Finally, Target has announced a variety of relief efforts. They’re donating $300,000 in product relief packages assembled by volunteers and delegates from the Republican National Convention. The retailer has also given the American Red Cross access to their store in Convington, LA for use as an emergency operations center, and are allowing the Salvation Army to use a vacant store in Dallas, TX to store supplies.
Associated Press is running an article this afternoon called Retailers stock up as Gustav nears coast. The article discusses different measures that retailers are rolling out in order to prepare for the storm, to make sure that they are able to reopen quickly after the storm hits and to provide the supplies the people need in the aftermath.
Some interesting points:
Home Depot is staging critical supplies, such as lumber and generators, within a day’s drive of the stores that are expected to be hit.
Wal-Mart shipped 47 truckloads of water to the region on Thursday.
Target is making sure that supplies, such as personal hygiene products, are shipped not only to the affected region, but to places where evacuees are likely to be moved to.
The logistics of making sure the stores are able to open up in the aftermath of a major natural disaster like this is astounding. The retailers need their employees to be safe, need the stores to be stocked, and need to have distribution and communication networks in place to ensure everything goes smoothly. This is a huge undertaking, but retailers like Home Depot, Wal-Mart, and Target plan for these types of events in advance and have the support systems in place to make sure the transition goes as smoothly as possible.
The stimulus checks have been (presumably) spent, back to school shopping is underway, and the retail sales numbers for July are in and they are, well, pretty ugly. A lot of retailers posting negative same-store-sales numbers for the month, many of them posting numbers that fell below Wall Street’s expectations. Wall Street is responding - as of 12:30, the S&P Retail Index is down around $7.
The negative results are hitting all segments of retailers - from department stores to the mall, teen retailers to mass market merchandisers. Wal-Mart posted a positive sales increase of 3.0%, but that is less than the 3.5% increase that Wall Street was looking for. Target saw same store sales drop 1.2% in the month of July and warn that August isn’t going to be much better. JCPeneny’s sales dropped 6.5% but raised their Q2 guidance “due to better than expected sell-through of promotionally priced merchandise and continued expense management measures.” Kohl’s saw a steep 10.4 drop in same store sales in the month.
Gap saw negative numbers across all brands - Old Navy down 16%, Banana Republic down 8%, and Gap North America down 6%. When are they going to spin off the Old Navy brand, sell it, and let someone else deal with the turnaround?
Teen retailers aren’t seeing the Back to School numbers they hoped for with American Eagle down 7%, PacSun was down 4%, Abercrombie & Fitch (as a company) was down 7% (with only A&F proper posting flat numbers, up 1% for the month. Hollister was down 11% - blowing away the 4.1% decrease expected by analysts), but Aeropostale saw sales jump 13%.
A few of the stories I’m reading and wanted to share today:
John Zogby’s got a very insightful look into the political trends of retail consumers and dives behind the numbers to make sense of it all. He looks at presidential election polling numbers, the retailers the customers shop at, and how this relates to the retailers’ branding.
.. and finally - Starbucks is offering a $2 discount on iced beverages in the afternoon when you buy a drink in the morning. I think this is a smart move that should drive repeat business throughout the day. Besides that, I’m selfish and now look forward to saving a little bit of money on my second trip to Starbucks every day.
Another mixed month for retail sales. While some retailers rebounded and look to go into Back to School on a positive note, it was another dark month for some mall and teen retailers.
Wal-Mart beat expectations with a 5.8% increase in June (showing 6.1% increase at their US name-brand stores and a 4.6% increase at their Sam’s Club locations). Target ended up in positive territory with a 0.4% uptick in same store sales. Costco showed a 9% increase, Kohl’s beat estimates with a 2.3% increase, and even mall retailer Aeropostale showed gains with a 12% increase in June.
The month was not as kind to mall and teel retailers such as Gap (company down 7%), Abercrombie (down 3%), and American Eagle (down 11%).
June’s numbers have been posted to Retail Numbers, which allows you to chart and track the retail industry monthly same-store sales.
