US CONSUMER SPENDING INDEX DECREASES IN JUNE

The US Consumer Spending Index decreased by .4 points in June. Confidence in the economy was mixed, as 10.6% of males reported the economy as excellent, versus only 2.9% of females reporting the same. 33.5% of respondents viewed the economy as excellent or good, but 65.2% reporting it fair or poor. When asked about personal finances, 46.8% of those identified as white rated it excellent or good. Those identified as black felt their personal finances were getting better at 37.5% versus 30.2% in May. Republicans in June increased in number who believe the economy is getting better, up 22.7% versus 18.9% in May.

Source: Chain Store Guide           

Home Depot and Lowe's Report increased sales in first quarter, Home Depot beats all projections

In the first quarter, Home Depot Inc. increased net earnings to $1.58 billion, up 14% from $1.38 billion a year ago. Home Depot reported sales of $20.9 billion for the first quarter of fiscal 2015, up 6.1% from prior year. Same store sales rose 6.1% and comp-sales for US stores were up 7.1%.

Home Depot adjusted its earnings estimates, expecting sales to grow 4.2% to 4.8% this year. Earnings per share are expected to grow 11-12% from fiscal 2014.

"We had a stronger-than-expected start to the year as we experienced a more normal spring across much of the country and continued recovery of the U.S. housing market," said Craig Menear, chairman, CEO and president of the Atlanta-based retailer.

The rebounding housing market also helped results at Lowe’s, who reported net earnings of $673 million for the quarter, a 7.8% increase over prior year. Sales increased 5.4% to $14.1 billion. Same store sales increased 5.2%. However, this did not beat Wall Street projections.

Lowe’s is expecting to open a total of 15 to 20 home improvement and hardware stores this year.

“I am pleased that we executed well and delivered another strong quarter,” said Robert A. Niblock, Lowe’s chairman, president and CEO. “We generated comparable sales growth in all regions of the country and across all product categories, driving strong earnings per share growth."

Source: Retailing Today

Home Building and Housing Market at Best Momentum since 2007

US housing rose 20.2% in April from March and home building grew to the highest level since 2007, before the housing recession began. This is the biggest percentage increase since February 1991. New applications for building permits, foretelling construction in the coming months, increased 10.1%.

The increased activity was broad: starts on single-family units climbed 16.7%, the most since January 2008, and multi-family units rose 27.2%. Economists surveyed by The Wall Street Journal expected April housing starts to reach a rate of 1.01 million, but it reached 1.135 million in April.

“The stronger starts and permits data suggests that some real gauges of economic activity may finally be starting to accelerate during the spring,” TD Securities strategist Gennadiy Goldberg said in a note to clients.

US home builders are still less optimistic. The National Association of Home Builders’ confidence index fell for the fourth time in five months in May, to a reading of 54. However, a reading above 50 means most builders generally hold favorable views of the market for newly built, single-family homes.

Source: The Wall Street Journal

WALT DISNEY WORLD RESORT’S EXPANSION OF DOWNTOWN DISNEY TO RETAIL COMPLEX DISNEY SPRINGS

The Walt Disney World resort is expanding its current Downtown Disney complex, rebranding the shopping, dining and entertainment area as Disney Springs. Downtown Disney will be transformed into Disney Springs, including four distinct outdoor neighborhoods, by 2016. The four distinct areas will have the air of Florida’s waterfront towns and will open in four phases: The Landing, Town Center, Marketplace and West Side. When completed, this will more than double the number of shopping, dining and entertainment venues from the current 70 to 150.

Fashion retailers Zara, Tommy Bahama, Lilly Pulitzer, Pandora and more are on board to join the area’s more than 1 million square feet, including 350,000 square feet of new leasable space. Sophisticated restaurants will provide experiences for families along with premium, affordable and fast fashion retailing options. Disney Springs will be a one of a kind Disney experience with beautiful open-air promenades, flowing springs and waterfront charm in Lake Buena Vista.

