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Retail Sales Rise 0.6% Retail sales rose 0.6% in February after falling a downwardly revised 0.8% in January, according to the Commerce Department. Economists had expected sales to increase more. Excluding automobiles, gasoline, building materials and food services, core retail sales were unchanged in February after falling an upwardly revised 0.3% in January and were up 3.1% year over year. Building materials sales rebounded and rose 2.2%. Online sales fell 0.1%. Core retail sales, which are mostly goods and not adjusted for inflation, correspond most closely with the consumer spending component of GDP. The retail sales report covers about a third of overall consumer spending and doesn't include services, such as travel and entertainment. The Home Depot THD is acquiring Texas-based roofing and landscaping supplies distributor SRS for $18.25 billion. The deal adds SRS’ 2,500 person salesforce and 760+ branches across the US to THD, increasing their total addressable Pro market by $50 billion dollars. The acquisition expands their offerings for Pro customers and allows THD to service landscapers, roofers and pool contractors. SRS was founded in 2008 and has since grown into one of the largest distributors of roofing materials and building products in the U.S. Between 2018 and 2023, the company quadrupled revenue to about $10 billion, according to an investor presentation by Home Depot. THD opened four new bulk distribution centers designed to allow Pros to order job-lot quantities and have products delivered right to the job site. The new distribution centers in Detroit, Los Angeles, San Antonio and Toronto will stock large, bulky merchandise like lumber, insulation, roofing shingles and more. They are expected to open during the first half of the year. THD has already opened similar pro-focused hubs across the US, and expects to have 17 of their top Pro markets equipped with new capabilities. In addition to the new supply chain facilities, they will offer localized product assortment specially tailored for each priority market, a dedicated sales force in each market and other benefits tailored to Pros’ needs. THD introduced Orange Apron Media, their rebooted retail media network. Previously known as Retail Media+, Home Depot says the retooled retail media network will greatly enhance user experiences. Orange Apron Media will focus on seamlessly integrating retail media offerings into THD’s partner advertisers’ digital strategies through owned and offsite channels, as well as digital screen testing in select stores. Retail media networks provide retailers’ brand partners with direct promotional access to shopper. Typically, the networks deliver targeted ads to segmented consumers via channels such as in-store digital displays, as well as online advertisements and connected TV. THD says that since being launched in 2018, THD’s retail media network has become the largest home improvement offering of its kind, providing suppliers with managed service and self-service media buying opportunities on owned and offsite media channels. The THD Foundation awarded $1 million to their veteran-led disaster response Team Rubicon to build a new trades training program. The program will provide students with on-the-job training in carpentry, electrical, plumbing and HVAC as they rebuild homes in communities impacted by natural disasters. Once trained, graduates will be equipped to work with general contractors and nonprofit organizations, which will help ease the chronic shortage of craftsman in the skilled trades. Lowe’s Lowe’s is working on a new program that would use AI to assist with seasonal inventory planning. Lowe’s recently debuted a new virtual reality design feature called Lowe’s Style Studio for Apple Vision Pro, which is controlled by a user's eyes and hands and allows customers to enter an immersive 3D kitchen scene. Walmart Customers are sometimes willing to trade saving money for saving time and confusion, according to Walmart U.S. CEO John Furner. Furner told the National Retail Federation State of Retail & the Consumer panel that, in addition to seeking out savings, customers are also opting to spend more time with loved ones and less time racing around from store to store in search of savings. Furner said that in some cases people are willing to trade off price for convenience and saving time. He believes that the parts of the service sector or the retail sector that find more innovative ways to serve people that save them time, take friction out of their lives and simplify decision-making will prosper. Amazon Amazon hosted their first ever Spring Deals Days event March 20 to 25. They had deals on seasonally relevant items such as outdoor furniture and clothing. The sale was open to all, but Prime members had access to exclusive promotions. Amazon is sinking $4 billion into AI start-up Anthropic, regarded as a leading force in generative AI. Anthropic is known for its foundation model and chatbot Claude, which competes with OpenAI and ChatGPT. Amazon will have a minority share in Anthropic and no seat on the board. Amazon’s top executives won’t get a cash pay increase this year; Amazon is weighting base salary increases to the segment of their workforce whose compensation is heavily tied to base pay. Executive compensation is often tied to performance and heavily focused on stock options. Total ad spend on Amazon is growing as Amazon takes ad dollars from Meta and Google. According to Business Insider, brands now spend between 12% to 15% of their Amazon sales to advertise on the platform, up from 8% previously. Brands are spending more on new formats, such as Prime Video ads and features such as Amazon’s data clean room. Business Insider expects Amazon’s US retail ecommerce sales to grow 10.5% this year, outpacing overall ecommerce growth by more than 2%. Ad revenues are projected to grow even faster at 26.6%. © Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.
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