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Retail Sales Rise 7.5% Retail sales rose 7.5% in June after surging an upwardly revised 18.2% in May following two months of record declines. Sales were up 1.1% from June 2019 and were less than 1% below pre-pandemic sales in February 2020. Non-store sales (including online shopping) slowed 2.4% but are still up more than 23% year over year. Clothing stores, auto sales, gasoline and restaurants accounted for most of the gains in June. Sales at building and supply stores fell slightly. Core retail sales, which exclude automobiles, gasoline and sales at building and supply stores and factor into calculations for GDP, rose 6.7% in June. Analysts caution that the big increases may come to a halt as states have begun tightening restrictions once again as coronavirus surges in much of the country. The Home Depot The Home Depot plans to accelerate their investments in the outdoor power equipment category and simplify their primary brands across the category. To that end, they are dropping the EGO line of outdoor power tools, owned by Chervon Group. They have been sold at THD since 2014, and are also sold at Ace Hardware. THD says they will continue to sell cordless brands Ryobi, Makita, DeWalt and Milwaukee and gas-powered products from Toro, Echo, John Deere, Cub Cadet, Honda and Troy-Bilt. A spokesperson said they will focus on the most relevant brands with the greatest adoption; they have been extremely pleased by the positive customer response to their premiere outdoor power brands. Lowe’s Lowe’s will spend another $100 million on bonuses for hourly employees in August in order to help associates with unforeseen expenses. Full-time hourly employees will receive a one-time bonus of $300 and part-time and seasonal employees will receive $150. Bonuses will be paid out on August 21. This matches payments Lowe’s made in March, May and July. CEO Marvin Ellison said no one could have anticipated how long we would be dealing with the pandemic, and wanted to help employees as school starts again in one form or another. Lowe’s is launching an exclusive partnership with EGO for their outdoor power equipment. EGO products will be available online and in select stores in fall 2020 and will roll out to all US stores nationwide by February 2021. Lowe’s stated that the battery-powered, cordless line of outdoor power equipment, including mowers, blowers, string trimmers, hedge trimmers, edgers, chainsaws and snowblowers, will match or exceed the performance of gas-powered equipment without the noise and fumes. Lowe’s will also begin offering select SKIL battery-powered outdoor power equipment in late 2020, including push and self-propelled mowers, leaf blowers, string and hedge trimmers and other products and accessories. SKIL and EGO are both owned by Chervon North America, which stated that their power tools and outdoor power equipment are sold by more than 30,000 stores in 65 countries. Walmart Walmart and Sam’s Club began requiring all customers to wear masks inside all stores in mid-July, a policy that quickly led to other retailers following suit. At the time of the order, about 65% of Walmart’s stores and warehouse clubs were located in areas where there was already some form of mask mandate. The CDC has stated repeatedly that a national mask mandate would significantly slow the spread of coronavirus. National grocery chain Kroger also announced a mask mandate. Starbucks, Best Buy and Kohl’s also have mandates in place. Walmart will create a new position of “health ambassador” at Walmart stores. They will be wearing black polo shirts and be stationed near the entrances to remind customers of the new requirements. They will also receive special training to “help make the process as smooth as possible for customers.” Walmart is reportedly close to launching a membership program that will go head-to-head with Amazon Prime. The new subscription program, dubbed Walmart+, will cost $98 per year and will give members same-day delivery, unlimited free shipping, deals on products before other customers get them and fuel discounts at Walmart’s gas stations. Walmart is trying to trademark both Walmart+ and Walmart Plus. Walmart will offer a Walmart+ credit card as part of the program. Walmart already offers a Capital One Walmart Rewards card with no annual fee that returns 5% cash back at Walmart.com, including grocery pickup and delivery. The move is seen as part of Walmart’s plan to compete directly with Amazon. The main benefit of the Amazon Prime Visa Signature card, exclusive for Prime subscribers, is a 5% return on Amazon and Whole Foods purchases. Amazon Prime costs $119 annually. Walmart is experimenting with cashierless checkout at a store in Fayetteville, Arkansas, near company headquarters. The system requires customers to handle purchases and payments themselves. If successful, Walmart will consider expanding it to other stores. Walmart says cashiers will be deployed to other areas and will also be available to help customers. Analysts noted that self-checkouts are notorious for malfunctioning, and customers often need assistance the first few times they try one. Ace Hardware Ace is hiring more than 30,000 workers across the US to help keep up with increased demand created by people investing in maintaining and improving their homes and outdoor living spaces, including the yard. Allison Dowell is the new president and general manager of Emery Jensen Distribution, a division of Ace Wholesale Holdings. She’ll be responsible for overseeing strategies and operational plans to grow the wholesale business. Ace is partnering with Medallia and Gallup to increase their ability to engage their customers and employees and take their customer service to what they describe as “the next level.” Medallia provides tech services and Gallup is one of the global leaders in analytics. Ace says the combination will provide them with “game changing insights and actionable advice that will help them drive