Posted on 07/13/2014 9:36:23 AM PDT by Lorianne
American retailers may have more than a weather problem. Family Dollar said fewer shoppers came into its stores in the three months through May 31, pushing sales down 1.8%, excluding newly opened or closed stores.
In a move to win back traffic, the dollar chain said it would begin carrying beer and wine nationally next year, adding to the tobacco, frozen food and other consumables that now make up 73% of sales. “Our results continue to reflect the economic challenges facing our core customer and an intense competitive environment,” Chief Executive Howard Levine said. The discounter’s message echoed that of Container Store whose shares fell sharply midweek after its chief executive told investors that the company and its fellow store chains are in a “retail funk.” “We’ve come to realize it’s more than just weather,” Container Store CEO Kip Tindell said. Falling traffic led to the first drop in quarterly sales at the company in more than three years.
(Excerpt) Read more at online.wsj.com ...
“We’ve come to realize it’s more than just weather,”
You get three guesses at to what it could really be.
A lack of full time jobs with benefits...one cannot shop on part time wages and buying Obama care.
The “blame the weather” is code for obamanocare and the obama depression.
Just saying.
Go in any store. Pick up any product.
Look at the tag. It will probably say “Made in China”.
People are enjoying their "funemployment."
For some reason gasoline prices going down, like during the recession, despite what looks like worrisome supply threat in middle east. US fracking taking all the worry out of supply?
There is a scarier tag than that lurking in the grocery store...
Buy 5 for $20 in the beef and poultry department.
China is too expensive now for most low end manufacturing.
Food prices soar as incomes stand still
http://www.cbsnews.com/news/food-prices-soar-as-incomes-stand-still/
Your link doesn’t work.
What you have to do is go to Google news, put the full title of the article in the search box, and click on the result.
Apparently, they look at the referrer field in the header to decide to let you in.
Retail is on the wrong side of the technological curve. Between the internet and 3D printers we are the last generation that will consider shopping to something you do away from home.
I have a subscription. Here’s the full article.
American retailers may have more than a weather problem.
Family Dollar Stores Inc. FDO -3.07% said fewer shoppers came into its stores in the three months through May 31, pushing sales down 1.8%, excluding newly opened or closed stores.
In a move to win back traffic, the dollar chain said it would begin carrying beer and wine nationally next year, adding to the tobacco, frozen food and other consumables that now make up 73% of sales.
“Our results continue to reflect the economic challenges facing our core customer and an intense competitive environment,” Chief Executive Howard Levine said.
The discounter’s message echoed that of Container Store Group Inc., TCS -1.34% whose shares fell sharply midweek after its chief executive told investors that the company and its fellow store chains are in a “retail funk.”
“We’ve come to realize it’s more than just weather,” Container Store CEO Kip Tindell said. Falling traffic led to the first drop in quarterly sales at the company in more than three years.
Investors flocked to the seller of bins, boxes and shelves when it went public last November, and shares more than doubled on opening day to close at $36.20. But so far this year, shares have dropped nearly 44%, as Container Store has succumbed to some of the pressures weighing on retail broadly.
Results at retailers haven’t been uniformly bad this spring. But there are enough negatives to shake earlier hopes that shoppers would whip out their wallets and resume shopping after the long, tough winter. The mixed showing continues to cloud the optimism arising from stronger job growth and rising consumer confidence.
The unemployment rate dropped to 6.1% in June, marking the best stretch of job growth in almost a decade. But five years into the economic expansion, big chains like Wal-Mart Stores Inc. WMT -0.31% and Kroger Co. KR -0.31% remain divided over whether consumers are indeed bouncing back.
Kroger’s shoppers are “exhibiting less cautious spending behavior,” CEO Rodney McMullen told investors in June. “More customers perceive the economy to be in recovery” and are shelling out for things like premium pet food and organic products.
But Wal-Mart U.S. President Bill Simon said this week that the declining unemployment rate is doing little to bring shoppers into its stores. In an interview on CNBC, he predicted it would take six months to a year for retailers to start seeing a sales boost from job growth.
Sales at Wal-Mart’s U.S. stores, excluding newly opened and closed stores, have fallen for five straight quarters, and traffic has dwindled for a year and a half.
L Brands, parent of Victoria’s Secret, said Thursday that its merchandise margin rate dropped in June from the same period last year. Bloomberg News
The economy’s gains are giving a lift to shoppers who are already better off, but the low-end consumer “isn’t gaining traction,” Mr. Simon said.
