Starbucks Corp, the world’s largest coffee company, is finalizing its retail partnership with India’s Tata Coffee Ltd and hopes to announce the deal by the end
FDI Allowed In Supermarket Sector
November 24, 2011 By Leave a Comment
FDI – India threw open its $450 billion retail market to global supermarket giants on Thursday, approving its biggest reform in years that may boost sorely need
Wal-Mart To Train And Work More With Women
September 15, 2011 By Leave a Comment
Wal-Mart Stores Inc will double the money it spends with women-owned businesses, train women around the world and push major suppliers to use more women and min
Retail sales slump but consumer mood perks up
June 12, 2010 By Leave a Comment
WASHINGTON (Reuters) – Sales at U.S. retailers unexpectedly fell in May for the first time in eight months, but a jump in consumer sentiment to a near 2-1/2 year high in early June tempered fears of a slowing economic recovery.
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January Retail Sales Up – Retailers bullish
February 2, 2010 By Leave a Comment
SAN FRANCISCO (Reuters) – January sales at top U.S. retail chains should rebound into positive territory from last year’s decline as shoppers redeemed holiday gift cards and retailers avoided drastic clearance sales.
Retailers ranging from Target Corp to J.C. Penney Co Inc to American Eagle Outfitters Inc will report January sales on Wednesday and Thursday. Sales at stores open at least a year, or same-store sales, are forecast to rise 2.4 percent compared with a drop of 5.7 percent last year, according to Thomson Reuters data.
The figures could mark the fifth consecutive monthly sales increase after a year’s worth of declines during the recession, as consumers slowly return to spending and retailers lower prices to match a more circumspect shopper.
January is seen as the least important month of the holiday fourth quarter, accounting for the smallest portion of its sales. But retailers including Aeropostale Inc, Gap Inc and TJX Cos Inc could raise their earnings forecasts when they report sales results, analysts said, helped by demand from bargain-hungry shoppers and improved margins.
Comments retailers make about sales trends and whether traffic weakened significantly at the end of January will also give clues on how consumers might spend in the first quarter.
Some analysts worry stronger-than-expected holiday sales pulled spending forward and retailers could face an uphill battle luring shoppers in the first quarter, especially if cold weather crimps demand for spring merchandise.
“We want to get a sense of consumer sentiment and their appetite to continue to spend after they just spent quite a bit during the holiday,” said Wedbush Securities analyst Betty Chen.
DISCOUNTERS DOMINANT AS TEEN RETAILERS STRUGGLE
By category, the best sales performance in January is expected to come from discount chains such as Costco Wholesale Corp or BJ’s Wholesale Club Inc, where same-store sales are forecast to rise 4.5 percent. Wal-Mart Stores Inc, the top discounter, no longer reports monthly sales.
Traffic at discount retailers has risen during the economic downturn as shoppers seek bargains on TVs, food and medicine.
But upscale shoppers are once again spending as the stock market stabilizes, Wall Street bonuses bounce back and high-end retailers introduce lower-priced merchandise.
Michael Gould, chief executive of upscale department store Bloomingdale’s, which is owned by Macy’s Inc, told Reuters at the opening of its store in Dubai that the retailer had a “wonderful” fourth quarter in the United States.
“I think January is the strongest month we have had probably in a year and a half,” he said.
Macy’s same-store sale are expected to decline 0.1 percent, compared with a drop of 4.5 percent last year.
The worst performance is expected from teen and child apparel retailers, where sales are forecast to decline 0.8 percent. The category is on track to post its 19th consecutive drop in same-store sales, according to Thomson Reuters data.
Jharonne Martis, director of consumer research for Thomson Reuters, said retailers were helped by shoppers redeeming holiday gift cards in the month.
“Consumers are spending, but they’re spending on basic necessities or at a discount,” Martis said. “Even though the high-end consumer … is spending a little bit more than they did last year, it’s not as big as we saw back in 2007.”
HO HUM FIRST QUARTER?
Total holiday retail sales in November and December rose 1.1 percent, according to the National Retail Federation, beating the trade group’s forecast for a 1 percent drop.
Retailers prepared for muted demand this holiday season by stocking less merchandise, allowing them to avoid profit-crunching price cuts in January.
“They were not very aggressive on their promotions, so that should help many of them raise their EPS guidance,” Chen said.
But the outlook for 2010 is muted. The NRF expects sales to rise 2.5 percent. Aside from the past two years, that would mark the lowest year-over-year increase since 1995.
