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Permalink Reply by Monte Smith on February 20, 2009 at 4:51pm

REPORT by Monte Smith on February 10, 2009 at 9:11am

Source: http://www.thecitywire.com/index.php?q=node/2807


JANUARY RETAIL SALES DIP; low-income shoppers changing retail game

Submitted by The City Wire staff on Thu, 02/05/2009 - 12:00pm.

Sales reported by national retailers on Thursday lend credence to a report that market share gains for retailers will come from catering to lower-income shoppers.

Retail Metrics reported Thursday (Feb. 5) that comparable-store sales nationwide dropped 1.8% in January. The decline was better than the 2.3% dip expected by market watchers, but still follows a December decline of 0.9% and a 1.8% November dip. (See list of January sales reports from stores active in the Fort Smith area at the end of this post.)

Bentonville-based Wal-Mart Stores Inc., however, posted a 2.1% increase in January same-store — stores open at least a year. And how big is Wal-Mart? That 1.8% nationwide decline would have been a 5.6% decline without Wal-Mart sales factored in.

Also, the International Council of Shopping Centers noted in its retail report that January same-store sales dipped 1.6%, with the ICSC predicting that February sales will dip as much as 2%

Falling home sales and prices, the worst unemployment situation in 16 years and consumer concerns about future economic woes are cited as key reasons for the three-month sales slump.

THE LOW-INCOME CONSUMER

Chicago-based IRI Insights issued a research report Thursday suggesting that low-income and cash-strapped consumers “represent an enormous opportunity for retailers and manufacturers during the slow economy.” IRI provides research for about 95 percent of the global Fortune 500 consumer packaged goods companies.

Further, IRI estimates the low-income group will increase its spending on consumer packaged goods (CPG) by as much as $84 billion during the next decade.

“Lower-income households are one of the hottest opportunities in the marketplace and will provide real growth for those who want to truly learn about the various micro-segments and their changing behaviors due to the economy,” IRI Consulting and Innovation President Thom Blischok noted in a statement.

The lower-income shoppers are not a “homogenous group,” according to IRI, and have different spending patterns within five distinct groups. Those groups are: Singles and married couples aged 25-34; seniors older than 65; households with children, Hispanics; and African Americans.

“At this point in history, the lower-income shopper is continuously challenged to stretch each and every one of their dollars, which will continue for at least the next four-to-eight years,” Blischok said.

Other retail tidbits from the IRI report include:

• CPG spending and private label sales improved during the third quarter of 2008.

• Budget-constrained, lower-income shoppers are shopping more frequently, but are spending less per trip.

• African American and older household spending has increased notably in salty snacks and chocolate candy.

• Hispanics have increased their spending on frozen dinners and cereals.

RETAIL SALES REPORTS

Wal-Mart Stores

January 2009: $17.9 billion
January 2008: $16.9 billion

Target

January 2009: $4.14 billion
January 2008: $4.11 billion

Dillard’s

January 2009: $377 million
January 2008: $435 million

J.C. Penney

January 2009: $983 million
January 2008: $1.16 billion

Kohl’s

January 2009: $720 million
January 2008: $791 million

TJX (TJ Maxx)

January 2009: $1 billion
January 2008: $1.1 billion

Permalink Reply by Monte Smith on February 20, 2009 at 4:53pm

REPORT by Monte Smith on February 11, 2009 at 3:07pm

I have just returned from a trip to Lowes to purchase some materials for a project I'm working on. It was very quite in Lowes this afternoon. I asked the kid at the check out how business has been and told me that it had been slower than usual but that last Saturday it was so busy that it had made up for probably three weeks of slowness. I'm not sure exactly what that means other than its an indication that there's an escalation of DIY (do it yourself) activity. Contractors usually hit the building supply locations early morning and during the week. Personally, my material bill that's spread out over four main suppliers runs from 2K to 6K a month depending on the projects I have. In the last 3 months I haven't even broke 1K with the combined total of all three months. So there is a ripple effect and that's just from a small time one man construction show like myself.

Speaking of ripple effects, Whirlpool, besides laying off a good number of folks also, per a friend of mine whose wife works there, cut the lunch hour from 45min to 18min This means that there is now not enough time to leave the plant and go and eat at one of the nearby cafes so the numerous little mom & pop cafes and even a few franchise places like Burger KIng and Wendys are all in a real bind because of this. However, I imagine the vending machines at Whirlpool are experiencing a tremendous upsurge of business.

Speaking of upsurge. Just recently on the local news two businesses that are doing a booming business right now are liquor stores and video game retail stores.

Permalink Reply by Monte Smith on February 20, 2009 at 4:56pm

REPORT by Monte Smith on February 12, 2009 at 7:38am

And now for something completely different: GOOD MANUFACTURING NEWS

Submitted by The City Wire staff on Wed, 02/11/2009 - 2:08pm.

