The Conference Board Leading Economic Index For The U.S. Increased In August

September 19, 2012

The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.2 percent in August to 103.8, following a 1.1 percent increase in July, and a 0.7 percent increase in June.

"The LEI continued to rise in August, although at a slower rate than in July," said Ataman Ozyildirim, Economist at The Conference Board.  "The LEI's six-month growth trend has been held back slightly by lackluster contributions from housing permits and new orders for nondefense capital orders.  Despite concerns about investment picking up, the economy should continue expanding at a moderate pace for the remainder of the year."

"The leading indicators point to an economy that is continuing to gain traction, but most likely won't repeat its stellar second quarter performance in the second half," said Ken Goldstein, Economist at The Conference Board.  "Meanwhile, the CEI, a measure of current economic activity, continued to expand through August, amid improving personal income, employment and retail sales.  However, industrial production registered a slight decrease for the first time in seven months."

The Conference Board Coincident Economic Index (CEI) for the U.S. increased 0.2 percent in August to 109.7, following a 0.1 percent increase in July, and a 0.3 percent increase in June.

The Conference Board Lagging Economic Index (LAG) for the U.S. increased 0.3 percent in August to 125.1, following a 0.3 percent increase in July, and a 0.4 percent increase in June.

Source: The Conference Board

Home Depot Updates Guidance

September 19, 2014

Investors don't seem to care that Home Depot's data breach is being characterized as the largest ever in the retail sector with shares of the company hitting a new high on Friday.

Home Depot shares touched a 52-week high of $93.75 on Friday, a day after the company disclosed details about an extensive data breach which went undetected for months and compromised the information of 56 million customers.

The company confirmed that the malware used in its recent breach has been eliminated from its U.S. and Canadian networks and provided new details about the completion of a major payment security project designed to increase data security.  The project provides enhanced encryption of payment data at the point of sale in the company's U.S. stores, offering significant new protection for customers, the company said.  Roll-out of enhanced encryption to Canadian stores will be complete by early 2015.  Canadian stores are already enabled with EMV or "Chip and PIN" technology.

Despite the expense of the IT investigation and remediation efforts, the strength of Home Depot's business during the period when hackers were stealing customers' data enabled it to increase its full year profit forecast by two cents to $4.54.  While the updated guidance includes various expenses already incurred, it does not reflect potentially substantial accruals for future losses the company said are probably but cannot be quantified at this time.

Source: Retailing Today

Albertsons And Safeway Ready To Roll

September 19, 2014

The merger between Albertsons and Safeway is expected to close in a few months and when it does the combined company already has a new senior leadership and field operations structure in place.

The companies late Friday announced key leadership positions it said drew on strong talent within both organizations to build an innovative, customer-focused and growth-driven company.

"We are confident in this team's ability to build a great company that's positioned to win over the long term by earning the loyalty of grocery shoppers in every market we serve and delivering superior operational and financial results," said Safeway president and CEO Robert Edwards.

Edwards will serve as CEO of the combined company once the deal closes and current Albertsons CEO Bob Miller will become executive chairman.  The combined company will operate nearly 2,400 stores under banners such as Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, ACME, Albertsons, Jewel-Osco, Lucky, Shaws, Star Market, Super Saver, Amigos, Market Street and United Supermarkets.

"We know the best way to grow our business is to have the highest quality fresh departments, lower prices, clean, well-stocked stores and the best customer service in the market," Miller said.  "Our teams will focus on delivering what customers want locally, and we will give our store teams more flexibility to make decisions that are right for their neighborhoods.  The division teams will have the responsibility to have the right assortment for their markets."

Shareholders of both companies approved the merger on July 25 and the deal is now under review by the Federal Trade Commission but is expected to close during the fourth quarter.  The new company will be comprised of three regions and 14 retail divisions that will be supported by corporate offices in Boise, ID, Pleasanton, CA, and Phoenix, AZ.