Martis said unemployment could derail same-store sales if it ticks higher. Chen said retailers need to show they can do more than simply stabilize sales to win investors’ favor, including reversing a trend of declining traffic in January.
“What we’re going to need is a top line recovery in order to deliver earnings growth above last year’s results,” Chen added.
(Reporting by Nicole Maestri; editing by Andre Grenon)
US Retail sales to grow at 2.5 percent, employment to improve
January 26, 2010 By Leave a Comment
SAN FRANCISCO (Reuters) – U.S. retail sales should rise 2.5 percent this year, signaling that store chains have made it through the worst of the downturn as improvements in the housing and job markets bolster shoppers’ confidence, a trade group forecast on Tuesday.
The 2010 forecast from the National Retail Federation marks an expected improvement from a 2.5 percent drop in 2009 and a 1.3 percent increase in 2008. The data covers retail industry sales, excluding automobiles, gas stations, and restaurants.
Major retail shares tracked by the Standard & Poor’s Retail Index .RLX rose 1.1 percent in early trading. Data released by the Conference Board on Tuesday also showed U.S. consumer confidence rose for the third straight month in January to the highest since September 2008.
But this year’s retail industry sales forecast, while calling for growth, is still a modest one. Excluding the past two years of recession, a 2.5 percent rise in retail industry sales would mark the lowest year-over-year increase since 1995, when the trade group began tracking such figures.
“I wouldn’t describe this as a very strong year,” said NRF Chief Economist Rosalind Wells in an interview. “We’re not going to have a V-shaped recovery in the economy, and we won’t have a V-shaped recovery in consumer spending or retail sales. It’s a slow return to a more normal level.”
U.S. retailers just completed a better-than-expected holiday sales season. Holiday retail sales rose 1.1 percent in 2009, according to the NRF, beating its own forecast for a 1 percent drop in sales for the November-December period.
Retail chains were able to improve upon a dismal 2008, when holiday sales fell 3.4 percent, by cutting inventories and offering more targeted discounts to attract frugal shoppers.
JOBS, HOUSING TO HELP RETAIL SALES
The question looming is whether retailers can keep that momentum going in 2010 as consumers remain under pressure and joblessness stands near a 26-year high of 10 percent.
For 2010, Wells expects consumers to keep a frugal mind-set with a focus on values. That should help sales at discount retailers, warehouse clubs and off-priced retailers like Wal-Mart Stores Inc (WMT.N), Costco Wholesale Corp (COST.O) and TJX Cos Inc (TJX.N).
“In 2010, the retail environment will remain difficult, but the improved economy and easy comparisons will result in positive sales gains,” the NRF stated in its Retail Sales Outlook report.
While the employment picture is “far from pretty,” the NRF said the size of the monthly job losses has diminished and employment may start to grow this year.
“The hope is that as the year goes on, we’ll see improvement in the job market. When that happens, we’ll see a better consumer confidence level, we’ll see higher incomes, and that will all contribute to making consumers feel better and loosening up the pocket book,” Wells said.
The housing market also is showing signs of stabilization, she said.
“We think the housing market has bottomed,” Wells said, adding that a recovery in housing would help boost home values, consumer confidence and demand for home goods, like furniture or bedding, she said.
Wells also said there is already some improvement in sales among more upscale retailers.
“The high-end retailers are seeing better business because their consumer is a little less worried about losing their jobs,” she said.
But retailers facing the biggest challenges for 2010 are those catering to middle-income shoppers.
“The difficulties are still in the middle-income market. That will continue to struggle,” she said.
(Reporting by Nicole Maestri; Editing by Michele Gershberg, Carol Bishopric, Dave Zimmerman)
Proctor and Gamble to start ecommerce and sell products on its own website
January 16, 2010 By 1 Comment
CHICAGO (Reuters) – Procter & Gamble Co plans to introduce its own website this month to sell goods directly to consumers and to work on improving its relationships with established online retailers such as Wal-Mart Stores Inc and Amazon.com Inc.
P&G’s “eStore” will be owned and operated by e-commerce service provider PFSweb Inc, which will control prices, promotion, and distribution. Only U.S. shoppers will be able to buy the products.
Shares of PFSweb were up 97.14 percent at $3.45 in afternoon trading.
P&G’s Chief Executive Bob McDonald said last August that the company wanted to increase its online sales “substantially” over the next few years.
