Retail Sales Rise 0.6%
Retail sales jumped 0.6% in March after falling 0.1% in February. Sales were up 4.5% from March 2017. Core retail sales, which exclude autos, gasoline, building materials and food sales, rose 0.4% in March after being downwardly revised to being flat in February. Sales at building material stores fell 0.6%and gasoline sales were down 0.3%, due to falling prices at the pump in March. Many economists continue to expect that the higher take-home pay that resulted from President Trump’s tax cuts will cause consumer spending to rise in the coming months.
The Home Depot
THD plans to hire about 1,000 technology employees this year, the biggest expansion in company history. The new hires will ultimately report to CIO Matt Carey and will focus on supporting an $11.1 billion, three-year strategic investment, which includes building new software and digital solutions for areas ranging from self-checkout to supply chain and website-focused personalization. About 90% of the software THD runs is already written by in-house engineers.
THD was defrauded out of more than $300,000 in a ticket-switching scam perpetrated by four Atlanta residents. The quartet allegedly switched or altered the prices of merchandise by changing the UPC so items could be purchased at a lower price and then returning the item for the actual higher retail price. The scheme targeted stores in Georgia, Florida, North Carolina and South Carolina. The four allegedly either covered the UPC labels with ones they removed from lower-price merchandise or used labels they had created themselves, a practice known as ticket switching.
Walmart is giving their website a modern makeover. The new site will reportedly be open for shopping in May. According to blog posts, the redesign will feature a new look and feel, with additional fonts and expanded colors. The site will also include more human elements, such as photography that focuses on real-life moments. There will also be more local and personalized elements. Marc Lore, CEO of Walmart US ecommerce, said WM will introduce additional specialty shopping experiences, including a fashion destination with department store Lord & Taylor, which will offer premium brands.
Walmart is reportedly looking at a closer relationship or even a merger with health insurer Humana. Walmart would be able to steer Humana’s millions of customers to Walmart stores and create new medical and wellness services in their millions of square feet of retail space and Humana would get access to thousands of brick-and-mortar locations to provide low-cost health services.
Walmart is teaming up with product delivery service Postmates as part of their plans to expand their delivery options. The service expansion will begin in Charlotte, North Carolina, with plans to expand in the near future. Postmates currently has a fleet of 160,000 couriers. Walmart teamed up with Uber and Lyft in 2016.
Sears CEO Eddie Lampert proposed that his hedge fund purchase the Kenmore appliance brand, Sears Home Services’ home improvement business and Sears Parts Direct Business after the company was unable to find other buyers. Sears has been exploring strategic options for the units for nearly two years. The sale of Kenmore alone could bring at least $500 million, according to analysts. Some experts say that Lampert is keeping the best parts of Sears and leaving the retail stores “doomed.” The agreement would require the approval of minority shareholders. In the past year Sears sold Craftsman to Stanley Black & Decker for about $900 million and struck a deal to sell Kenmore products and DieHard batteries on Amazon.
Ace tied for the top position in the retail category and ranked No. 7 overall across all industries, according to the 2018 Temkin Experience Ratings. Ace received an overall score of 82%, handily exceeding the retail industry average of 74%. This is the eighth consecutive year Temkin Group has been doing these ratings.
Westlake Ace Hardware named Joe Jeffries their new CEO. He’s succeeding Tom Knox, who retired at the end of March. Knox joined Westlake in 2014, shortly after Ace Hardware acquired the company, and held several leadership positions during his 22-year career with Ace. Jeffries was previously president and CEO of Westlake.
Giant Eagle will add Ace Hardware departments in five stores in Pennsylvania this summer. Giant Eagle operates more than 200 supermarkets in Pennsylvania, Ohio, West Virginia, Indiana and Maryland.
True Value members voted 85% to pass the deal that will turn over 70% of equity in True Value Company to ACON Investments. True Value members will keep 30% equity and receive a $196 million cash payout. True Value will cease to exist as a co-op and will begin to become a nationally branded wholesale distributor. Despite the dramatic change in structure, CEO John Hartmann said that the dealer-distributor relationship will remain the same for the near future.
Q1 sales rose 9% to $2.8 billion. Sales were driven by an 8% increase in volume, 2% from foreign exchange and 1% from higher sales of seasonal products, partially offset by a 1% decline in price and a 1% decline from the divestiture of a specialty business.
Sales in the US were up 8%, driven by 9% from volume, 1% from intercompany sales and 1% from higher sales of seasonal products, partially offset by a 2% decline in price and a 1% decline from the divestiture of a specialty business. Sales to customers in the Retail and Contractors end markets led the sales performance for the quarter.
First quarter sales for Canada dropped 2% in US dollars and 6% in Canadian dollars. The decrease consisted of a 13% decline in volume, partially offset by a 7% contribution from higher price.
Results were led by increased volume in their US business with both large and medium customers, with strong demand. Performance in Canada has improved, although they described the turnaround as “still in the early stages.”
Grainger raised their 2018 sales and earnings guidance, and now expects sales growth of 5% to 8%, compared to previous guidance of 3% to 7%.
Thomas Okray will become Grainger’s new CFO when Ron Jadin retires in May. Okray joined the company from Advance Auto Parts, where he was also CFO. He also has held multiple positions with Amazon, including in the global customer fulfillment business. Grainger has been trying to keep competitors from stealing away smaller customers with lower prices on maintenance and operations supplies. Grainger typically reserved their best deals for large, high volume industrial and institutional customers on long-term contracts, but online competition has forced Grainger to cut prices by up to 25% to retain customers.
Sales rose 43% to $51.0 billion in the first quarter, beating analysts’ expectations. Sales from Amazon Prime fees and other subscriptions grew 60% to $3.1 billion. Revenue from third-party sellers jumped 139% to $2.03 billion. Sales for Amazon Web Services rose 49% to $5.44 billion. Amazon’s global headcount is up 60% from a year ago to 563,100 full-time and part-time employees, thanks in part to a big influx of workers from Whole Foods. Net income rose to $1.6 billion, greatly exceeding expectations.
Amazon CEO Jeff Bezos writes an annual letter to shareholders. This year’s letter focused on many of the milestones Amazon has achieved, including the fact that Prime membership has surpassed 100 million globally, two-hour Prime Now delivery is now available in more than 50 cities and nine countries and Prime Free Same-Day or One-Day delivery is now in more than 8,000 cities and towns. Cyber Monday and Prime Day in 2017 were Amazon’s No.1 and No.2 biggest shopping events ever. In 2017, 5 million packages were shipped using Amazon Prime.
Amazon is acquiring Ring, a popular video doorbell company based in Santa Monica, California. Ring’s wifi enabled doorbells use motion detectors to know when someone approaches a door, then sends video and sound to the homeowner’s smartphone. The service potentially could potentially be combined with Amazon’s Key service, which gives Amazon Logistics delivery personnel permission to unlock a customer’s door for five minutes. Founder Jamie Siminoff created the original Ring product in his garage and launched it at the Consumer Electronics Show in 2011.
Amazon will be raising the annual price of Prime membership from $99 to $119 in mid-May, an increase of 20%. It was the first increase in the price of an annual subscription in three years. Amazon Prime members spend significantly more than non-Prime members. Amazon said they’re raising the price due to the rising costs of delivering the services Prime members expect.
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