Source: Retailing Today

Multifamily Decline Pushes Nationwide Housing Starts Down 14.4 Percent In August

September 18, 2014

Led by a steep 31.7 percent decline in multifamily production, nationwide housing starts fell 14.4 percent to a seasonally adjusted annual rate of 956,000 units in August, according to newly released figures from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.  Single-family housing starts dropped 2.4 percent to a seasonally adjusted annual rate of 643,000 units.

"The August drop in multifamily starts is not too surprising, given how volatile the numbers have been the last 18 months," said David Crowe, chief economist of the National Association of Home Builders (NAHB).  "And while single-family starts registered a slight decline, low mortgage rates, affordable home prices and pent up demand will keep single-family production moving forward in 2014."

"Our members are telling us that traffic to new model home sites and sales expectations are on the rise," said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Delaware.  "Despite the monthly blip, single-family starts are still 8 percent above last year's level."

Combined housing starts fell in all regions of the country.  The Northeast, Midwest, South and West posted respective drops of 12.9 percent, 10.3 percent, 10.9 percent and 24.7 percent.

Issuance of building permits registered a 5.6 percent loss to a seasonally adjusted annual rate of 998,000 units in August.  Multifamily permits fell 12.7 percent to 372,000 units while single-family permits decreased 0.8 percent to 626,000 units.

Regionally, the Northeast, Midwest, South and West registered overall permit losses of 11.6 percent, 12.4 percent, 0.6 percent and 8.3 percent, respectively.

Source: National Association of Home Builders

Rite Aid Revises Guidance In Second Quarter

September 18, 2014

Solid same store sales growth at Rite Aid caused second quarter profits to surge but looming pressure on pharmacy margins prompted the company to reduce its full year outlook.

Rite Aid reported revenues of $6.5 billion for its second quarter ended August 30, representing a 3.9% lift credited to rising pharmacy same-store sales.  Rite Aid revised its year-end guidance, however, based on anticipated lower pharmacy margins going forward.

"In the second quarter, our team of dedicated Rite Aid associates worked together to execute our strategy and deliver results that reflect growth in net income and adjusted EBITDA and significant increases in same-store sales and prescription count," stated Rite Aid chairman and CEO John Standley.  "Heading forward, while we believe that our key initiatives will continue to drive top-line growth, we are revising our guidance based on lower than anticipated pharmacy margin in the second half of fiscal 2015.  As we navigate these headwinds, we will remain focused on growing our business, generating continued operational efficiencies and positioning our associates to deliver a consistently outstanding experience for our customers."

Same-store sales for the quarter increased 4.1% over the prior year, consisting of a 1.1% increase in front-end sales and a 5.6% increase in pharmacy sales.  Pharmacy sales included an approximate 199 basis point negative impact from new generic introductions.  The number of prescriptions filled in same stores increased 3.7% over the prior year period.

Prescription sales accounted for 68.8% of total drug store sales, and third-party prescription revenue was 97.5% of pharmacy sales.

Net income was $127.8 million or $0.13 per diluted share compared to last year's second quarter net income of $32.8 million or $0.03 per diluted share.  The improvement in net income resulted primarily from an increase in adjusted EBITDA, a lower LIFO charge due to pharmacy inventory reductions and a $62.2 million loss on debt retirement in the prior year, partially offset by higher income tax expense.

Adjusted EBITDA was $364.2 million or 5.6% for the second quarter compared to $341.6 million or 5.4% of revenues for the like period last year.  Adjusted EBITDA improved due to an increase in front-end and pharmacy gross profit, partially offset by an increase in selling, general and administrative expenses related to the company's higher level of sales.

The improved pharmacy gross profit was driven by the increase in pharmacy revenues and the impact on inventory valuation related to the company's transition to its new drug purchasing and delivery arrangement with McKeeson, partially offset by lower reimbursement rates.  The net effect on inventory valuation resulting from the transition to the outsourced McKesson arrangement is not expected to be material to fiscal 2015 results, but did increase gross profit, adjusted EBITDA and pre-tax income by approximately $40 million in the second quarter.

In the second quarter, the company relocated 5 stores, remodeled 117 stores and expanded 1 store, bringing the total number of wellness stores chainwide to 1,433.  The company also opened 1 store and closed 10 stores, resulting in a total store count of 4,572 at the end of the second quarter.

