JCPenney, WalMArt and Dollar Tree Make Job Cuts to Corporate/Non-Store Positions

Walmart recently announced cuts of 450 positions at its headquarters. Dollar Tree announced the elimination of 370 positions (115 of those unfilled currently) at its headquarters. JC Penney followed suit, announcing plans to cut 300 of its 3,400 home office positions. All are stating cuts are to reduce expenses.

JC Penney still plans to hire 30,000 seasonal workers at the store level. In a statement the company said JC Penney is working to achieve its financial growth targets, and it is essential that operations align with the strategic priorities of the company. Over the last several months, the company has been evaluating its home office structure to identify opportunities for greater simplification and higher productivity.

Walmart’s announcement indicated the job cuts are coming at a time when Walmart is investing billions into its e-commerce to better compete with Amazon. “Our customers are changing, retail is changing and we must change. We need to become a more agile company that can easily adapt to shifting customer demand,” CEO Doug McMillon told about 18,600 employees at its headquarters.

Sources: Chain Store Age and Fortune

amazon plans to hire more than 100,000 this season, expecting high e-commerce sales

Amazon.com Inc. announced plans to increase hiring by 25% over last year’s holiday season, to 100,000 workers. Workers will be in Amazon’s 50 warehouses and 20 package sorting centers around the US. This is higher than United Parcel Service (UPS) plans to hire this holiday season. Amazon is responding to US Census Bureau reports that US e-commerce sales grew 14.1% in the second quarter, while brick and mortar retail increased 1% year over year.

Most retailers’ hiring is expected to remain flat. Target, Macy’s and Walmart announced they are holding their hiring steady. Walmart is looking to hire 60,000 workers this year and Target plans for 70,000 seasonal workers. Macy’s plans to hire 85,000. All are about the same as last year.

Source: The Wall St Journal

National Retail Federation (NRF) Consumer Research Reports Consumers Plan Holiday Spending to be flat Compared to Last Year; Expect This to be biggest omnichannel holiday ever

An NRF survey of over 7,300 customers indicated that the average spending per person this year will be almost flat with last year, increasing to $806 this year versus $802 last year. This is the highest amount of spending in the survey’s 14 year history, but is still disappointing to retailers.

“We continue to see positive momentum in retail sales growth, giving us reason to believe consumers will show up this holiday season as they look to take advantage of all of retailers’ promotional offerings,” said NRF President and CEO Matthew Shay. “In an effort to attract all shoppers – from the extremely price sensitive to the online millennial, retailers will be offering exclusive incentives, low prices, price-matching, top toys and everyone’s favorite - free shipping and buy online pick up in store offers.”

It is expected to be the most omnichannel holiday ever. Online spending is expected to be 46% of total spending this year. The survey found that 21.4% of shoppers will use their smartphone to purchase holiday merchandise. 37.9% will research products on their smartphones, and 20.3% will use it to look up product availability in stores.

Adding to the complexity of predicting holiday spend is consumer spending behavior. 40% of shoppers surveyed begin their holiday shopping before Halloween. When asked why, shoppers indicated the need to spread out their budget (61%), avoiding crowds (48%) and avoiding stress of last minute shopping (46%).

Source: Retailing Today

2016 Retail Store Closings Planned

Macy’s announced it would be closing 35-40 underperforming brick and mortar retail stores in the 2016 calendar year, making room to open its discount stores. Other retailers also announced plans to close doors in 2016, including Office Depot, Walgreens, The Gap and Barnes & Noble.

While retailers are usually reluctant to announce store closures because of the uncertainty it can create with investors and analysts, it also can be viewed favorably as a company’s ability to change quickly in such a competitive retail environment.

Retailers who have announce the highest number of store closures include: Office Depot/Office Max (400 closures), Barnes & Noble (223), Children’s Place (200), Walgreens (200), Aeropostale (175), American Eagle (150), Chico’s (120) and Pier One (60).

Source: about money.com

Shipping Rates Increase as Holiday Shopping Begins

Atlanta-based United Parcel Service announced rate increases to take effect on November 2, in time for holiday shopping. UPS will increase its fuel surcharges and will double its rates to deliver oversize items. Both UPS and FedEx are increasing rates and other charges about 5%. Separately, the US Postal Service is also asking regulators to raise prices by an average of 9.5%.

New fees are also being established for retailers using third party shipments. This new fee will affect retailers that allow vendors to ship directly to consumers, or who direct goods to their own shelves for restocking.