“Over the past few months we have opened several new dining and retail locations, which have quickly become the top producers in their chains,” said George A. Kalogridis, president of Walt Disney World Resort. “This type of momentum builds on the historical strength of the Downtown Disney area and its popularity with our guests from around the world as it evolves into Disney Springs,” he said.

Source: Retailing Today

MAY CONSUMER SENTIMENT INDEX FALLS TO 88.6

Data released Friday indicates consumers are more skeptical about the economy. May sentiment unexpectedly fell to 88.6, down from 95.9 in April and an 11-year high in January of 98.1.  Economists surveyed by the Wall Street Journal projected the May index would stand at 95.5.

"Confidence fell in early May as consumers became increasingly convinced that there would be no quick and robust rebound following the dismal (first) quarter" even if the underperformance was exaggerated by inadequate seasonal adjustments, said Richard Curtin, chief economist at Michigan's Survey of Consumers that compiles the sentiment index.

So far this year, consumers have not rushed to increase spending. Retail sales were flat in April. The one-year inflation expectations are now 2.9%, up from 2.6% in April. Consumers have chosen to save money or pay down debt.

Source: Fox Business.com

KOHL’S, DILLARD’S AND NORDSTROM’S REPORT ON Q1 RESULTS – NORDSTROM REPORTS HIGH LOYALTY PROGRAM SUCCESS

Kohl’s, Dillard’s and Nordstrom’s released Q1 sales results yesterday, on the heels of announcements of Q1 losses from JC Penney and Macy’s.

Despite launching a loyalty program and expanding advertising, Kohl’s reported weak consumer spending, but did report a gain. Kohl’s reported a profit of $127 million, up slightly from $125 million a year earlier. Sales grew 1.3% to $4.2 billion. Kohl’s operated 1,164 stores this year versus 1,160 last year. Kevin Mansell, Kohl's chairman, chief executive officer and president, said: "Sales were modestly below our original expectations for the quarter, but accelerated in the March/April combined period after a weak February. We are very pleased with our earnings results, with a more balanced promotional calendar driving merchandise margin combined with strong expense control."

Dillard’s reported Q1 sales at $109.6 million compared to $111.7 million prior year. Same store sales decreased 1%. Net sales were $1.574 billion, up 1.5% from last year. Sales were strongest in junior’s and children’s apparel, followed by shoes and ladies’ apparel. Sales were weak in the home and furniture category. The company noted that sales in Texas were below company average for Q1. "We are disappointed with our first quarter performance. Our 1% sales decline hampered our ability to leverage operating expenses and to drive net income growth," said Chief Executive William Dillard. "Although inventory is higher than we would like, we believe the levels are manageable."

Nordstrom’s also reported a drop in earnings for Q1. It reported a profit of $128 million, down from $140 million a year ago. However, Nordstrom.com and NordstromRack.com had a combined 70% increase in sales. Net sales increased 9.8% and same store sale increased 4%. Nordstrom’s loyalty program contributed greatly to its results. Members shopped 3 times more frequently and spend 4 times more on average than non-members. With 4.4 million members, sales from members increased 11% in the first quarter and represented 38% of sales.

Source: Retailing Today

JCPenney and Macy's Report on Q1 Results

JC Penney Co. exceeded analysts’ estimates for Q1, showing smaller than expected losses/ Penney posted a loss of $167 million in the quarter ending May 2, compared to a net loss of $352 million Q1 2014. Women’s apparel, men’s and home were the company’s top performing merchandise divisions. Sephora inside JC Penney, available in 515 locations, also showed strong performance.

“Our exceptional customer experience, when combined with our strength in private brands, national brands and points of differentiation like Sephora inside J.C. Penney and the Disney Collection, give us confidence in our ability to earn customer loyalty and deliver on our long term goals,” he said. “In fact, based on our results to date, including a strong Easter and Mother's Day, we feel confident in raising our 2015 expectations for sales, gross margin and SG&A." The company expects same store sales to increase 4-5%.

