Retail Sales Fall 0.5% Retail sales fell 0.5% in February after rising an upwardly revised 0.6% in January. Control group retail sales, which exclude automobiles, gasoline and sales at building and supply stores and factor into calculations for GDP were little changed in February, well below expectations of a 0.4% increase. March retail numbers will likely plummet as travel was curtailed and conferences, restaurants, retail stores and sports were shut down across the country. However, online sales, grocery and home store sales may jump. Retailers Respond to CV19 Retailers across the country have implemented many new plans and procedures to help them continue to serve their communities and keep employees and customers safe. Many chains in what economists consider non-essential sectors such as clothing and décor, have closed their retail stores, but remain open for online business. Others carrying goods essential to sheltering in place or staying safe remain open, many with reduced hours. Many stores are opening later and closing earlier, as well as offering special hours designated for seniors and others at risk. Retailers are extending sick leave and paid time off and urging employees who are feeling ill to stay home. Chief execs of Target, Walmart, Walgreens and CVS pledged to open their parking lots for CV19 testing early during the pandemic, but the logistics of setting up these drive-through sites has fallen largely to the states. The four retailers have a combined total of 26,400 US stores, but as of the end of March only five sites were open. The State of Vermont’s Stay Home Order directed home improvement and other “big box” stores to restrict sales to only essential goods and stop selling “non-essentials,” including home and garden, paint, carpet and flooring and lots more. Stores must close aisles, restrict access or remove items from the floor. They are permitted to make non-essentials available via telephone and online ordering and may offer curbside pickup or delivery. The restriction is intended to reduce traffic in the stores and prevent overcrowding. Thus far other states have deemed home improvement stores essential businesses and have not attempted to restrict sales. Retailers Hiring In the midst of wide-spread shutdown, many businesses scrambling to meet demand created by CV19 are hiring. By the end of the month, Amazon had hired 80,000 of the 100,000 new employees it wants for fulfillment centers and distribution warehouses. Walmart is hiring 150,000 workers, Instacart wants to hire 300,000 more employees, CVS Health is adding 50,000 and Lowe’s is hiring 30,000. In addition, many companies that provide deliveries that are now in more demand, such as pizza chains, are hiring. The Home Depot THD announced they will be postponing planned spring promotions in order to avoid creating traffic jams in the stores, and they will be limiting the number of customers allowed in the store at any one time to 100. To help manage stores and stay open, safe and stocked during the pandemic, THD adjusted store hours to close daily at 6 p.m. in order to give employees more opportunity to stock shelves and deep clean. They noted that many items across their stores are in high demand and their teams are working hard to keep the supply chain moving smoothly and keep stores stocked and cleaned. THD also extended their paid time off program, issuing all full-time associates an additional 80 hours of paid sick leave or personal time and part-time hourly associates an additional 40 hours. The time can be taken anytime before the end of the year. Any associate diagnosed with CV19 or advised by health or government officials to quarantine will continue to be paid. They are also issuing thermometers to all associates in stores and distribution centers and asking them to perform health checks before reporting to work. Raymond James Investors Conference: THD was represented by Ted Decker, EVP Merchandising at this conference March 4, 2020. They had an excellent Q4, with positive comps in all 19 geographies in the US as well as in Mexico and Canada, and in each of their 14 product categories. Both their Pro business and consumer business was strong. They updated their formal guidance for 2020 to 3.5% to 4.0% comp sales growth. They are feeling excited about 2020, which is the third year of their three-year, $11 billion investment initiative as well as their 40-year anniversary. They will be investing about $5 billion in their stores to improve the in-store environment with LED lighting, painting, buffing floors, and installing new breakrooms, restrooms, front-end checkouts and signage packages. They are also making many other investments that will make the stores clean, safe, friendly and well-lit places. It will be the first time that all the stores will look and feel the same across the US. When they are considering new merchandising programs, they do a “proof of concept” test in ten stores, then do a actual test in about 30 stores. They use the learnings to finalize the concept