Any price increases as likely to be passed along to consumers in higher shipping costs and/or higher prices at checkout.

Source: Wall St. Journal

US Spending Decreases to Lowest Point in 2015 in September

The US Spending Monitor decreased 3.8 points in September, reaching its lowest point in 2015 and the lowest point since August 2014. Retail spending index decreased to 3 points under the 12-month average. The decrease comes with increased negative views on the economy, spending and personal finances. Over 60% of respondents rated their personal finances as fair or poor while 35.8% stated finances were getting worse. 62.7% of respondents have 3 months or less of emergency savings, while

23.7% have none.

Retail spending continues its 4-month continuous decline. 38.2% of adults are spending less on household expenses, 37% spending less on household improvements and 33.3% spending less on clothing, footwear and accessories. The household improvements category has the highest percentage planning to spend in this category, but with only 18.9% expecting to spend more in the next month.

A majority of retail purchases are expected to be made at a retail store next month. It is expected that purchases made using mobile devices or personal computers will increase as the holiday season approaches and pre-Cyber Monday deals start.

Source: Chain Store Guide

Accelerated Analytics Congratulates Customer Vera Bradley on Sharing its Best Quarterly Results in Nearly 5 Years in Q2 2015

Vera Bradley enjoyed its best quarterly results in nearly five years, beating analysts’ expectations in Q2 2015.  Analysts predicted an 11-cent share profit, which Vera Bradley exceeded with a 15-cent share profit, and saw its sales increase 1.5 percent to $120.7 million.

The company expects profits this year to land between 72 and 78 cents per share, well beyond expectations of 66 cents.

The retailer’s strategy is focused on luring more shoppers into its brick-and-mortar mall storefronts and increasing consumer attention on its brand.

Vera Bradley has been a customer of Accelerated Analytics since 2013, utilizing our POS and 852 sales and inventory reporting to drive sales and optimize inventory levels at many of its department store retailers.

The Home Depot Builds Third Facility of 1.6 Million Sq Ft to Support Omni-channel Operations; Will Open a New Technology Center in Marietta, GA in October

The Home Depot is officially opening a third facility to support its online business. The new 1.6 million facility in Ohio will employ 500 employees and will support its online operations that currently account for 5% of its business and continues to grow.

Home Depot also announced plans in October to open its Marietta Technology Center, a 200,000 square foot office complex that will employ 1,000 IT jobs. The Home Depot has enhanced its IT capabilities in conjunction with its supply chain and merchandising operations.

"These investments are advancing our interconnected retail strategy, which allows our customers to engage with Home Depot however they choose," said Craig Menear, chairman, CEO and president of The Home Depot. "We're also pleased to contribute to the economic growth of these communities."

The Home Depot is not the only major retailer ramping up fulfillment support for omnichannel retail. WalMart is spending $200 million to build a new distribution center in Polk County, Florida dedicated to fulfilling e-commerce orders.

Source: Retailing Today

Retailers Not Helped By Lower Gas Prices

The latest Consumer Fuels Survey results show that lower gas prices are not changing consumer buying behavior. Gas prices fell $.25 per gallon in September and $.60 since July. However, only 15% of consumers surveyed say they will spend more on non-fuel items in the coming month.

Declining gas prices are not increasing consumer optimism about the economy, as the recent stock decline is a concern for them. 89% of consumers say low gas prices are good for the economy, but 41% say the recent stock market decline has had an impact on their finances.

One segment of consumers are more optimistic. Among consumers aged 18 to 34, 23% say they will spend more money shopping this month.

Source: Retailing Today

E-Commerce Sales Affect Retail Warehouse Hiring for the Holidays

Staffing agencies for logistics companies and retailers are reporting having trouble hiring warehouse workers to stock holiday inventory. The need for warehouse workers has grown as online shopping sales have increased. Increased online ordering raises the difficulty of warehouse jobs requiring more picking, packing and higher volume work in the warehouses.

Companies have had to raise starting pay to attract workers. Most logistics warehouses are located in similar geographic clusters, and retailers are competing for the same workers. UPS plans to hire 90,000-95,000 seasonal workers for the holidays. Retailers are commenting that rising e-commerce sales means less need for traditional store clerks and more need for people to handle shipments.

Source: Wall St. Journal

Retail Store and Warehouse Inventory Data Tracking Imperative for Successful E-Commerce Strategy to Deal With Online Returns

A new survey by HRC Advisory indicates that 80% of retailers are not prepared to transform their supply chains for a customer-centric, omnichannel model. 95% of retailers said their biggest issue is mitigating online returns, which can run as high as 30% and are very costly for a retailer.