Based upon current estimates for reimbursement rates and anticipated lower profitability from new generics and generic drugs that recently lost exclusivity, the company is expecting decreases in pharmacy margin in the second half of fiscal 2015 as compared to its prior estimates and therefore is lowering its guidance for adjusted EBITDA, net income and net income per diluted share.  Adjusted EBITDA is expected to be between $1.2 billion and $1.275 billion.  Net income is expected to be between $223 million and $333 million and income per diluted share between $0.22 and $0.33.  The company is also narrowing guidance for sales and same-store sales.  Sales are expected to be between $26 billion and $26.3 billion and same-store sales to range from an increase of 3% to an increase of 4% over Fiscal 2014.  Capital expenditures are expected to be approximately $525 million.

Source: Retailing Today

Builder Confidence Hits Highest Level Since November Of 2005

September 17, 2014

Builder confidence in the market for newly built, single-family homes rose for a fourth consecutive month in September to a level of 59 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.  This latest four-point gain brings the index to its highest reading since November of 2005.

"Since early summer, builders in many markets across the nation have been reporting that buyer interest and traffic have picked up, which is a positive sign that the housing market is moving in the right direction," said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Delaware.

"While a firming job market is helping to unleash pent-up demand for new homes and contributing to a gradual, upward trend in builder confidence, we are still not seeing much activity from first-time home buyers," said NAHB Chief Economist David Crowe.  "Other factors impeding the pace of the housing recovery include persistently tight credit conditions for consumers and rising costs for materials, lots and labor."

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor."  The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low."  Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI components posted gains in September.  The indices gauging current sales conditions and traffic of prospective buyers each rose five points to 63 and 47, respectively.  The index gauging expectations for future sales increased two points to 67.

Builder confidence also rose across every region of the country in September.  Looking at the three-month moving average for each region, the Midwest registered a five-point gain to 59, the South posted a four-point increase to 56, the Northeast recorded a three-point gain to 41 and the West posted a two-point increase to 58.

Source: National Association of Home Builders

Millennials Will Play A Large Role In Shaping Housing Demand

September 16, 2014

• Millennials will spend over $2 trillion on home purchases and rent in the next five years.
• Millennials' housing aspirations are not so different than previous generations.
• Most plan to purchase homes and live in suburbs, and nearly all already have cars.

Millennials will play a critical role in shaping housing demand over the next five years, concludes a new report by The Demand Institute (TDI).  They will spend $1.6 trillion on home purchases and $600 billion on rent, more on a per-person basis than any other generation in the next five years.  Millennials will make up one in every four dollars spent on housing over this period.

According to the report, there will be 8.3 million new millennial households formed between now and the end of 2018 as these young adults increasingly venture out on their own.  While most of these new households will rent, many existing millennial households will purchase homes.  The vast majority plan to buy a home in the future.

Released today by The Demand Institute, a non-advocacy, non-profit think tank jointly operated by The Conference Board and Nielsen, the report Millennials and Their Homes: Still Seeking the American Dream finds that, in contrast to the common refrain about Millennials, these young adults have similar aspirations and intentions as previous generations when it comes to housing.  The vast majority plan to own homes, and nearly all already have cars.  Most planning to move intend to have their next home in the suburbs, not the city.

Millennials and Their Homes: Still Seeking the American Dream, examines the demand for housing among the youngest adults, who will drive a significant portion of this market over the next five years.  This analysis is supplemented with proprietary economic and consumer research.  The report is the result of an 18-month research program that includes in-depth interviews with 10,000 U.S. consumers, including more than 1,000 Millennials, along with analysis of 2,200 cities and towns in America and projections of the national and regional U.S. housing markets.  The findings offer insight into the forthcoming housing choice of adults aged 18-29 to help business and policy leaders identify opportunities to better meet the needs and aspirations of America's newest household heads.

"A fundamental question abou Millennials is whether their coming of age in the Great Recession has shaped their goals and aspirations to be different from those of previous generations," said Louise Keely, President of The Demand Institute and Senior Vice President at Nielsen.  "We found that, while this generation has many unique characteristics when it comes to their housing choices, they share many of the same intentions as young adults in previous decades.  As Millennials' economic situations strengthen, their demand will be important drivers of the housing market."