The increase in foreign wages and shipping costs are just two reasons companies might return their manufacturing operations to the U.S., according to Archstone Consulting.

The Stamford, Conn.-based company said new assessments of “manufacturing and supply chain strategies” could result in scenarios in which manufacturing in the U.S. is more profitable.

Archstone said its study results are a “wake-up call for manufacturers” who might assume overseas manufacturing is the cheapest and most productive option.

“For years, the concept of off-shoring, or moving production and/or sourcing operations to a foreign country, has been the mantra of any supply chain manager looking to cut costs,” John Ferreira, principal and global manufacturing industry practice leader for Archstone, said in a statement. “Now, amid volatile oil prices and an uncertain global economic future, this analysis no longer is a certainty.”

According to Archstone, manufacturers in the past three years have seen increases in costs related to “off-shoring manufacturing for export purposes” rather than in-country demand. Some of the increases include:

• Ocean freight costs have increased 135%, highlighting risks and cost volatility.
• The global commodity price index has risen by 27%.
• The Chinese Yuan has gained 18% in value compared to the U.S. dollar.
• Chinese manufacturing wages have risen by 44%.

The study also found several “soft cost issues” that result in reduced efficiencies and customer service. Those include:
• Slower cycle/delivery time
• Reduced supply chain flexibility and responsiveness
• Lost visibility, coordination and control over the supply chain including quality
• Bottlenecks in logistics networks (e.g., ports, transportation)

“The perceived 25-40% cost savings associated with off-shoring has previously been made possible by low labor costs, cheap commodities and favorable exchange rates – factors that no longer exist in today’s marketplace,” Ferreira noted in the statement.

The Archstone study found that almost 90% of the companies surveyed are considering changing their manufacturing and supply strategy and are being more selective when making off-shoring decisions.

Archstone also said U.S. manufacturers are more aware of the need to consider supplier price and terms, delivery costs, operations and quality costs, customer-centric supply capabilities and other situational costs before making a decision to relocate or site a new plant.

More... http://www.thecitywire.com/index.php?q=node/2902

Permalink Reply by Monte Smith on February 20, 2009 at 4:57pm

REPORT by christopher tidman on February 16, 2009 at 5:05am

Ottawa Canada.

Most people here are government employees and get a regular pay check. A lot of them suffer from VDD Value Distortion Disorder. When you lose the association between what you do and what you get paid, you lose the ability to be objective. A good decision is one that makes you feel good.

A few really good incomes in any area can ameliorate the effects of an economy going off the rails, so for most it is business as usual.

Permalink Reply by Monte Smith on February 20, 2009 at 4:58pm

REPORT by Pat Jack on February 16, 2009 at 5:18pm

I live and 'try' to work in one of the hospitality and culinary icons of America, New Orleans.

When I came to New Orleans in 2003 there were 20-50 new restaurant and hospitality jobs listed in craigslist.org every day.

Now there are on average 5 jobs listed every day and some of them are certainly weak and not legit.

Permalink Reply by Monte Smith on February 20, 2009 at 5:01pm

REPORT by Monte Smith on February 17, 2009 at 9:07am

Wal-Mart Stores hits $13.4 billion in 2008 net income

Submitted by The City Wire staff on Tue, 02/17/2009 - 7:40am.

It’s good to be the king of retail.

Wal-Mart Stores Inc. announced early Tuesday (Feb. 17) morning that its total revenue for 2008 (Feb. 1, 2008 - Jan. 31, 2009) was $405.6 billion, up 7.1% over 2007 revenue.

Net income for the year was $13.4 billion, up 5.2% over the $12.73 billion posted in 2007.

However, the company’s fourth-quarter revenue and net income was pressured by the troubles in the national economy. It’s net income in the quarter was $3.79 billion, down 7.4% from the fourth quarter of 2007.

Total revenue in the fourth quarter was $109.11 billion, up just 1.6% over the same quarter of 2007.

Wal-Mart officials, as they almost always are, were pleased with the financial results.

“Wal-Mart recorded the strongest sales result in its history in the fourth quarter, with $108 billion in sales,” said Mike Duke, Wal-Mart president and CEO. “Our performance relative to competitors was exceptionally strong in the fourth quarter and throughout the year. ... We finished the year with a strong balance sheet, record free cash flow of $11.6 billion and great inventory management.”

More....http://www.thecitywire.com/index.php?q=node/2965

Permalink Reply by Monte Smith on February 20, 2009 at 5:03pm

REPORT by Monte Smith on February 17, 2009 at 9:35am

I was talking to a neighbor this weekend. He is the Head Manager of a rent to own home furnishings and appliances store. The floor space of his store is in excess of 10,000 square feet. He was telling me that the last three months have been "killer" months in transactions. Approaching an 85K monthly average. Indeed, business has been so good that he says his store looks empty. So empty, in fact, that people ask if they're moving.

