Target fumbles during holiday playoff run
MINNEAPOLIS — Joe Namath he’s not. Target chairman, president and CEO Gregg Steinhafel assured investors last month that December comps would exceed November’s 1.8% increase, but then Thursday morning reported a disappointing 1.6% increase and a reduced profit forecast.
Namath, the former National Football League’s New York Jets quarterback, famously guaranteed victory over the heavily favored Baltimore Colts in Super Bowl III and then delivered on his guidance with a stunning 16-7 victory. Conversely, Target’s failure to live up to Steinhafel’s guarantee that fourth-quarter comps would be in a low to mid single-digit range, but above November’s 1.8% gain, caused the company to significantly reduce its fourth-quarter earnings per share forecast to a range of $1.35 to $1.43 from $1.43 to $1.53. The company did stick with a January comp forecast in the low to mid single-digit range, the same as in December and November. What makes Target’s December results even more disappointing is the company was up against a relatively easy prior-year comparison when comps increased just 0.9%. The 1.8% gain in November, also regarded as disappointing at the time, was at least a little more understandable as it came a against a prior-year comparison of 5.5%.
“December sales were below our expectations as growth in grocery and beauty offset softness in electronics and music, movies and books,” Steinhafel said. “Sales and traffic were strongest in the week leading up to Christmas as guests waited to shop for last-minute gifts. In 2012, we’ll continue to pursue initiatives designed to deliver compelling value and a superior shopping experience against the backdrop of continued slow and volatile economic growth.”
If there was a bright spot amid the company’s December showing it was the fact that the majority of the growth the company experienced was driven by an increase in average transaction size which suggest loyalty among core customers. Steinhafel also took the high road by not offering weather conditions as an excuse for sales weakness even though unseasonably warm conditions are believed to have negatively impacted Target and other retailers.
Additionally, the company noted that December comps in food increased in the low teens while comps in household essentials increased in the mid single digit range, with the strongest performance in beauty. Comps in apparel and accessories increased in the low single digit range, with the strongest performance in kids’ apparel and the intimate, hosiery and performance categories. The softest performance was in jewelry and accessories and shoes. Comps in hardlines decreased in the low single-digit range, with the strongest performance in toys and the softest performance in electronics and music, movies and books. Comparable-store sales in home furnishings and decor decreased in the low single-digit range, with the strongest performance in seasonal categories and the softest performance in decorative home.
ComScore tallies up holiday 2011 spending
RESTON, Va. — The November-December 2011 holiday season marked a new record in retail e-commerce spending, ComScore reported.
The season realized an overall gain of 15% versus last year, totaling $37.2 billion. This record was achieved with help from ten individual shopping days that surpassed $1 billion in spending, led by Cyber Monday — which ranked No. 1 for the second consecutive year — at $1.25 billion.
"With brick-and-mortar holiday retail estimated to have grown about 4% this year, it’s clear that e-commerce continues to gain market share from traditional retail due to the attractiveness of the Internet’s convenience and lower prices," ComScore chairman Gian Fulgoni said. "Consumers were especially attracted to the deals and discounts available through digital channels — particularly free shipping, which occurred on well over half of transactions this season. Despite their continuing price sensitivity, consumers felt a bit more comfortable opening up their wallets this year, although this appears to have occurred as a result of a decline in the savings rate. Nonetheless, it’s clear that, at least on the basis of top line growth, this was a Merry Christmas for many online retailers. What will remain unknown until retailers report their financial year end results is whether the aggressive pricing and free shipping offers came at the cost of lower margins."
Stop & Shop renews commitment to children’s health with new promotion
PURCHASE, N.Y. — As part of its renewed commitment to help shoppers keep their families healthy, Stop & Shop has launched a new promotion that can benefit kids’ schools.
Now through March 28, parents can help earn triple A+ School Rewards for their child’s school by purchasing Healthy Ideas labeled products. Healthy Ideas is the supermarket chain’s product labeling and shelf tag system, which was launched in September and is designed to customers find healthy options as they shop the aisles.
Stop & Shop also will continue to host Kid Healthy Ideas, a field trip experience that reinforces the nutrition and healthy living curriculum taught in local schools via a partnership with Field Trip Factory, along with its Passport to Nutrition program. On Jan. 24, Stop & Shop also will host its Child Obesity Forum at the Stop & Shop store on Whalley Avenue in New Haven, Conn.
"With increasing rates of childhood obesity in this country, Stop & Shop provides kids with fun and interactive ways to learn about proper nutrition and health," said Arlene Putterman, manager of public and community relations for Stop & Shop’s New York Metro division. "There is no better place to start making healthy choices than at the supermarket."