"One important difference between Millennials and young adults in previous decades is the unique financial challenges of home ownership today, resulting from graduating into a weak job market with growing student loan debt," said Jeremy Burbank, Vice President at The Demand Institute and Nielsen.  "Many Millennials are open to alternative approaches to housing finance, including single-family rentals and rent/own hybrid contracts such as lease-to-own."

Source: The Conference Board

Thanks To Saks, HBC's Sales & Profit Soar In Q2

September 12, 2014

Hudson's Bay Company is reaping the rewards of its acquisition last year of Saks.  The company's retail sales soared 86.6% to $1.8 billion, from $948 million in the prior year.

Consolidated same-store sales increased by 1.9% on a local currency basis, with increases of 1.1% at HBC's department store group (DSG), 2.2% at Saks Fifth Avenue and 14.9% at Off 5th.  Digital commerce sales totaled $162 million, including $116 million from Saks and growth of 82.2% at DSG.

In terms of merchandise category performance, sales growth at DSG was driven by men's apparel, home and cosmetics.  Sales growth at Saks Fifth Avenue was led by menswear, gifts and accessories.  Sales growth at Off 5th was strong across the majority of categories.

Gross profit jumped to $700 million, from $368 million in the prior year, again primarily attributable to the inclusion of Saks.

"HBC's quarter was characterized by strong performance from the higher end of our businesses, demonstrating the sustained strength of affluent consumers, and softer performance from our more moderate businesses.  Off 5th, buoyed by its new digital business, experienced outsized same store sales growth for the quarter," said Richard Baker, HBC's governor and CEO.  "We continued to invest in HBC Digital, where we witnessed tremendous sales growth.  Based upon our results for the first half of the year and our positioning for the back-to-school and holiday quarters, we are affirming our outlook for full-year fiscal 2014."

During the second quarter, HBC began the integration of the Home Outfitters business with the Home business of the Hudson's Bay banner.

"Joining our two Home businesses not only allows us to create a more powerful Home destination, but also drives efficiency by combining our merchandising and marketing efforts and organizations," said Donald Watros, HBC's president.

HBC is currently in the process of assessing its Home Outfitters locations and previously announced the closing of locations in Mississauga, Ontario, and Abbotsford, British Columbia, in December 2014 and January 2015, respectively.  Beginning with this year's third quarter results, Home Outfitters will be included in HBC's department store segment.

During the quarter, the company opened four new Off 5th stores located in Boston, Massachusetts; San Diego, California; Charlotte, North Carolina and Lousiville, Kentucky.  During the third quarter, HBC expects to open a Lord & Taylor store in Albany, New York, Off 5th stores in Eagan, Minnesota; Costa Mesa, California; and Columbus, Ohio and a Hudson's Bay Outlet in Mirabel, Quebec.

HBC also recently announced the planned opening of a Saks Fifth Avenue store in the fall of 2016 at Brickell City Centre in downtown Miami, Florida.  Previously, the company has announced plans for Saks Fifth Avenue stores in San Jual, Puerto Rico, in the spring of next year and in Honolulu, Hawaii, in the spring of 2016.

Looking ahead to the full fiscal year, the company anticipates total sales ranging from $7.8 billion to $8.1 billion.  This implies low-to-mid single-digit consolidated same store sales growth calculated on a local currency basis, driven in part by strong digital sales growth.

As previously announced, Paul Beesley joined the company during the second quarter as CFO.  Subsequent to the second quarter, John Caplice joined HBC as SVP, treasury and investor relations, a week ago.  Caplice most recently served as SVP, treasurer and investor relations, at Shoppers Drug Mart Corporation, Canada's largest retail drug store chain with annual sales in excess of $11 billion, from 2000 to 2014.