I wonder....what does this boom in rent to own mean?

Another item....

There is an old mall here in Fort Smith, AR that has been dying a slow and painful death for the last decade. While there is still enough life left in parts of it that it can manage to barely fog up a mirror...it is rapidly approaching its final death rattle. And in so doing it will become just one more broken dream in an area of town where the carcasses of broken dreams are many. BUT....

It appears that there is an aggregation of doctors that are considering taking this almost dead elephant (the mall) and resurrecting and reinventing it into some sort of medical facility. That, my friends, is promising news on many levels but disturbing on others.

Again, I wonder what does this indicate?

Permalink Reply by Monte Smith on February 20, 2009 at 5:05pm

Comment by Pat Jack on February 17, 2009 at 12:02pm

Rent-to-Own, means people who have lost their houses and are moving in to new Apartments need to get the stuff they pawned and hocked to survive before their battle was over, and they lost the house.

Also, people can't afford to buy furniture and houshold accoutrements.

Hubba, hubba, hubba let's see some activity in the outfield please, pass that ball around the bases before we throw back to Monty.

I'm liking this thread, great reporting, very factual with some avenue for discussion.

Very nice Monte.

Permalink Reply by Monte Smith on February 20, 2009 at 5:07pm

Comment by christopher tidman on February 18, 2009 at 4:57am

Rent to own, or rent with the option to own has cost my over $4000 on one occasion when the landlord went bankrupt and the agreement became invalid. These rent to own agreements are still banked in favor of the person with the wealth. If the interest rate was kept at zero, or if the interest was an income for the Government, bankruptcies would be eliminated. This would put a lot of lawyers and landlords (never liked those words) out of work, so it would have a devastating effect on a growth economy. The correction to a sustainable economy will be a rude wake up for a lot of people, so the transition will have to be made gradually. If everyone had an AlertPay account we could shut down the regular bricks and stone banks. That's just the way it is.

Permalink Reply by Monte Smith on February 20, 2009 at 5:04pm

REPORT by Pat Jack on February 17, 2009 at 11:54am

Actually, craigslist is averaging about 20 hospitality jobs ... every other day ... here in New Orleans, that's still an 80% drop since the height of recovery after Katrina.

Gustav hurt also, but ... it's the ECONOMY baby!

:-)

Permalink Reply by Monte Smith on February 20, 2009 at 5:09pm

REPORT by South Dakota Wind Energy on February 18, 2009 at 10:36am

Monte,

So you want to hear about how this economy is affecting us on an individual basis. Are you sure, you want to hear ALL the REAL affects?

I will start this reporting system with a comment of - - Pity is not what we are looking for. Here is the real truth.

As a consulting designer (self employed), my "small business" as been devistated by this downturn in the economy.

I have not used my office in months, no need to sit there using additional power.
Sinse I am on a lease that is still in affect until mid May, I must keep paying the rent for the office. At least I have a place to store my office furniture for now.

This is the affect on my business which afects my home as well. With no income in months and months, we have actually been reduced to accepting charity when offered. - - - You want to talk about ones pride being hurt!

We have been reduced from a successful small business to poppers in ths economic downturn. he rent is due and groceries about gone. My phone services have been shut off (fortunately Debbie has her own plan with another carrier). I only hope things improve before I lose the internet as well. Then I would be totally unable to conduct business should I find some.

Fortunately our vehicles are paid for, would sell mine but nobody wants a used Expedition. Debbies needs repairs so cannot be driven nor sold.

OK here is the good new, It doesn't matter that we are littrally screwed, WE WILL persevere and get through this DEPRESSION. (both economic and mental)

Are you sure you want to hear it like it is?

Monty and Debbie

(you can find us under the hwy 50 bridge over the Vermillion River next month)

Permalink Reply by Monte Smith on February 20, 2009 at 5:10pm

Comment by Mike Anthony Fernald Sr. on February 18, 2009 at 2:33pm

Hi Monty & Debbie

Im so sorry to hear this news, I know how you feel after three months of no work last week I landed a house to Drywall & Paint it came at just the right time, I know if I miss one mortgage payment they would be Knocking at my door. Please don't feel ashamed if you have to go to the Food Pantry or accept help from someone offering, Im sure they are giving from their Heart. If there is anything I can do within my means to help Please ask.

Can you do other work besides consulting designer. Over the years I have learned how to do many diff jobs just incase. God bless my Mom she told be to be good at whatever I do and learn how to do a little bit of everything just incase :o} and Pray a lot to keep in good spirits.

Thinking of you folks :o}

Mike

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