The high cost of online returns come from returns of online purchases to a store that does not carry that particular item. Also, when returned to a fulfillment center there are costs for freight, damage and a lost opportunity for a replacement sale in the store.

All of the retailers surveyed felt that fully integrating inventory and fulfillment between the online and physical store channels would achieve the most effective customer outcome and the lowest margin risk.  But 52% of them stated they do not have the systems in place to provide the required visibility to inventory in each store.  Only 35% had capabilities for vendor drop-ship and order in store and deliver to the customer. 60% of those retailers have plans to further invest in their e-commerce systems to provide an improved customer experience.

Currently, only half of the retailers were currently able to present customers with accurate inventory information and to fulfill the entire order at the time of the online purchase, and only half could ensure fulfillment from the closest location when an item is available in multiple locations and distribution centers.

Only 25% of retailers are starting initiatives to combine fulfillment from stores and warehouses to manage both channels more cost-effectively.

Vendors who use POS data analytics tools, such as Accelerated Analytics, to help track and manage inventory levels in stores and fulfillment centers can work with their retailer buyers to optimize their working capital investments in inventory and partner with them to create a better customer experience and reduce their lost sales opportunities.

Source: Chain Store Age

September Consumer Spending Index Improves While Retail Spending Index Decreases Slightly for the Month

The Consumer Spending Report US Spending Index increased 1.7 points in September. 28.7% of adults surveyed rated the US economy as excellent and 30.3% said it is getting better. There was a divide between Democrats and Republicans: 56% of Republicans felt the economy is getting worse, while Democrats had a much higher percentage believing the economy is excellent or getting better. While in most months adults aged 40-64 rate the economy and personal finances low, this month this age group had the highest percentage of respondents believing their finances are excellent.

The Retail Spending Index decreased 0.9 points. The percentage of adults that expected to spend on household expenses declined, with only 10% saying they expect to spend more. 51.2% responded they spent the same as the previous month. The outlook for next month appears to also remain flat.

Source: Chain Store Guide

Belk to be Purchased by Private Equity Firm for $3 Billion

Belk’s board of directors unanimously approved a merger with Sycamore Partners, expected to be completed in the fourth quarter of 2015. Belk agreed to be 100% acquired in a transaction with an estimated value of approximately $3 billion.

Founded in 1888 by William Henry Belk, Belk is the largest family-owned and operated department store in the US. Chairman and CEO Tim Belk will remain chief executive and the company will continue to be headquartered in Charlotte, NC. Belk operates 300 stores in 16 southern states.

"We are delighted to have found a financial partner that sees what we see in Belk: a 127-year-old brand that remains relevant today with exceptional customer loyalty in small, medium and large cities throughout the South,” said Belk. “We plan to grow Belk by executing our current strategic initiatives and undertaking new growth initiatives together with Sycamore. This transaction is an across-the-board win for our stakeholders."

Source: Chain Store Age

Is Erika going to be a bad girl?

Ten questions to get you started on a severe weather continuity plan.

Tropical Storm Erika has caused at least 4 deaths and widespread flooding as she moves past Dominica and Puerto Rico.  The current forecast model cone suggests a path right over Florida with Miami impacted early Monday morning (31 Aug).  The model is uncertain because traveling through the Caribbean could strengthen Erika into a hurricane, steer her toward the Carolinas, or just create mild to moderate flooding and wind.   

Florida is a huge retail market for Home Depot, Lowes, CVS, Walgreens, Walmart and many other retailers.  The east coast of the U.S. has millions of people in several large cities.  With a possible impact from Tropical Storm Erika less than three days away, now is the time to evaluate the risk Hurricane Erika poses to your business. This is a great exercise for not only this storm but also so that you can quickly and proactively act when the next storm is on the horizon.  

Ten Questions to Start Your Severe Weather Planning

1. Are my products impacted by the severe weather?  
2. What products are impacted?
3. Is the impact from the severe weather before, during, after, all the above?
4. What are my retail customer’s policies for store operations before, during, and after severe weather?
5. How will I be kept up to date on actions my retail customers are taking as a result of severe weather?
6. Can I create and save reports with the SKUs and stores I expect would be impacted by a severe weather event?
7. Can I purchase weather alerts or data to more quickly initiate our planning process?  

