Each week, we highlight five articles of interest focusing on the retail/consumer space. Enjoy.

Back-to-School Gives U.S. Retailers a Boost Click to Open PDF

Not one retailer mentioned last year’s negative impact of Hurricane Irene. September 2012 will be a much more difficult comparison. Of course, these monthly articles always seem to have a ridiculous comment from someone that feels the need to be quoted in the WSJ. This month’s “rocket science contributor” is Nancy Liu at Kurt Salmon. She suggests that there was a “desire for newness as adults looked to refresh their wardrobes.” We’re not sure how she came up with that thesis (aka, bologna), but at least she got her name in the paper.
Date Published: Thursday, August 30, 2012
Source: WSJ

Soaring Food Prices Put Restaurants in a Bind Click to Open PDF

Sure, there are many restaurant chains that operate on thin margins (see quote from Darren Tristano from restaurant consulting firm Technomic). But, many restaurants have greatly expanded their profit margins over the past 3-4 years via operational efficiencies.
Date Published: Tuesday, August 28, 2012
Source: WSJ (more…)

Each month, we provide our clients an early analysis of sales disclosures on sales release Thursday. Below, are a few bigger picture thoughts that we published earlier this morning prior to the opening bell.

August 2012 Lapped Hurricane Irene. Sept 2012 to Provide Better Gauge of Strength.

• See attached for the full report and various comp ‘stack’ presentations.
• Big picture, comp sales in August 2012 were well above expectations. But, it’s worth a reminder that last year’s comp sales were negatively impacted by Hurricane Irene. Simply, consensus sell-side expectations were too low.
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Each week, we highlight five articles of interest focusing on the retail/consumer space. Enjoy.

What the Sound and Fury Over Best Buy May Signify Click to Open PDF

Does anyone really believe that Mr. Schulze has a legitimate ‘strategy’ to rescue BBY? That said, great review of the motivations behind the actions of both BBY and Mr. Schulze.
Date Published: Thursday, August 23, 2012
Source: New York Times

Wal-Mart Extends Christmas Layaway Service Click to Open PDF

This subject gets more wasted ink than any other subject in retail over the past year. The fact is that the layaway service is not material to WMT’s top-line. But, reporters and the media focus so much attention on it.
Date Published: Monday, August 20, 2012
Source: WSJ (more…)

Reminder: We like to look at the U.S. Census Bureau/Commerce Department data on a comp basis (year-over-year change). Hey, it’s government data, so caveat emptor. See attached.

Big picture, our favorite measure of “what’s happening at the mall” (excludes Motor Vehicles, Gasoline, and Building Materials) suggests a +3.9% year-over-year sales improvement in July 2012 versus LY. This represents an acceleration versus the +3.2% growth rate in June 2012.

This particular metric’s 4-year growth rate also accelerated in July 2012 (+9.5%) versus the 4-year growth rate in June 2012 (+8.7%).

The most compelling category specific storylines in July 2012 were:

• July 2012 represented the 33rd consecutive month of positive year-over-year growth for our favorite “mall” measuring stick.

• How strong was July 2012 relative to June 2012? Every category reported a sequential year-over-year sales acceleration in July 2012 versus June 2012.

• Almost all categories reported a slower year-over-year growth rate in July 2012 than the YTD rate. Bucking that trend (i.e. stronger year-over-year growth in July 2012 versus YTD) were Furniture & Home Furnishing Stores, Sporting Goods, Hobby, Book & Music Stores, Motor Vehicle & Parts Dealers, and Non-Store Retailers

• This year’s dramatic sales growth deceleration in the Health & Personal Care Stores category continued in July 2012. In each May 2012, June 2012, and July 2012, the category’s monthly year-over-year growth rates were the lowest since AT LEAST 1998.

• Building & Garden Equipment Supplies Dealers again reported a disappointing growth rate in July 2012. Following impressive year-over-year growth in the calendar Q1 2012 period, sales growth in this category dramatically slowed in calendar Q2 2012 and July 2012

  The category’s year-over-year growth rate in July 2012 was materially lower than calendar Q2 2012.

• Unlike Building & Garden Equipment Supplies Dealers, Furniture & Home Furnishing Stores continues to report relatively strong sales growth versus LY.

Recent monthly “Big Picture — what’s happening at the mall” year-over-year results:

January 2012 February 2012 March 2012 April 2012 May 2012 June 2012 July 2012

+5.4% (+10.7% 2-year) +5.3% (+10.5% 2-year) +5.0% (+10.3% 2-year) +3.9% (+10.4% 2-year) +4.3% (+10.7% 2-year) +3.2% (+10.2% 2-year) +3.9% (+11.4% 2-year)

Each week, we highlight five articles of interest focusing on the retail/consumer space. Enjoy.

Bad Weather Weighs on Food Prices Click to Open PDF

Corn is up +47% since May 31. Soybeans are up +26% over the same period. Also, it’s not only the drought here in the U.S. A hot summer in Russia (wheat) and excessive rain in Brazil (sugar) are also wreaking havoc.

That said, it’s worth noting that healthy supplies of wheat and rice are mitigating the impact of higher corn/soybean pricing.
Date Published: Thursday, August 9, 2012
Source: WSJ

Apparel Imports Slip in June Click to Open PDF

Apparel imports fell -4.7% in June 2012 versus LY. Eight of the top 10 apparel suppliers to the U.S. reported a year-over-year decline. The 2 countries that showed a year-over-year increase in apparel imports to the U.S. were Vietnam and Pakistan.

Interestingly, textile imports rose +4.1% in June 2012 versus LY.
Date Published: Thursday, August 9, 2012
Source: WWD (more…)