Retail Sales Rise 0.3% in May
Retail sales rose 0.3% in May after rising 0.4% in April, according to the Commerce Department. It was the second consecutive month sales increased. Consumer spending rose across most categories, although people spent less on gas, likely due to declining gas prices. Excluding automobiles, gasoline, building materials and food services, retail sales rose 0.2% in May after rising a downwardly revised 0.6% in April. Core retail sales correspond most closely with the consumer spending component of GDP. Core retail sales are mostly goods and not adjusted for inflation. 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 acquired appliance delivery and installation company Temco Logistics. Temco has served as one of THD’s largest appliance and bulky items delivery partners for more than a decade. THD said the acquisition is important to the appliance experience and delivering on their “customer first” objective to reduce complexity and make appliance deliveries more efficient. Financial terms were not disclosed.
THD announced that by 2028 more than 85% of outdoor power equipment will run on rechargeable battery technology instead of gas, particularly push lawn mowers and handheld outdoor equipment like leaf blowers and trimmers. Transitioning to rechargeable batteries for these categories will eliminate more than two million metric tons of greenhouse gases annually.
According to industry data, using a gas-powered lawn mower for an hour creates as much air pollution as driving 300 miles in an average car. Running a gas leaf blower for an hour creates the same number of emissions as a 1,100-mile drive or driving from Los Angeles to Denver.
THD says that innovating residential lawn equipment away from gas powered combustible engines will help make neighborhoods cleaner and quieter. They believe that it’s important to work with their suppliers to increase the number of innovative and sustainable products available to consumers.
JP Morgan Chase & Co. Retail Roundup:
CFO Richard McPhail represented THD at this conference for what facilitator Chris Horvers referred to as a “fireside chat.”
Housing wealth in the US has grown from $20 trillion in 2012 to more than $50 trillion today while mortgage debt has remained stable. Homeowners are in great shape, the unemployment rate is very low, and the rental vacancy rate is at an all-time low of just 0.6%, compared to an average of 1% - 2%.
They believe they will compensate for flat consumer spending by taking market share. When people improve their homes, they also improve their standard of living and the value of their homes.
They think of the year as two halves rather than quarters. The wet start to the spring affected sales, but they always get what they call the “bathtub effect.” That means spring always happens, it just depends on when.
McPhail reiterated that about half of the approximately $900 billion addressable home improvement market is accounted for by Pros, and they are committed to growing their share of this dependable market by delivering benefits that will help them get a share of bigger jobs and primary contracts.
THD wants to give Pros the ability to run their entire project through one supplier because that will save them time and money and simplify their lives. THD believes that is a unique proposition that they are in a unique position to deliver on.
Right now, the project pipeline is very fragmented; the average large Pro reports dealing with at least a dozen suppliers. THD believes that the program will also benefit small Pros, because everyone wants to be able to work more efficiently. For Pros, time is money.
At their recent store managers meeting they asked all the managers with 20 years of experience or more to stand up. They were overwhelmed when almost everyone in the room rose to their feet. That means the great majority of store managers have dedicated their entire career to the Home Depot. They believe that is unique in their sector and in retail overall. Many retailers have upped their starting wages, but much of the billion dollars they’ve invested in talent has gone to highly tenured employees; every hourly associate got a nice wage increase.
Walmart is taking advantage of Amazon Prime Days by kicking off a July promotion called “Walmart+ Week.” The event will last four days, from Monday, July 10 to Thursday, July 13. Starting at noon EST on Monday, members of the Walmart+ paid subscription program will have early online access to savings, including exclusive deals and limited time offers, on thousands of products across categories including electronics, home, toys and fashion.
Walmart+ Week will open to all Walmart customers at noon on Tuesday, June 11 before Amazon Prime Days officially kick off. The Walmart event runs one day longer, ending Thursday night.
Walmart also is offering exclusive limited time offers just for Walmart+ members during the event, including six months of unlimited Panera Sip Club membership for five dollars per month and a monthly $5 MyPanera reward, as well as “buy one, get one” tickets to all Six Flags parks.
Walmart Connect is testing in-store demonstrations that offer customers product samples as they walk through the store. Suppliers will also soon be able to seamlessly integrate demos into their campaigns across digital and in-store experiences.
Walmart Connect launched their in-store demo pilot in April 2023 with 25 stores. They are currently offering demos each weekend at more than 120 stores with the aim of expanding to 1,000 by the end of the year. Part of the goal of the test is to determine how to enhance the omnichannel experience, such as by pairing a demo cart with QR codes that link back to a curated Walmart.com landing page.
Walmart Connect is giving brands their first opportunity to directly target Walmart customers through the Walmart Radio medium. They’re introducing ad spots to the in-store Walmart Radio audio out-of-home (OOH) platform, giving suppliers the ability to purchase ads by region or by store to target key markets with campaigns.
Amazon Prime Days will be July 11 and July 12th and will have a greater focus on products for small business than in the past. Prime Day will officially kick off at 3:00 a.m. EST July 11, but Amazon was already leaking specials and offering pre-Prime Day deals in mid-June. Amazon is reportedly offering a new program that will allow Prime members to request an invitation to get access to certain deals that are expected to sell out.
Amazon will soon begin recruiting 2,500 small businesses to take part in the program dubbed Amazon Hub Delivery. Participating stores include everything from florists to gas stations. They will receive an average of 30 packages a day with instructions to “deliver to customers in your area when you have time during the day." No prior delivery experience is required. Businesses will be paid for each package they deliver in weekly direct deposits, up to $27,000 annually. If the average stands, that amounts to $2.50 per package. Stores in Alabama, Alaska, Arkansas, California, Florida, Iowa, Indiana, Illinois, Massachusetts, Minnesota, North Carolina, North Dakota, New Jersey, New York, Ohio, South Dakota, and Washington will be part of the pilot program.
The FTC is suing Amazon for allegedly duping millions of consumers into joining Prime in order to buy something and then making it practically impossible for them to cancel.
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