Macy’s net income fell 13% to $193 million from $224 million in Q1 2014. Same store sales declined 0.7%.

“We fell short because of a confluence of factors,” said Terry J. Lundgren, Macy’s chairman and CEO. “Delayed merchandise shipments from the West Coast port slowdown and severe winter weather early in the quarter restrained business levels. Moreover, sales were negatively affected by lower levels of spending by international tourists visiting major U.S. cities with flagship Macy’s and Bloomingdale’s stores, including New York City, Chicago, Las Vegas and San Francisco.”

Macy’s is still pursuing a new store strategy, planning to open 32 new stores by 2018. Macy’s expects total sales growth of 1% and same store sales growth of 2% in fiscal 2015.

Source: Chain Store Age

Walmart and Lowe's Acquire Target Locations in Canada

Walmart announced earlier this week its decision to acquire 13 Target locations in Canada. Lowe’s followed suit, announcing it will also acquire 13 Target Canada leases as well as a distribution center in Ontario. The Lowe’s deal is worth $125 million.

The store sites are across Canada and include markets where Lowe’s has low penetration. The distribution center is strategically located to serve Lowe’s current and the new proposed stores in Canada. The acquisitions are subject to court approval and the process should be completed by June 30.

"Since opening stores in Canada in 2007, we have developed a successful model for providing the Canadian customer with outstanding service and quality products for the home," said Sylvain Prud'homme, president of Lowe's Canada. "These additional locations will accelerate our expansion across the country, enhancing our presence in Western Canada and strengthening our base in Ontario. We are excited to bring Lowe's to more customers in more communities in Canada, further demonstrating our commitment to this important market."

Source: Retailing Today

Retail Sales Fall in April Despite Increased Shopper Traffic

An early Easter did not cause a drop in store visits in April. Shopper traffic increased 12% compared to April 2014. However, storefront conversion increased less than1% year-over-year, as more targeted shopping trips were seen in a more promotional environment.

Several retail verticals saw a decline in sales versus same time last year: 1.15 decline in general merchandise, apparel and furniture; 2.1% decline in clothing and apparel; and 1.6% decline in general merchandise.

Duration of shoppers in stores increased 18% from last year, but consumer caution around spending tax refunds are attributed to the decreased sales results.

Source: Chain Store Age

Canadian Tire Opens Second Digital Innovation Lab

Canadian Tire is three years into a total digital transformation that includes investments in agile technology solutions to advance its digital strategy, improve store operations and digitally power customer and employee interactions. It is opening a new facility, “Digital Garage” in Waterloo, Ontario. This innovation lab will give the company’s top digital innovators an opportunity to develop new in-store and online technologies at a faster pace.

In addition, Canadian Tire will open a new “showcase Store” in Edmonton, Alberta, offering an expanded assortment and dynamic digital experiences.

"Becoming a world leader in digitizing the retail experience is a top priority for the company," said Michael Medline, president and CEO, Canadian Tire. "To be a world-class retailer, we are building a strong foundation and implementing the right resources that will successfully take us from the old world to the new. In the Digital Garage, we will create and test cutting-edge software, products and apps in our own environment to take innovation at CTC to the next level."

Source: Chain Store Age

Accelerated Analytics Visits it's Customer, Swarovski, Flagship Store in Las Vegas

Accelerated Analytics was proud to visit Swarovski’s flagship store in Las Vegas this week. Swarovski is a customer of Accelerated Analytics, obtaining POS sales and inventory data and analytics for its retailer partners. Analytics include sales and inventory levels, out of stock, sales to stock ratios, sell thru percent and more. Accelerated Analytics was in town participating in the National Hardware Show convention, visiting its customers who sell into Home Depot, Lowe’s and other DIY stores.

Swarovski is the centerpiece of Las Vegas’ newest retail destination, Grand Bazaar Shops. The store has 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.

