Retail Sales Rise 0.6%
Retail sales rose 0.6% in December after rising 0.3% in November, according to the Commerce Department. Economists had expected sales to decline 0.2%. Falling gas prices helped free up cash and holiday spending was brisk. Retail sales were up 2.2% year over year. Excluding automobiles, gasoline, building materials and food services, core retail sales rose a strong 0.8% in December after rising 0.4% in December. Building materials and garden supply store sales rose 0.4%. 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
Analysts have been bullish on The Home Depot, generally agreeing that the headwinds they faced last year are mostly behind them. Analysts believe THD stands to benefit from at least single-digit growth in home improvement spending. They expect THD’s Pro business segment to outperform DIY in a rebounding industry environment with solid wage growth and homeowner spending power from continued home price appreciation. Analysts also think that THD’s building Complex Pro initiative should help them gain Pro market share.
Lowe’s has eliminated several corporate positions in non-customer facing jobs. The move is most likely part of cost-cutting measures being implemented in response to a downwardly revised outlook. Lowe’s now expects a steeper-than-anticipated drop in same-store sales for this year as consumers continue to struggle with inflation and cut back on home improvement spending.
Walmart plans to close Store No.8, launched seven years ago as a way to test ideas that might not prove immediately profitable. Walmart said that many of the ideas incubated by the store have been implemented system-wide, while others have been tested and abandoned. Over the past seven years nearly 300 employees of Store No. 8 have moved on to other roles, and Walmart’s CFO says the responsibilities for innovation and growth are now shared by all segments. Store No. 8 was named after the store in Arkansas Walmart founder Sam Walton used to test new ideas.
Ace Hardware has been ranked as one of the top five franchises in the world and is first in their category for 2024 on the Entrepreneur’s Franchise 500 list. Ace moved up from number 7 to number 5 overall. Ace has also been named the No. 1 franchise opportunity in the 'Miscellaneous Retail Business' category for last three consecutive years.
Amazon delivered nearly 600 million more items from in-region fulfillment centers in the fourth quarter of 2023 than they did in the fourth quarter of 2022, an increase of 65%. Amazon focused on improving their delivery speed throughout 2023. They added 18 US cities to their same-day delivery options, bringing the total number of cities with same-day delivery to 110. The cities are served by 55 dedicated hybrid sites that are part fulfillment center and part delivery hub.
In a corporate blog post, Amazon said they’ll continue to optimize their operations network with the goal of shipping more products from locations closer to customers, which will help speed up deliveries and reduce the travel distance and stops per package.
Amazon is also setting a 2024 goal for its operations teams to get better info on what inventory is coming in and in what amounts, which will help them better meet regional needs and be more efficient.
Amazon plans to expand their Prime Air drone delivery program to a new US location and roll out their Sequoia robotic storage system to more fulfillment facilities.
Amazon invested in more than 100 new solar and wind energy projects in 2023, becoming the world's largest corporate purchaser of renewable energy for the fourth year in a row. Amazon's investments include the company's first brownfield. With more than 500 solar and wind projects globally, Amazon's portfolio is now big enough to power 7.2 million homes in the US each year. Communities where Amazon wind and solar farms are located experienced more than $12 billion in additional investment from 2014 through 2022.
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