organic growth. True Value True Value is moving to a hub-and-spoke supply chain from a point-to-point one, according to Lyndsi Lee, senior vice president of supply chain. The spokes will stock the fastest-moving items, while the hubs will carry almost all SKUs. Their goal is to optimize their network and deliver the best possible service to the stores. In April 2018, True Value Company transitioned from a co-op model to a pure-play wholesaler with about 90,000 product SKUS they deliver to 4,500 True Value stores around the world. They took their new model live in the Midwest in 2018 and in the Northeast in 2019. Their fill rates are topping 99% in the Midwest, and more than 600 retailers have joined True Value in the past few years. Lee believes that digitization, instantaneous transparency and using analytics to deploy inventory will be the supply-chain disrupting technologies of the not-too-distant future. True Value is converting part of one of its largest paint manufacturing facilities in Cary, Illinois, near Chicago, into a retail store. Paint Plus Hardware celebrated its grand opening in mid-July with lots of special deals. W.W. Grainger Q2 sales of $2.8 billion dropped 1.9% compared to Q2 2019. The sales decline was driven by an unfavorable product mix resulting from heightened levels of pandemic-related sales and decreased volume of non-pandemic products. Foreign exchange had a very small, negative impact of 10 basis points in the quarter. The second quarter of 2019 and 2020 had the same number of selling days. On the cost side they generated over $75 million of sequential cost reductions. Grainger said they gained significant share in a down market, and estimated that the MRO market declined between 14% and 15% in the US. Amazon Amazon reported record revenue of $89.8 billion in Q2, well above expectations. Amazon also recorded record profits even as they spent $4 billion between April and June to improve worker safety and stabilize their supply chain. They also paid out more than $500 million in bonuses to front-line employees and delivery partners. For Q3, Amazon is forecasting net sales of $87 billion to $93 billion, which would be an increase of 24% to 33% from Q3 last year and well above analysts’ estimates. A significant portion of Zoom’s network relies on Amazon Web Services, which reached $19.81 billion in sales in the second quarter, up 29% from Q2 last year. Zoom became the go-to virtual meeting platform as travel ground to a halt around the globe. Amazon Prime Day is reportedly being delayed for the second time, according to Business Insider. Amazon now plans to hold their immensely popular shopping event in October. Launched in 2015 as a 24-hour event, Prime Day was later changed to two days. Analysts estimate that Amazon Prime Day brought in about $7 billion in sales in 2019. An internal email that was leaked to the media points to Prime Day occurring the week of October 5, three months later than usual. Amazon is instituting new limits on how much inventory independent sellers can store in Amazon’s US warehouses. Their objective is preventing a large influx of products that are not big sellers during the holidays, such as products for Valentine’s Day or Easter. Amazon says sellers typically store about 6 weeks worth of products in Amazon warehouses. Amazon will allow employees to work from home until January, joining several major tech companies, including Google, that have already announced remote work policies through the end of the year. The policy applies to Amazon’s white collar workforce. Offices are technically open in states that allow it, but employees who want to go in have to clear it with their managers, have a temperature check before entering and adhere to social distancing requirements inside. Amazon is launching a new fleet of bigger, boxier trucks comparable to UPS and FedEx vehicles as part of their efforts to fix delivery delays caused by the pandemic. Amazon ordered more than 2,200 heavy-duty Utilimaster “walk-in” delivery trucks from Michang-based Shyft Group. Drivers showed Reuters training materials from safety and compliance consultants J.J. Keller & Associates. Trucks have been seen in Chicago and training is reportedly underway in Los Angeles. Amazon is expanding their Scout robot delivery program to Atlanta, Georgia and Franklin, Tennessee. While the program is in the pilot phase, Amazon says Scouts have already delivered tens of thousands of packages. The six-wheeled robots are the size of a small cooler and move at a typical walking pace. They can navigate around people, pets and obstacles. Amazon will require US sellers to share business information with customers in order to make it harder for fraudulent third-party sellers to do business on their website. Starting in September, Amazon will display the business name and address of US sellers on their Amazon.com seller profile page. Third party sellers may add additional information about their business and products to their profile, but Amazon recommends they not include email addresses in order to prevent spam and abuse. Amazon acquired the naming rights to a revamped arena originally built for the 1962 Seattle World’s Fair that will be the home of a National Hockey League expansion franchise and the WNBA’s Seattle Storm. Previously called Key Arena, Amazon will rename it Climate Pledge Arena instead of Amazon Arena. Amazon says they want it to be a constant reminder of the urgent need for climate action. Amazon also said tickets from the hockey and basketball teams will double as free public transit passes to promote use of public transportation for attendees, including the refurbished Seattle Monorail. The arena will be powered with 100% renewable electricity and at least 75% of the arena’s food program will be sourced locally on a seasonal basis, with unused food from events donated to local community food programs. © Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.
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