Smartphone and Tablet sales on the rise

A new report from Branding Brand’s Mobile Commerce Index released Wednesday indicates that revenue from shoppers on smartphones rose 73% over last year. In April 2015, smartphone revenue accounted for 13% of total online revenue, which represents a 63% year-over-year increase.

Identifying retail trends for 50 US mobile websites, smartphone conversion increased 31% since April 2014 and smartphone visits increased 29% year-over-year. Conversely, desktop conversion decreased 2% since April 2014, with visits decreasing 8%.

The 50 mobile sites in the index produced a total of 72 million visits and $86 million in revenue.

"This is the second month in a row where desktop conversion has declined," said Branding Brand CEO Chris Mason. "Because retailers have more ways to interact with consumers than ever before, they must continue optimizing their experiences to keep up with shopping's increasing complexity."

Source: Chain Store Age

Kohl's Expands "Shop Online, Pick Up in Store" Concept to all of it's Stores

Based on overwhelmingly positive shopper response to its store pickup for online orders service, Kohl’s is rolling out the service to all of its 1,164 stores in the US. The service allows shoppers to pick up in store within hours of placing an order online.

Kohl’s piloted the service at more than 100 stores in 2014. While the service is currently available for consumers shopping from their desktops and laptops via Kohls.com, it will be rolled out to tablets and mobile phones later this year.

When customers shop online, they have the option to see if the specific item is available at their local store. Two email messages, one to confirm the purchase and the second to indicate the item is available for pick up, are sent. Customers can park in a designated spot and find their items waiting at the customer service desk or fine jewelry counter.

“At Kohl’s, we are committed to putting our customers first, and we know our customers and their families expect an easy shopping experience, regardless of how they choose to shop,” said Krista Berry, Kohl’s executive VP, chief digital officer. “With the rollout of Buy Online, Pick Up In Store to all Kohl’s stores, not only are we are providing our customers greater access to the amazing products they know and love from Kohl’s, shoppers are able to get their items even faster than ever before in the way that’s most convenient for them.”

Source: Retailing Today

Retailer Product Logistics Planning Depends on how Consumers Buy

As Americans increased their borrowing in March, retailers hope this will result in increased sales. For retail planners of major supply chains, a big question is whether consumers will come back to the stores or get back to buying by going online. Online commerce is far outpacing storefront sales around the world, creating competition for traditional retailers. It is also creating a supply chain upheaval at brick and mortar stores. Walmart, Home Depot and others are trying to determine how to serve that online market as their own online sales are growing.

Moving truckloads of goods to stores is very different from putting together a lot of small shipments and parceling them out to buyers directly. Brick and mortar companies need to figure out how to make the logistics work without cutting into profitability. Many are testing the use of pickup centers in their stores, to see if customers can solve the logistics question themselves.

Source: The Wall Street Journal

Nordstrom Piloting Curbside Text Pickup

Nordstrom is piloting a new service for customers in several US stores, including at its flagship store in downtown Seattle. The service gives customers the ability to text or call the store ahead of time and a store associate will be waiting on the curb with their products when the customer arrives. Nordstrom has allowed in-store pickup of online items since 2008. The retailer also plans to pilot the service for Men’s alterations.

Source: Chain Store Age

Consumer Confidence Below Expectations in April

The Conference Board’s Consumer Confidence Index for April came in at 95.2. Expectations were to see an increase to 102.2 over March’s index of 101.3. March was very high, beating the consensus forecast of 96.4.

Lynn Franco, Director of Economic Indicators at the Conference Board, said in the release: “This month’s retreat was prompted by a softening in current conditions, likely sparked by the recent lackluster performance of the labor market, and apprehension about the short-term outlook."

Before the release, Bank of America Merril Lynch economists noted a weak job report in March and climbing gas prices may create less consumer optimism about the economy. Consumers expecting job growth fell to 13.8% from 15.3% and those expecting fewer jobs rose to 16.3% from 13.6%. Also, 11.2% of consumers are expecting wage cuts, up from 9.7% in March.