Online sales accounted for about $500 million, or 0.6 percent, of P&G’s fiscal year 2009 sales of $79 billion.
P&G plans a full scale launch this spring, after a pilot test with 5,000 consumers starting in the next few weeks.
The “eStore” marks the first time the world’s largest household products maker will have a broad online retail strategy.
P&G has a small presence in e-commerce through some of its brands and through a site that Gillette built about 10 years ago, before it was bought by P&G. Still, most online sales of its products are done through others such as Walmart, Amazon.com and Alice.com.
Household goods such as P&G’s Tide detergent, Pampers diapers and Pantene shampoo are heavy or bulky, so shipping costs can be high for low-priced items.
Also, consumers want to replace some products, like toilet paper, at stores instead of waiting for a shipment.
Brian Wiegand and Mark McGuire, who launched Alice.com last June, said they expect every consumer packaged goods company to have an online store or a plan for one by the end of 2010.
“It’s a trend that’s way overdue. It’s way behind the other industries,” Wiegand said on Friday.
P&G said it had spoken with others selling its products online to make sure they understand the company aims to increase sales for itself and retailers.
P&G aims to run the eStore like a “learning lab” to help gather information about online purchases. The site will test subscription models as well as using social media.
“I don’t think P&G or other manufacturers are done with exploring the different ways that they’re going to try to go direct to consumers,” McGuire said.
Alice.com, which is not involved with P&G’s plans, is starting to run online storefronts for others, such as General Mills Inc’s Nature Valley granola bars.
P&G said it does not expect its new online venture to impact www.theessentials.com, which Gillette started to sell hard-to-find parts for its products, such as Braun electric razors and Oral B battery-powered toothbrushes. That site, owned and run by The Field Cos Inc, has added other P&G products since P&G bought Gillette back in 2005.
(Reporting by Jessica Wohl; Editing by Derek Caney, Toni Reinhold)
Williams-Sonoma holiday sales rise, ups Q4 view
January 14, 2010 By Leave a Comment
(Reuters) – Williams-Sonoma Inc (WSM.N) reported a 7.4 percent rise in holiday revenue, prompting the home goods retailer to forecast fourth-quarter results above market estimates.
The operator of the Pottery Barn, West Elm and Williams-Sonoma chains has been helped by its decision to offer more lower-priced home decor items and improved holiday merchandise, driving in more shoppers.
For the holiday period ended December 27, sales increased 7.4 to $783 million.
The company expects fourth-quarter sales of $1.06 billion to $1.08 billion, with profit between 65 cents and 70 cents a share.
On an adjusted basis, the company expects earnings of 69 cents a share to 74 cents a share.
Analysts, on average, were expecting earnings of 50 cents a share, on revenue of $1.03 billion, according to Thomson Reuters I/B/E/S.
Shares of the company were up 1 percent at $23.05 Thursday. They had closed at $22.75 Wednesday on the New York Stock Exchange
(Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Jarshad Kakkrakandy)
Retail sales unexpectedly fall, jobless claims up
January 14, 2010 By Leave a Comment
WASHINGTON (Reuters) – Sales at U.S. retailers unexpectedly fell in December and applications for jobless benefits rose last week, raising concerns about the durability of the economy’s recovery.
The Commerce Department said on Thursday retail sales fell 0.3 percent last month, the first decline in three months, as consumers spent less on vehicles and an array of other goods during the holiday shopping month.
Sales had increased 1.8 percent in November. Analysts polled by Reuters had forecast retail sales gaining 0.5 percent last month.
A separate report from the Labor Department showed initial claims for state unemployment benefits rose 11,000 to 444,000 last week, higher than the 437,000 claims that analysts surveyed by Reuters had forecast.
“Will consumers be able to take over from the government and replace demand that has come so far from government spending. If the consumer is unable to do that, it’s going to pose some significant risks to the global recovery story,” said Boris Schlossberg, director of research at GFT Forex in New York.
S&P 500 stock index futures turned negative after unexpectedly weak jobless claims and retail sales data. The dollar pared gains against the yen. U.S. government debt prices added to gains.
Compared to December 2008, sales rose 5.4 percent, but fell 6.2 percent for the whole of 2009.
Motor vehicle purchases fell 0.8 percent, while sales at electronics and appliance stores dropped 2.6 percent.
The data, coming in the wake of a report last week showing a surprise drop in non-farm payrolls in December, could add to worries that the economic expansion that started in the third quarter of 2008 could falter once government stimulus ends.