Source: Retailing Today 

August Retail Sales Increased 0.5 Percent

September 12, 2014

The National Retail Federation calculates that August retail sales - excluding automobiles, gasoline stations and restaurants - increased 0.5 percent seasonally adjusted month-to-month and 2.7 percent unadjusted year-over-year.  When combined with revisions to July, August sales indicate a consistent improvement in consumer confidence and spending but run contrary to August's lackluster jobs report.  NRF fully anticipates upward revisions in employment and payroll numbers next month.

"The rise in cosumer confidence, labor markets and retail sales is encouraging," NRF Chief Economist Jack Kleinhenz said.  "August sales figures signal that consumers are willing and ready to spend as the economy improves.  However, until the pace of income picks up, we should not expect a sustained surge in spending."

All retail categories improved over the previous month with the exception of general merchandise stores.  Even though year-over-year sales slowed from 4.2 to 2.6 percent, "by and large merchants had a strong fiish to the back-to-school season, especially those selling clothing and electronics," Kleinhenz said.

"My overall impression is that the economy is moving in the right direction but that other factors, including rising concerns over the uncertainty in the Middle East, may produce some drag.  We remain hopeful but cautious."

Additional findings from NRF's retail sales analysis include:

• Building material & garden equipment & supplies dealers:
  • +1.4% month-to-month
  • +3.3% year-over-year
• Clothing & clothing accessories stores:
  • +0.3% month-to-month
  • +1.0% year-over-year
• Electronics & appliance stores:
  • +0.7% month-to-month
  • +0.5% year-over-year
• Furniture & home furnishing stores:
  • +0.7 month-to-month
  • +0.7 year-over-year
• General merchandise stores:
  • -0.1% month-to-month
  • +1.8% year-over-year
• Health & personal care stores:
  • +0.6 % month-to-month
  • +6.4% year-over-year
• Nonstore (online) retailers:
  • +0.1% month-to-month
  • +4.2% year-over-year
• Sporting goods, hobby, book & music stores:
  • +0.9% month-to-month
  • +4.1% year-over-year

Source: Retailing Today

BTS Propels Spending In August

September 12, 2014

Overall retail spending growth in August 2014 was the strongest in more than a year.  Retail dollar volume growth reached 2.8% in August - compared to 2.6% in July - as back-to-school shopping propelled spending growth in several retail categories.

August's overall average ticket growth remained positive at 1.2%, slipping slightly from July's 1.5% on a year-over-year basis.  Looking at growth rates of different payment types, credit transactions grew 5.8% in August, while signature debit card transactions rose 3.9% and transactions using PIN debit cards increased 3.4%.  Check transactions decreased 5.9% and prepaid card transactions grew 6%.

"Two important factors, back-to-school spending and late summer vacationing, contributed to strong overall consumer spending in August and despite stagnant wage growth and a moderate housing market, consumer confidence rose in August.  Robust credit card spending at 5.8%, was healthy again last month, surpassing both PIN and signature debit growth."

The report examined the period for August 2 through September 2, 2014, compared to August 1 through September 1, 2013. 

Dollar volume growth at furniture and home furnishings and general merchandise stores was positive on a year-over-year basis and increased sequentially compared to July, with a growth of 4.5% and 4.4%, respectively.

Source: Retailing Today 

Kroger Raises Full-Year Guidance

September 11, 2014

Kroger reported total sales of $25.3 billion, representing an increase of 11.6% for its second quarter.  Total sales, excluding fuel, increased 12.4% in the second quarter over the same period last year.

"We are winning with customers because we offer a full range of advantages including a great overall shopping experience, excellent customer service, a complete assortment of both national and corporate brand products and everyday low prices and promotional offerings," stated Rodney McMullen, Kroger CEO.  "As we improve our connection with customers, we are also executing our growth plan and delivering on our key performance indicators - all of which is fueling strong financial results for shareholders."

Net earnings totaled $347 million, or $0.70 per diluted share, and identical supermarket sales growth, without fuel, was 4.8% in the second quarter of fiscal year 2014, marking the 43rd consecutive quarter of positive identical supermarket sales growth.

Net earnings in the same period last year were $317 million, or $0.60 per diluted share.

