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Retail Sales Fall 1.9% Retail sales fell 1.9% in December after rising just 0.3% in November. Results well below expectations were attributed to surging inflation and cases of the Omicron variant, both of which dampened end-of-the-year holiday shopping. Retail sales are adjusted for seasonal variations but not for inflation, so increases for 2021 were damped by historically high inflation. Sales at building material and garden supply stores rose 0.9%, one of the few categories that posted an increase. Online sales dropped 8.7% year over year as consumers returned to stores. Core retail sales plunged 3.1% and core sales for November were revised downward. Core retail sales correspond most closely with the consumer spending component of GDP. The National Retail Federation forecast that 2021 retail sales overall rose between 6.5% and 8.2%, which would beat the previous record growth rate of 6.3% in 2004. Holiday Sales Beat Forecast Holiday retail sales between November 1 and December 31 grew 14.1% over 2020 to $866.7 billion, according to the National Retail Federation (NRF). Sales easily beat NRF’s forecast of an 8.5% to 10.5% increase and set new records. NRF numbers include online sales, which grew 11.3% to $218.9 billion. NRF sales exclude automobile dealers, gasoline stations and restaurants. Holiday sales at building materials and garden supply stores rose 13.5%. Sales were strong despite the fact that consumers began shopping in earnest in October, but October sales were not included in the holiday sales recap. Retail sales for December were down 2.7% seasonally adjusted from November but were up 13.4% unadjusted year over year. NRF numbers come from US Census Bureau data. According to retail consultancy Customer Growth Partners, which has tracked holiday sales since 2001, more than half of the overall sales growth was driven by 7% consumer price inflation, the highest in 40 years. Organic growth accounted for 6.7% of the overall increase. However, according to CGP, it was still the strongest organic growth in the past twenty years. The Home Depot THD promoted Edward “Ted” Decker to President and CEO, effective March 1 from his current position of President and COO. Decker has been with THD since 2000 in a variety of leadership roles. He succeeds Craig Menear, who was tapped for the CEO position in 2014 when the very popular Frank Blake retired. Menear will continue as Chairman of the Board. Menear said that Decker, who has grown with the company and now leads day-to-day interconnected operations, offers the perfect blend of the art and science of retail that is exactly what is needed in the next phase of growth for The Home Depot. Environmental non-profit CDP gave The Home Depot a score of A- for their actions to cut carbon emissions and reduce climate risk. It was the fourth consecutive year that the company has received an A/A- rating for its climate change efforts. The North America regional average is a C. Every year, thousands of companies disclose data about their environmental impacts to CDP for independent assessment. Scoring enables companies to move forward towards environmental stewardship through benchmarking and comparison with peers and to continuously improve their climate governance. Lowe’s Lowe’s is known for allowing dogs in their stores, and now has teamed up with Petco Health and Wellness on a store-in-store model. Lowe’s + Petco will carry an assortment of high quality nutrition and health and wellness products as well as supplies such as beds, accessories and treats. Mobile services such as Vetco vaccination clinics, microchipping, grooming and prescription pest prevention will be available at select times and locations. Pilot stores will be staffed with Petco employees during peak hours. An internal research study showed that families have added more than 11 million pets to their households since the pandemic began. Lowe’s already owns the Stainmaster PetProduct carpet brand and will develop additional product offerings. Walmart Walmart announced several executive changes. Casey Carl, executive VP and chief omnichannel strategy ecommerce officer, is leaving Walmart at the end of February. He will be replaced by Tom Ward, currently a senior VP focused on last mile delivery. Ward has championed a number of innovative delivery initiatives, including autonomous vehicles and drones. Carl is leaving Walmart after less than two years on the job, having joined the company in September 2020 and taking over for veteran Marc Lore in January 2021. Prior to joining Walmart, Carl spent 20 years at Target, leaving the chain in 2017 after serving nearly three years as chief strategy and innovation officer. Walmart did not comment on the reasons for his departure or his future plans. Carl's departure is the latest in a series of recent leadership changes at Walmart. The retailer's chief merchandising officer, Scott McCall, is retiring and will be replaced by the current head of the US grocery business. In November, Walmart announced that CFO Brett Biggs would step down in January 2023. He will stay with company through 2022 while his successor is named and settled in the role. Walmart is testing phase two of their massive store redesign project that began about the same time as the pandemic. Phase one was designed to make stores easier and more efficient to shop in. Phase two is designed to give people reasons to come in, stay and browse. Taking a page from Target’s book, Walmart will include large thematic displays that show off some of Walmart’s recent partnerships, including GapHome and Queer Eye, and encourage people to look at a range of products. There will also be areas dedicated to displaying items such as baby strollers, vacuum cleaners and kitchen products in ways that encourage people to see, touch and feel products. Interactive screens and QR codes will be everywhere to make it easy for shoppers to learn more, see products they are interested in in other styles and colors and even order online if they prefer. Walmart may begin employing visual merchandisers at stores, something they’ve never done before. The test store is in Springdale, Arkansas, close to corporate headquarters. Ace Hardware Ace has earned high scores in several recent surveys and studies. Ace ranked number one in the home improvement/hardware category and number 16 overall, according to a survey conducted by New York-based Incisiv that analyzed brick-and-mortar, mobile and online consumer service experiences at 500 US retailers. In addition, Reputation, which analyzed 3.7 million Google reviews to generate “Reputation Scores” for retailers, ranked Ace highest for both consumer sentiment and shopper engagement. And Quebec-based Orckestra’s fifth annual study of omnichannel capabilities ranked Ace as third overall of 100 retailers considered, and highest in the home improvement category. Bill Kiss, Head of Digital at Ace, said that their website is the front door to their brand, since most consumers start their shopping online. Ace Hardware was the 13th fastest-growing US-based retailer between 2019 and 2020, according to a report by Total Retail. Revenue at Ace grew 27.9% to $7.762 billion over the period, or 27.9%. That’s highest in the hardware and home improvement category and fourth overall among combination online and brick-and-mortar businesses, according to Total Retail’s Top 50 ranking. Ace noted they have focused on having the brands customers want in stock and giving consumers many choices, including in-store, online, curbside and delivery from their local Ace store. Total Retail reported that of the 150 retail companies it tracked over the period, only 73 posted positive year-over-year sales. Entrepreneur magazine ranked Ace Hardware among the top one percent of franchise business opportunities in the world, according to their 2022 "Franchise 500" survey. Ace ranked 12th out of 1,177 franchise businesses analyzed and of 500 ranked. Entrepreneur's Franchise 500 is the oldest and most comprehensive franchise company ranking in the world, assessing unit growth, financial strength, stability, and brand power. Ace ranked first in the "Miscellaneous Retail Businesses" category. Overall, Ace improved their ranking from 23rd overall in 2021. © Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.
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