Developing a detailed understanding of how severe weather could impact your business and then using that to create a comprehensive process map, with actionable steps, is critical to business success when a severe weather event occurs.   After you have created your plan review it in detail with your retail buyer and replenishment managers.  They are likely to have input which will strengthen the plan further, and it's also very possible they will be willing to share resources which are part of their severe weather plan like advanced weather forecasts, and emergency store operations communications you might not otherwise have been able to access.  Is there model for Tropical Storm Erika more detailed than generally available information right now?

I would also recommend adding Twitter into your communication monitoring process.  During a storm news travels very fast on Twitter.  If you have taken the steps above to identify specific stores you can monitor Tweets by simple saved searches and hashtags.  You can also send Tweets using hashtags if you want to get a message out quickly which is related to the weather and your product. 

Retail can be severely impacted by weather, but with proper planning allowing your business to act prior to a storm or react very rapidly to a storm, your business doesn't have to be negatively impacted. In fact, a severe weather event could be a tailwind for your business. 

LOWE’S ANNOUNCES Q2 EARNINGS RESULTS ARE UP, FALLING JUST SHORT OF ANALYSTS EXPECTATIONS

Lowe’s reported an 8.4% increase in profit for Q2 2015, with net earnings of $1.3 billion and $1.20 a share. This up from last year’s Q2 earnings of $1.04 billion and $1.04 per share. Analysts were expecting results of $1.24 per share.

The home improvement retailer’s net sales rose 4.5%, which was in line with expectations. Same store sales at stores open at least a year were up 4.3%.

“We posted solid results for the quarter and were able to capitalize on big-ticket market share opportunities with strong growth in categories like appliances and outdoor power equipment,” Lowe's CEO Robert Niblock said in a statement.

As of July 31, 2015, Lowe's operated 1,846 home improvement and hardware stores in the United States, Canada and Mexico representing 201.4 million square feet of retail selling space.

For fiscal year 2015, Lowe’s expects to add 15 to 20 new home improvement and hardware stores, and expects total sales to increase 4.5% to 5%.

Sources: USA Today, MarketWatch

Home Depot Announces Q2 Earnings Results that Beat Forecast, and Lift Its 2015 Earnings and Revenue Forecasts

Home Depot Inc. announced Tuesday that an improving housing market helped it to beat quarterly sales forecasts in Q2 2015. Net income rose to $2.23 billion. Net sales rose 4.3% to $24.83 billion, beating analysts’ estimates of $24.69 billion. Same-store sales rose 4.2%.

Home Depot raised its projected sales for the year to a growth of 5.2%-6%, above its earlier 4.2%-4.8% previously projected range.

US housing starts rose to an 8-year high in July as builders increased construction of single-family homes.

"We saw balanced growth across our business resulting from strength in the core of the store as well as the continued recovery of the U.S. housing market," said Home Depot CEO Craig Menear.

Sources: Reuters, USA Today

Consumer Confidence Dips in August, DEspite Slight Increase in Retail Sales

The US Consumer confidence index decreased in August to a score of 92.9, down from July’s 93.1. The index score was expected to increase.

Retail sales increased 0.6% in July, attributed to employment rates rising. July’s unemployment rate hitting a seven year low of 5.3%.

“Renewed strength in personal finances largely offset slight declines in prospects for the national economy and buying conditions. The declines in prospects for the economy probably reflect the expected increases in interest rates, while the eventual but small impacts from falling commodity prices,  and a weaker global economy have yet to occur,” stated Richard Curtin, director of the Michigan Survey of Consumers.

Source: PYMNTS.com

Dillard's Announces Better than Expected Q2 Earnings Results

Dillard’s announced its Q2 2015 earnings report on Thursday, with higher than expected results. Net sales rose 2.7% year over year to $1,513.8 million. Total revenue improved 2.5% from same period last year, reaching $1,550.8 million versus $1,512.9 in 2014.

Merchandise same-store comparisons was up 1% from 2014. Categories that over performed were shoes, followed by junior’s and children’s apparel. The home and furniture category recorded the lowest sales in the quarter. The Central region performed highest, followed by the Eastern and Western regions.

Dillard’s has 272 stores, 25 clearance centers in 29 states and an online store at www.dillards.com . During the third quarter, Dillard’s plans to open 2 new stores, one each in Louisiana and Ohio.

Shares for Dillard’s, Inc. rose 2.4% after the announcement.

Source: Zaks.com

Nordstrom's Announces Positive Q2 2015 Earnings Results

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 Announces Disappointing Earnings Results Today

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