Based on the second quarter results, the company raised and narrowed its adjusted net earnings per diluted share guidance to a range of $3.22 to $3.28 for fiscal 2014.  The previous guidance was $3.19 to $3.27 per diluted share.  Kroger raised its identical supermarket sales growth guidance, excluding fuel, to 3.5% to 4.3% for fiscal 2014.  The previous guidance was 3% to 4%.

This is the second consecutive quarter that includes Harris Teeter in Kroger's statement of operations.  Year-over-year percentage comparisons are affected as a result.

Source: Retailing Today

Unemployment Rates Remain Mixed In Europe

September 11, 2014

In July, unemployment rates remained mixed in Europe, according to unemployment rates and employment growth data compiled and standardized by The Conference Board International Labor Comparisons (ILC) program.

Unemployment decreased in Germany (from 5.0 to 4.9 percent), the Netherlands (from 6.8 to 6.7 percent) and Sweden (from 7.9 to 7.7 precent), but increased in France (from 9.8 to 9.9 percent) and Italy (from 12.5 to 12.7 percent).

"The variation in recent unemployment trends throughout Europe - remaining elevated and increasing in France and Italy while gradually coming down in the Netherlands and Sweden - highlights the mixed paths toward labor market recovery in the region," said Elizabeth Crofoot, Senior Economist with the International Labor Comparisons Program at The Conference Board.  "Contrary to most other European markets, Germany shows signs of existing labor market shortages given an overall upward trend in employment and historically low and declining unemployment rates, dipping below 5 percent for the first time since unification in 1991."

In the U.S., joblessness rose (from 6.1 to 6.2 percent) after four straight months of steady or declining unemployment.  Australia and Japan also saw the unemployment rate rise, while remaining stable in Canada.  While Japan's unemployment rate remains the lowest of all countries compared (3.2 percent) and has largely been on a downward trend since September 2013, it has increased in the previous two consecutive months.

Source: The Conference Board

Dollar General Appeals Directly To Rival's Shareholders

September 10, 2014

Since Family Dollar's board of directors unanimously rejected Dollar General's second and sweetened tender offer from September 2, Dollar General has decided to make the tender offer directly to the company's shareholders.

The company's all-cash offer of $80 per share beats Dollar Tree's offer of $74.50 per share cash/stock offer originally made July 28.  The Family Dollar board has rejected both Dollar General's offers on the basis of antitrust regulatory considerations.

But Dollar General is appealing to Family Dollar's shareholders with approximately $640 million of additional aggregate value over Dollar Tree's offer - a premium of 31.9% over the closing price of $60.66 for Family Dollar stock on the day prior to the Dollar Tree announcement.

As part of a definitive merger agreement with Family Dollar, Dollar General would be willing to agree to divest up to 1,500 stores if required by the FTC and to pay Family Dollar a $500 million reverse breakup fee if the transaction does not close for reasons related to antitrust approvals.

The offer is not conditioned upon any financing arrangements, according to Dollar General, which added that it has received written financing commitments that are in full force and effect from Goldman, Sachs & Co. and Citigroup Global Markets for all the financing necessary to consummate the proposed all-cash transaction.

"Our offer provides Family Dollar shareholders with significantly greater value than the existing agreement with Dollar Tree, as well as immediate and certain liquidity for their shares," said Rick Dreiling, chairman and CEO of Dollar General.  "By taking this step, we are providing all Family Dollar shareholders a voice in this process, and we urge them to tender into our offer.  Additionally, we now can begin the antitrust review process and will have an opportunity to present our position directly to the FTC.  As we previously have stated, we are confident in the results of our antitrust analysis, and we look forward to a constructive dialogue with the FTC."

Meanwhile, the Family Dollar board has confirmed that it will review and consider Dollar General's latest move in accordance with applicable law, and advise shareholders of its position regarding the tender offer by making available to shareholders, and filing with the Securities and Exchange Commission, a solicitation/recommendation statement on Schedule 14D-9.

"Applicable securities laws prevent Family Dollar from making any further comments on Dollar General's tender offer or its terms until after this filing is made on Schedule 14D-9 which will be no later than September 23, 2014.  Until that time, Family Dollar shareholders are advised to take no action," the board said in a statement, adding only that it has not changed its recommendation in support of the merger with Dollar Tree."

