May sales for Fred’s rise as comps fall short
MEMPHIS, Tenn. — Fred’s on Thursday reported sales of $143.5 million for the four weeks ended May 28, up 1%. Comparable-store sales for the month rose 0.2%, compared with an increase of 3.5% in the same period last year.
“The combination of high fuel prices and historic weather events across our markets has caused our customers to become more conservative in discretionary spending,” Fred’s CEO Bruce Efird said. “This was evidenced by the decrease in average customer transaction amount in May, which was offset by the increase in positive customer traffic,” he said. “We were pleased with the performance of our Core 5 program in May, especially in pets, household supplies and pharmacy, as we continue to anticipate an increase in comparable sales in the range of 1% to 2% for the second quarter."
Fred’s total sales for the first four months of fiscal 2011 increased 2% to $627.9 million. On a comparable-store basis, year-to-date sales increased 0.8% on top of an increase of 2.5% in the same period last year.
Through May, Fred’s completed 79 of its planned 200 store remodels and upgrades. Additionally, one new store opened during the month.
FDA to examine possible link between drospirenone, blood clots risk
SILVER SPRING, Md. — The Food and Drug Administration is investigating a possible link between a class of birth control pills and a higher risk of blood clots in the women taking them, the agency said.
The FDA cited two studies linking birth control pills containing drospirenone to internal blood clots called venous thromboembolisms, or VTEs. Most birth control pills contain an estrogen and a progestin, such as drospirenone or levonorgestrel. Birth control pills containing drospirenone include Bayer HealthCare Pharmaceuticals’ Yaz, Yasmin, Beyaz and Safyral, as well as generic versions.
The studies compared women who took birth control pills with drospirenone and pills that contained levonorgestrel and found that those taking the former had a greater risk of VTEs than those taking the latter. However, the FDA said other studies had not found an increased risk, and it would evaluate the findings and release any new safety information as it became available.
Survey: Retail industry capital spending to rise 16% in 2011
NEW YORK — Capital spending for the retail industry is expected to increase 16% in 2011 to $42.5 billion, with all subsegments projecting double-digit percentage increases — except for mass merchants, whose growth is projected to rise 9% — according to a survey by Equity Research.
Although capital spending will be up, it remains well below 2007’s peak of $56 billion. Also, unlike these peak years when a significant portion of spending was dedicated to new store growth, the emphasis will be on maintenance, infrastructure upgrades, e-commerce and remodels.
“Overall, we believe a more rational capital strategy in terms of growth continues to be the right approach at this stage of the maturity curve for the industry,” the report said. “The key will be in managing the fixed asset base to further improve returns.”
In other findings:
In 2010, retail industry cash capital spending decreased 0.3% to $36.7 billion, as measured by Equity’s survey of 76 companies, compared with a 23.4% decrease in 2009, which was the largest decrease in the history of the survey, which dates back to 1991;
Food and drug retail led the decline in 2010, spending 24% less on a year-over-year basis. However, all other retailers actually increased spending on a year-over-year basis. Softlines increased spending by 32%, followed by mass merchants (+7%), hardlines (+5%) and mall anchors (+4%);
Total inventory turnover for the industry improved for the fifth consecutive year, and payables as a percent of inventory fell 115 basis points to 67.7% in 2010; and
Spending on merger and acquisitions increased 170% year over year to $1.4 billion in 2010, a dramatic rise in percentage terms, but absolute spending remained lower than at any other point in the survey’s history, besides the $515 million seen in 2009.