and then roll it out. At Home Depot, product is king; people generally don’t come in just to browse. They are constantly collaborating with their suppliers to make sure they offer their customers innovative products. Innovation gives people a reason to trade up. Their global supply chain is in good shape for the first quarter, as products are largely already in the stores. The first two quarters are very big for them, with the spring and outdoor project business. Q2 is a very fluid situation. They have strong relationships with their supplier partners and for direct imports they are working very closely with their Asia factories. The good news is the ports are open and functioning; there have been issues getting workers back to factories after the Chinese New Year’s break. They continue to work on reducing shrink in their stores. One of the things they are doing is locking up high-value items like power tools. For a longer-term fix, they are working with suppliers to develop technology so the tools would not actually work until they were paid for and activated at checkout. That would make them much less attractive to thieves. Lowe’s Lowe’s CEO Marvin Ellison outlined the measures the chain was taking to protect customers and employees from CV19, including working closely with the CDC, health authorities and stores across the country to be sure they are taking all necessary preventative measures. Lowe’s has developed a new app that allows store managers to monitor foot traffic and limit the number of customers allowed in the store at any one time. Lowe’s will close stores at 7 p.m., one hour later than rival The Home Depot. Lowe’s has pledged $170 million in response to the CV19 pandemic, including $25 million that goes directly to support the need of Lowe’s employees, customers and communities, including critical products for medical personnel. Lowe’s has several programs in place for employees during the pandemic. Hourly associates received a special bonus at the end of March to recognize the long hours and help with unplanned expenses. They’ve extended emergency paid leave for up to four weeks for those at higher risk and will give people up to two weeks additional time off if employees have to deal with situations at home. Employees who are ill are being encouraged to stay home. At the end of March, CEO Marvin Ellison declined to share specific sales information with the media but said they have not seen a sharp move in the overall business, either positive or negative. Ellison said two-thirds of what they sell is not discretionary. In addition, they are seeing that as people have more individuals in their households around the clock, hot water heaters are being stressed, and many are being replaced. There is also more maintenance that is needed as things are used more frequently. Ellison feels that working on home projects is a great way for people to do something productive that also allows them to follow stay home orders. They have some products on allocation, so as soon as they are manufactured, they are shipped to them. Certain cleaning products and other high-demand items do sell out pretty quickly when they are stocked. But the investment they’ve made in their supply chain is helping them do a better job of keeping in stock. Lowe’s has limited the number of items per purchase on things such as cleaning supplies and masks to try and keep these items widely available. They are trying to plan for what they’ll do when America goes back to work again. Ellison has consulted with many health care and government officials, but they all agree what lies ahead is nothing anyone has ever experienced or navigated through. However, they are committed to being there for their customers and their employees. They have a command center and crisis management team helping them navigate. Walmart WM is limiting the number of customers in a store at any one time, allowing just five customers per 1,000 square feet of selling floor space, which results in an occupancy rate of about 20% of capacity. WM temporarily raised hourly wages by $2 per hour for entry level workers in ecommerce, matching similar moves to attract workers by Amazon and Target. Menards Menards apologized for mistakenly pricing face masks too high and blamed a placeholder price and rebate offer in their ad that was never changed to reflect reality. Attorney General Dana Nessel issued the chain a warning letter after her office received 18 complaints from consumers about overpriced bleach, face masks and other items. Investigators discovered that the store significantly increased the price of these products in the wake of intense demand from consumers. Price gouging was defined by executive order as raising the price of a product by more than 20%. Menards will offer customers who bought the overpriced masks a rebate. Ace Hardware Ace Hardware cancelled their Spring Convention in Chicago that was scheduled for mid-March due to CV19. Ace said the potential downside risk to bringing people from all fifty states and