Source: Retailing Today 

CVS Closes Navarro Discount Pharmacy Acquisition

September 8, 2014

CVS Health has completed the purchase of Miami-based Navarro Discount Pharmacy.

The acquisition includes Navarro's 33 retail locations and Navarro Health Services, a specialty pharmacy serving patients with complex or chronic diseases.  The retail pharmacies will retain the Navarro Discount Pharmacy name.

"Navarro has a rich history and commitment to Hispanic consumers and we are excited to welcome them into the CVS Health family," stated Helena Foulkes, president of CVS/pharmacy, the retail division of CVS Health.  "We value the strength of the Navarro brand and we look forward to combining Navarro's unique understanding of its customers' needs with CVS/pharmacy's best in class pharmacy services and high quality health, beauty and personal care products, a combination that will strengthen our service to the Hispanic community."

Navarro Discount Pharmacy caters to Hispanic and ethnic marketplaces and further differentiates itself by offering many products and services that are not found in traditional drug stores such as wireless phones, designer fragrances and a large assortment of OTC drugs and vitamins.

Source: Retailing Today

The Conference Board Employment Trends Index Released Today

September 8, 2014

The Conference Board Employment Trends Index increased in August.  The index now stands at 121.29, up from 120.62 (an upward revision) in July.  This represents a 6.4 percent gain in the ETI compared to a year ago.

"The strong increase in the Employment Trends Index in recent months signals robust job growth through the fall," said Gad Levanon, Director of Macroeconomic Research at The Conference Board.  "The disappointing employment numbers for August seem to be a one month deviation from a stronger trend."

Augus'ts increase in the ETI was driven by positive contributions from seven of its eight components.  In order from the largest positive contributor to the smallest, these were: Percentage of Firms with Positions Not Able to Fill Right Now, Industrial Production, Ratio of Involuntarily Part-time Workers, Real Manufacturing and Trade Sales, Number of Temporary Employees, Job Openings, and Percentage of Respondents Who Say They Find "Jobs Hard to Get."

The Employment Trends Index aggregates eight labor-market indicators, each of which has proven accurate in its own area.  Aggregating individual indicators into a composite index filters out "noise" to show underlying trends more clearly.

The eight labor-market indicators aggregaed into the Employment Trends Index include:

• Percentage of Respondents Who Say They Find "Jobs Hard to Get" (The Conference Board Consumer Confidence Survey)
• Initial Claims for Unemployment Insurance (U.S. Department of Labor)
• Percentage of Firms With Positions Not Able to Fill Right Now (National Federation of Independent Business Research Foundation)
• Number of Employees Hired by the Temporary Help Industry (U.S. Bureau of Labor Statistics)
• Ratio of Involuntarily Part-time to All Part-time Workers (BLS)
• Job Openings (BLS)
• Industrial Production (Federal Reserve Board)
• Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis)

The Conference Board

Costco To Open Nine Stores By End Of 2014

September 4, 2014

Costco said it plans to open nine new warehouse stores before the end of calendar year 2014, following a boost in net sales for August and the fourth quarter.

During the month of August, net sales were $8.8 billion, an increase of 10% from $8 billion during the similar period last year.  Same-store sales in the United States increased 7%.

For the 16 week fourth quarter, the company reported net sales of $34.8 billion, an increase of 9% from $31.8 billion in the year-ago period.  Same-store sales in the United States increased 6%.

For the 52 week fiscal year ended August 31, Costco reported net sales of $110.2 billion, an increase of 7% compared with the year-ago period.  U.S. same-store sales rose 5%.

Source: Retailing Today

Break In Trend? Probably Not.

September 5, 2014

A gain of only 142,000 new jobs in August, relative to a stronger trend in hiring in previous months of over 200,000 new jobs per month, is somewhat surprising as the economy overall has been quite strong recently.  Retail employment has dropped, which may relate to weaker consumption figures in the past month.  Still, most likely this was just a one off.  For example, some leading indicators, such as part-time employment for economic reasons, dropped.  Also, unemployment continued its downward path, closing in on the 5.5 percent natural unemployment rate we expect in 2015.  If that is the case, it could still mean tightening of the labor market, leading to upward pressure on wages later in 2015, as also discussed in The Conference Board's new report, From Not Enough Jobs to Not Enough Workers, released earlier this week.