Burberry Group BRBY.LN -0.82% PLC, which caters to those better-off shoppers, on Thursday said retail revenue, adjusted for currency fluctuations, rose 17% to £370 million ($634.84 million) in the fiscal first quarter ended June 30. The fashion house said its biggest challenge right now is the strong British pound.
On Thursday, a handful of chain stores reported sales for June, with uneven results. Costco Wholesale Corp. COST -0.06% came in a little stronger than analysts expected, reporting a 6% increase in monthly sales, excluding gasoline. Gap Inc. GPS -0.78% reported a 2% decrease in June sales, which were stung by a 7% sales drop at its signature Gap stores. Sales at its Old Navy stores increased by 7%.
L Brands, which owns Victoria’s Secret and Bath & Body Works, said sales grew 2% last month, falling short of consensus estimates for a 3.1% increase.
Among teen retailers, Zumiez Inc. ZUMZ -2.92% reported a 3.1% increase. The better-than-planned sales, in part, led the retailer to raise its guidance for the quarter.
Overall, the seven retailers tracked by Thomson Reuters reported a 4.5% increase in June sales, excluding newly opened and closed stores. Thomson Reuters forecast the eight companies to record 4.2% growth versus a 5.4% increase a year earlier.
Near-term trends aside, store chains across the retailing industry are wrestling with what could be a permanent decline in shopper visits. Customers now use their mobile phones and computers to compare promotions, prices and products before heading into a physical store to buy clothes, electronics and increasingly, groceries.
Fewer visits mean fewer chances for impulse purchases as shoppers cherry pick promotions that sometimes produce losses, changing the calculus for retailers that have built their stores around traffic expectations that are now changing.
Lumber Liquidators Holdings Inc. LL -0.71% warned late Wednesday that customer traffic in the second quarter was significantly weaker than expected and lowered its financial guidance for the year. Shares in the flooring retailer fell 22% to $55.25 on Thursday.
“Shoppers are making targeted visits to malls and going into fewer stores,” said Christopher Ainsley, CEO of ShopperTrak, a Chicago-based data firm that records store visits for retailers using tracking devices installed at 40,000 outlets in the U.S.
ShopperTrak is changing the way it presents its data, as mall owners and retailers come to terms with declining store visits. In reaction to feedback from the retailers ShopperTrak serves, the firm said starting July 17 it would quit reporting results from individual malls and instead report the tallies by ZIP Code.
The firm said its customers wanted a way to understand what was happening in the broader area as opposed to just at individual malls.
Container Store said traffic had declined in the quarter, offset somewhat by higher tickets for the shoppers who did show up. Sales fell by 0.8% in the quarter ended May 31 from a year earlier, excluding newly opened or closed stores, and the company lowered its full-year financial forecast.
The chain’s CEO, Mr. Tindell, said Container Store tried to resist the impulse to join other retailers in ramping up discounts to draw shoppers in. Retailers, he said, are training Americans to only come out to shop when there are deals in what has become “the most promotional environment I’ve seen in my career.”
Healthcare
High Gas prices
Increasing food costs
Fewer jobs
The effects of so called global “warming” during the first three months of the year (had to heat the house somehow)
That is part of it, no doubt, but also the economy is not doing well (in spite of what they tell you) and people are using less energy. Since the Middle East has been one long crisis for years, the market has already taken most of it into account. Right or wrong, people can’t maintain a “spooked” level indefinitely.
Yup. It's obvious to everyone except the intelligentsia, moonbats, and politicians living in the DC bubble.
When I walk into family dollar, and discover that their prices are HIGHER than the dreaded Wallyworld, guess where I’m NOT going to shop?
I don’t care if their dishsoap is 2 cents higher, I won’t buy it.
And what do you do with clothing that won’t wash? Is it reasonable to purchase clothes to wear once and throw it away because the stains won’t wash out?
I can purchase a bag of potting soil at FD for $3.00, a little bag. Or I can go to wallyworld and purchase a $40 lb bag for $2.98
I don’t need to pay $5.00 for a potato peeler, only to have the thing come apart and injure my hand so that I have to get stitches...the first time I use it.
As long as retailers treat their customers like imbeciles, they should expect to see their businesses fail.
We are all on the wrong side of the technological curve.
Within 20 to 30 years, most jobs will be eliminated because machines will be doing all the work.
The vast majority of Americans will be on the dole, with no way to better yourself though hard work, because there will be no work.
I would not call that progress.
And I certainly wouldn't be cheering each technological step along the way.
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