Source: Business Insider

JCPenney Grows Sephora Inside JCPenney Partnership

Starting May 1, J.C.Penney Co. Inc. is expanding its in-store partnership with Sephora, introducing Sephora to 25 additional J.C. Penney stores. Since the exclusive partnership began in 2006, more than 500 J.C. Penney stores feature a full-service Sephora offering.

In addition to these openings, J.C. Penney will expand its square footage of Sephora inside 6 of  its existing locations to an average of 3000 sq. ft. J.C. Penney hopes the expansion to new and smaller markets, as well as its growth of current space, will expand J.C. Penney’s reach as a destination for beauty.

"Sephora is one of the most powerful and exciting beauty concepts in the world, and we want to leverage that reputation to drive the growth of Sephora inside J.C. Penney,” said Ivy Spargo, senior VP and general merchandise manager for Sephora inside J.C. Penney. "With the addition of these locations, we are providing clients with a unique and compelling in-store beauty experience, while generating a wealth of cross shopping appeal."

Source: Chain Store Age

US Pending Home Sales Index Rises Again in March

The National Association of Realtors announced its pending home sales index, which measures contract signings for purchases of previously owned homes, increased 1.1% to a level of 108.6 in March, up from 107.4 in February. The Wall Street Journal surveyed economists who predicted the increase. The index rose 11.1% in March from the previous year.

Home sales have stabilized since dropping a year ago, when interest rates began to rise. Completed existing-home sales increased 6.1% in March. While sales of newly-built homes declined in March from February, they still increased almost 20% from sales in March 2014.

The pending home sales for existing homes rose in the South and the West in March, but fell in the Northeast and Midwest.

Source: The Wall Street Journal

Vanity Product Business is Booming

Demographic trends firmly favor small luxuries, according to a report from Bank of America Merrill Lynch. Vanity capital is globally at $3.7 trillion, with expectations to grow to $4.5 trillion by 208. Typical products range from cosmetics and smartphones, to fitness wear and health foods. They also include high end products like art, cars and fine wine.

The demographic trends include women who have more disposable income and are particularly prone to spend on small luxuries that improve their appearance, like anti-aging cosmetics. Over 40 percent of 25 to 35 year old Americans say they are already using or plan to use anti-aging products. Sales of anti-aging cosmetics grew by 5% to $25 billion in 2013 and sales are projected to rise by another 29% by 2018. Companies selling vanity products are seeing their stocks increase. Vanity capital stock earnings are forecast to grow by 37% over the next two years.

Accelerated Analytics’ customers who sell into this space include L’Oreal, Estee Lauder, Chanel, LVMH, Shiseido, Clarins, Coty, Elizabeth Arden, Osmotics, and Strivectin.

Source: CNBC

US Manufacturing PMI Decreases in April

The Manufacturing Purchasing Managers’ Index (PMI), which measures the performance of the managing sector based on five weights: New Orders (30%), Output (25%), Employment (20%), Supplier Delivery Times (15%) and Stock of Items Purchased (10%), decreased in the US In April.

A reading above 50 indicates an expansion of the manufacturing sector, while below 50 represents a contraction. April PMI in the US decreased to 54.2 from 55.7 in March. Manufacturing PMI in the US averaged 54.24 from 2012 until 2015, reaching an all-time high of 57.9 in August 2014 and a record low of 51 in November 2012. This rate of expansion was the slowest so far in 2015.

Japan, China, France, Germany and the US all reported readings that decreased from expectations. Japan, China and France had readings below 50. This is a continued downward trend for Japan and China. Numbers were a reversal for Germany and the US, which had been producing some great numbers so far this year.

US survey respondents generally cited softer new business gains, especially from international markets. This contributed to a softer increase in pre-production inventories. Supplier lead times lengthened for the twenty-second month, with a number of companies noting ongoing transportation delays at west coast ports at the beginning of the year.

Sources: Bloomberg, Trading Economics