Source: The Conference Board

Rite Aid Sees Lift In August Sales

September 4, 2014

Rite Aid reported a 3.2% lift in sales for the 26 weeks ended August 30, ringing in $12.9 billion.

Same-store sales for the period increased 3.6% over the prior-year period.  Front-end same store sales increased 0.6%, while pharmacy same store sales increased 5.1%.  Prescription count at comparable stores increased 3% over the prior-year period.

Prescription sales represented 68.6% of total drug store sales for the 26 week period, and third party prescription sales represented 97.5% of pharmacy sales.

Same-store sales for the 13 week period ended August 30 increased 4.1% over the prior-year period.  Front-end same store sales increased 1.1% while pharmacy same store sales increased 5.6%.  Prescription count at comparable stores increased 3.7% over the prior-year period.

Total drug store sales for the 13 week period increased 3.7% with sales of $6.5 billion.  Prescription sales represented 68.8% of total drug store sales.

Rite Aid posted sales of $2.5 billion for the five weeks ended August 30, representing a 3.7% lift.  Same-store sales increased 3.9% over the prior-year period.  August front-end same-store sales increased 1.1%.  Pharmacy comparable sales, which included an approximate 219 basis points negative impact from new generic introductions, increased 5.2%.  Prescription count at comparable stores increased 3.7% over the prior-year period.

Prescription sales accounted for 69.3% of drug store sales.

Source: Retailing Today 

Fred's Sees Improvements In August

September 4, 2014

Just two days after reporting second quarter results, Fred's posted August results.  Improved sales and traffic in the month were driven, according to CEO Bruce A. Efird, by initiatives that the company implemented for the first time in August.

Total sales for the month increased 6% to $147.6 million from $139.4 million in August 2013.  Comparable store sales for the month increased 2.3% compared with flat store sales in the same period last year.

"We saw ongoing improvements in virtually all general merchandise departments during August, and our pharmacy department continued to post strong growth in comparable scripts and sales," said Efird.  "Going forward in the third quarter, we will continue to transform Fred's based on the convenience/pharmacy-centric model we recently outlined, a strategy that brings clear advantages to our store operations and customers."

During the month, Fred's opened three Xpress pharmacy locations.

Fred's operates 707 discount general merchandise stores, including 21 franchised Fred's stores, in the southeastern United States.

Source: Retailing Today

Inflation Continues To Slow In Most European Economies

September 4, 2014

In July, 2014, annual inflation as measured by the Harmonized Index of Consumer Prices (HICP) declined in 10 of the 16 economies compared, including in the U.S., Japan and the Euro Area as a whole.

Spain experienced the largest decline in price growth (from 0.0 to -0.4 percent), returning to deflationary territory for the second time this year.  Inflation in Switzerland (-0.1 percent) was unchanged, meaning that the Swiss economy also remains in a deflationary environment.  Prices accelerated substantially in Norway (from 1.8 to 2.2 percent), followed by slight gains in Denmark (from 0.4 to 0.5 percent).

"In July, inflation continued to slow in most European economis compared and reached a five year low in France, Italy, Spain, and Belgium," said Elizabeth Crofoot, Senior Economist with the International Labor Comparisons program at The Conference Board.  "German inflation has also been on a slowing path, declining from nearly 2 percent 12 months ago to 0.8 percent in July.  As price growth is one factor determining cost competitiveness, slowing German prices makes it increasingly difficult for firms in the Euro Area to compete against the region's largest economy without increases in productivity or further cost reductions."

July inflation remains below 1 percent in all Euro Area countries compared, except Austria (1.7 percent).  Inflation is above 1 percent in Japan (4.1 percent), Norway (2.2 percent), the U.S. (1.8 percent) and the United Kingdom (1.6 percent).

Source: The Conference Board