spend at discount stores, while 41% will shop at department stores. Additionally, 21.8% will shop at a specialty store and 18.8% will shop online.

Source: Retailing Today

The US dollar has increased 12% so far in 2015 against the euro and is up 27% from a year ago. This has prompted Wall Street analysts to make deep cuts to earnings forecasts of US multinational companies, and increasing the appeal of smaller, domestically focused companies.

As a result, investors are keeping a continued bias toward U.S.-based stocks that do less business abroad, such as shares of small companies that tend to be more domestically focused, and on companies outside the U.S. that stand to benefit from a weakening of their home currency as the dollar strengthens, particularly European manufacturers. Tiffany & Co. announced sales fell 1% in January but would have risen 3% if not for currency moves.

Wells Fargo looked at how 2015 consensus earnings estimates for retailers have evolved over the past two years alongside how their stocks performed. Among the 51 firms sampled, estimates fell for 42, or 82%, of them. Three companies—Shutterfly, Aeropostale and J.C. Penney—saw declines of more than 100%. Yet retailers’ stocks performed fairly well over the period. Shares only declined for 13 of the 51. On average, the share price among the sample actually increased 46%. In other words, valuation multiples expanded.

Companies that generate more than 50% of sales outside the U.S. are expected to post an earnings decline of 11.6% in the first quarter when results start rolling in next month. Companies that generate less than half of sales outside the U.S. are expected to post flat earnings for the quarter.

David Kostin, chief U.S. equity strategist at Goldman Sachs Group Inc., said that when the dollar has rallied in the past, consumer-discretionary and consumer-staples stocks have fared better than the broader market. These sectors have relatively low exposure to overseas markets.

Source: The Wall Street Journal

PwC administered a global survey to understand and compare consumer shopping behaviors and the use of different retail channels across 19 territories. Key findings:

US Consumers Shopping Online

• 39% of US consumers surveyed make online purchases monthly
• Top 3 reasons why US shoppers buy online instead of in store: lower prices/better deals than in stores (52%), ability to shop 24/7 (47%), and no need to travel to a physical store (40%)
• Top 3 reasons shoppers choose their favorite online retailers: “The prices are good”, “They usually have the items I want in stock”, and “I trust the brand”
•  US consumers do their research before buying online: books/music/movies/video games 75%, toys 62%, electronics/computers 73%
• The ability to return purchased items online sways consumers to purchase from certain retailers. Most important to shoppers were paid return labels provided with shipment (86%), online purchase returns available in-store (76%), can return purchase to a convenient location (61%)
•  Even with free shipping, consumers are willing to pay for same day (61%) and 1-2 day delivery (58%)

Source: PwC.com