A bit of lingo that I’ve learned lately: turns out that Target refers to the the impact of the Back to School/Back to College season on their stores, by classifying them into levels. The levels are No Affected, Affected, Freaky, and Super Freaky. It doesn’t appear that there are a lot of Super Freaky stores in the company, but those that are classified as such, are situated within close proximity to college campuses. I wonder what kind of percentage increase these stores see, over the rest of the company, during the season.
First off, two stories from the Consumerist. In one, an Target employee alleges that security there “mostly follows black people”. Article contains a rebuttal on most of the points from another current Target employee. As usual with the Consumerist, great comments on that article with some more interesting information.
Also from the Consumerist, some leaked internal documents from AT&T, in regards to the retail end of the iPhone launch. As the biggest technology and consumer electronics launch of this year, this will have huge implications on retail. With so many people wanting to get it, I’m interested to see how other retailers (non AT&T/Apple) react to this and try to get people to buy their products on iPhone launch day.
Yesterday’s New York Post has an article, Macy’s Margins, on the behind the scenes concerns of Macy’s regional buying officiers and what that means to the consumer.
Finally, Zumiez’s Couch Tour was in Deptford, NJ (just outside of Philadelphia). Reports are that several teenagers were hurt at the concert. But what is amazing to me is that estimates put the crowd at 2,000 to 2,500 people. Great turnout for this event. I’d imagine Zumiez is happy with those kinds of figures. More coverage from the Gloucester County Times.
Stories that I’ve come across today on the web that I’d like to share:
Originally announced back in August, the Rite Aid purchase of Eckerd and Brooks pharmacy chains is official today. Rite Aid will have to divest certain properties to allow for competition. Conversion of the stores should take 16 months. Once this deal is complete, Rite Aid will be the third largest pharmacy chain in the US (behind Walgreens and CVS) and the predominant pharmacy retailer on the East Coast. More thoughts from the Albany Times Union.
I’ve got to say that I’m sad to see the Eckerd brand go. Part of it is the fact that the Eckerd stores in my area are newer than the Rite Aid locations, making for a more pleasurable shopping experience.
Last week the Motley Fool had a good look at Abercrombie & Fitch, this week they’ve got a good look at J.Crew. They’ve had a succesful IPO, improved their gross margin, increased revenue, and increased same store sales. Good times for that retailer.
Finally, lux.et.umbra is asking whether summer hours would improve business in Silicon Valley. Good thoughts. The budgets for small retailers is tight, but not being open when your customers want to shop is bad business. That’s not to say that everyone should be open 24 hours, but late hours during the Summer may not be a bad thing.
A few months ago, the latest version of Target’s “Assets Protection Directives for 2006″ found it’s way onto several websites and forums. It is still up on one anonymous Blogspot page. The posting of this confidential information caused a bit of a stir within the industry, as the timing of this was shortly after Wal-Mart made news by loosening their shoplifting policy.
Now, Target is fighting back by trying to track down the anonymous poster/blogger:
The Minneapolis-based company is suing the unidentified “John Doe,” who is believed to live in Georgia, in federal court for posting Target’s anti-theft procedures on Web sites and various retail-employee forums on the Internet in July.
The information is used to secure Target’s merchandise from shoplifters and other wrongdoers. Target says in a court filing it is provided to employees on a “need-to-know” basis.
To find out who “John Doe” is, Target is seeking the help of AOL, Yahoo! Inc. and Microsoft Corp. It’s unclear whether these companies will comply, though.
This case will be one to watch as there is precendent upholding the right to anonymous blogging. However, this case involves the posting of company-protected trade secrets. This case will be watched closely by many as it will have potential ramifications throughout the blogosphere in regards to the right to anonymity, free speech, and exactly how far that goes.
No Turn On Red has been blogging about the retail industry, social media, branding, and how to connect with your customer. Posts are authored by Tom Sullivan, a technology obsessed, retail geek who is a User Interface Specialist with Media-Hive, in Red Bank, NJ.