Stubbornly high unemployment remains the weakest link in the recovery from the worst economic downturn since the 1930s. Job worries are expected to constrain consumer spending, which normally accounts for more than two-thirds of economic activity.
But the labor market is showing some signs of healing. The four-week moving average of claims, which smooths out weekly variations dropped for a 19th straight week, declining 9,000 to 440,750, Labor Department data showed.
That was the lowest level for the four-week average of claims in nearly 1-1/2 years, since it was at 440,250 at the end of August 2008.
Excluding motor vehicles and parts, retail sales fell 0.2 percent in December, the biggest decline since July, after rising 1.9 percent the prior month. Economists had expected a 0.3 percent increase.
Core retail sales, which excludes autos, gasoline and building materials, fell 0.3 percent after rising 0.9 percent in November.
The U.S. housing market is still suffering from the downturn. The nation closed out 2009 with a record number of foreclosure actions and is poised to set a fresh record this year, real estate data company RealtryTrac said on Thursday.
It said 2.8 million properties with a mortgage received a foreclosure notice last year, up 21 percent from 2008 and 120 percent from 2007.
Separately, the Mortgage Bankers Association said a surge in demand for home refinancing loans helped push it weekly gauge of mortgage applications up by 14.3 percent last week as interest rates edged down.
(Reporting by Lucia Mutikani and Glenn Somerville; Editing by Neil Stempleman)
VCs eschew physical stores, focus on retail tech
January 14, 2010 By Leave a Comment
NEW YORK (Reuters) – Venture capitalists were never very interested in the retail sector, but they are now taking a second look, focusing on a new generation of online retailers and the next wave of technology to help stores optimize how they run their businesses.
Despite a history of backing a few big names such as Home Depot Inc (HD.N) and Staples Inc (SPLS.O), U.S. venture capitalists parked less than 1 percent of their money in retail over the past decade, with retail investments totaling $331.7 million in 2009, according to Thomson Reuters data.
But now venture capitalists, who typically invest in startups, are backing companies that make retail technology. They seem to be betting that retailers, facing shaky growth prospects and fragile market shares, will seek these technologies.
During the last decade, new retail technologies centered around helping retailers measure the efficiency of their online advertising. Now, retailers are looking to boost the efficiency of their overall operations.
Venture capitalists speaking at a National Retail Federation conference on Wednesday said they have invested in advanced technologies that address concerns such as merchandise loss and theft, as well as computer programs that help allocate goods between stores and optimize price markdowns.
“E-commerce has been the stepchild to advertising technology in last 5-7 years, and you’re seeing that flip because of the Great Recession,” said Neeraj Agrawal, a general partner at Boston-based Battery Ventures.
ON-LINE RETAILERS WITH A TWIST
Given their interest in new retail-oriented tech, venture capitalists are unlikely to pour money into old-fashioned stores.
“We like capital efficiencies so we don’t particularly like bricks and mortar stories,” said Howard Morgan, a partner at First Round Capital and a former president of tech company incubator Idealab.
With heavy cash outlays and consumers who continue to move online, traditional retail can’t offer the same returns that the technology and biotechnology companies usually favored by venture capitalists can, said Mark Heesen, president of the National Venture Capital Association.
In fact, there are few funds left that still invest in traditional retailers at all. One example is Highland Consumer Fund, managed by Staples founder Tom Stemberg.
Investors instead are turning to online retailers, though they say the current crop is far more sophisticated than the cohort that yielded online pet store Pets.com, which imploded soon after a high-profile initial public offering a few years ago.
For example, Battery Ventures pointed out that it has invested in Dallas-based clothier J. Hilburn, which sells custom men’s shirts but has no stores and First Round has backed online retro clothing store Modcloth.
IPO PROSPECTS
Despite two successful IPOs in the fall — by discount retailer Dollar General Inc (DG.N) and teen apparel chain rue21 Inc (RUE.O), both held by private equity — the venture capitalists don’t expect a slew of VC-backed retail IPOs.
But the investors say that hasn’t kept them from investing, betting that the IPO market will improve eventually. An IPO and the sale of a company are two methods used by venture capitalists to get returns on their investments.
“We’re looking five years out so we’re investing now because we do believe the exit environment is going to get better,” Morgan said, referring to the IPO market.
(Reporting by Phil Wahba; editing by Carol Bishopric)
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