as many as 68 countries to the third-largest city in the US was just too great. Ace intends to ramp up a digital-convention experience to facilitate dealer buying needs and pay for any cancellation fees incurred by attendees. The International Housewares Show scheduled to take place in Chicago’s McCormick Place right after the Spring Convention was also canceled. Ace honored their 2019 Vendors of the Year. These vendor partners were recognized for helping retailers differentiate themselves through service, convenience and quality. Ace does business with more than 5,000 vendors. The 2019 winners delivered record-breaking 48% collective growth and provided Ace retailers with product and channel differentiation, unique and dynamic promotions, training and in-store support, high service levels and outstanding support for Ace’s Children’s Miracle Network. Milwaukee Power Tools was one of the vendors recognized. Ace Hardware won the right to use the name Ace Hardware Handyman Services to promote Ace’s fledgling home repair, maintenance and improvement services businesses. San Antonio handyman John Allen, who owns Ace Handyman Services, which he founded in 2015, sued Ace for trademark infringement. However, Allen was granted a temporary injunction that prohibits Ace from using the name in Bexar county, Texas, as well as the seven counties surrounding it, which means that the Ace franchisees in those counties can’t currently be listed on Ace’s website or receive referrals. Ace is expanding their partnership with Epicor Software Corp; more than 3,400 of Ace’s 5,300+ locally owned and operated hardware stores in approximately 70 countries currently run Epicor’s Eagle POS system. Epicor has been an Ace partner for more than three decades. True Value True Value will be manufacturing hand sanitizer during the CV19 pandemic. They are registered with the FDA as an over-the-counter drug manufacturer and have one of the largest paint manufacturing facilities in the country. They are converting part of their paint manufacturing capacity to the production of hand sanitizer and cleaning products. The plant, located in Cary, Illinois, will ramp up production of tens of thousands of gallons; the first several thousand will be donated to True Value stores across the country to arm their employees while they serve customers. They estimate that product will start shipping to stores in early to mid-April. They are sourcing raw materials so they can quickly increase production. Hardware stores are deemed essential businesses, and they intend to do their part to supply their customers and care for their employees. Amazon Amazon suspended inbound shipments of non-essential products from third-party sellers on Amazon Marketplace. Amazon will still fill and ship orders for these products, but new stock will not be added until April 5 at the earliest. High-priority categories such as health products and household goods will continue to ship as normal. Amazon Prime deliveries of non-essential items are taking longer than promised as Amazon prioritizes the delivery of in-demand essentials. Amazon cautioned Prime customers that deliveries were likely to take longer than promised before the pandemic. Amazon workers in at least 10 US warehouses tested positive for CV19, with the first cases reported in a fulfilment facility in hard-hit Queens, New York. There were subsequently positive tests across the country. An Amazon spokesperson said they are following all guidelines and taking extreme measures to ensure the safety of all employees. An Amazon employee in Illinois told reporters that as late as mid-March employees were still sitting together in lunch and break rooms. Among other tactics, Amazon has told employees who have CV19 or have come in contact with anyone with CV19 to stay home with two weeks of additional paid time off. Workers who are unable to come into work, or prefer not to, have been given unlimited unpaid time off. CEO Jeff Bezos says they are committed to keeping the goods flowing because they provide a vital service to people everywhere, particularly the vulnerable sheltering at home. Amazon’s Alexa can now give users in the US a basic CV19 diagnosis. Alexa will ask them a series of questions and then offer basic advice based on guidelines from the CDC. In many countries Alexa will sing a song for 20 seconds as people wash their hands. The Pentagon asked a federal court to give it 120 days to reconsider “certain aspects” of its decision to award an important cloud computing contract known as JEDI to Microsoft instead of to supposed front-runner Amazon. Amazon is suing the DOD over the decision, saying it was politically influenced and improper, because President Trump has openly criticized Amazon many times. Reportedly newly-installed Defense Secretary Esper was directed to review the Pentagon’s approach to the contract due to President Trump’s feelings about Amazon, although Esper denies any pressure. © Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.
Comments are closed.
|
|