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Walmart starts testing employee delivery

BY Deena M. Amato-McCoy

BENTONVILLE, Ark. — Walmart has a new delivery team dropping off customers' online orders — but they don’t work for a major shipping company or third-party delivery venture.

The retail giant is testing a new delivery concept that leverages its own store employees to drop off online orders right at customers’ front doors. The new program is designed to solve the challenges associated with the last-mile of delivery, which include “cutting shipping costs and getting packages to their final destinations faster and more efficiently,” said Walmart’s U.S. digital chief Marc Lore.

The opt-in program, which is app-based, enables employees to set preferences, including how many packages they can deliver, the size and weight limits of those parcels, and which days they’re able to make deliveries after their work shift ends. The app also tries to minimize the collective distance associates need to travel off of their commute when making a delivery.

“Associates are fully in control of their experience. If they don’t want to participate, they don’t have to,” he said. “They can choose to opt-in, and they can update those preferences at any time.”

The program is a strategic way to combat Amazon’s signature same-day delivery services. Between a network of 4,700 Walmart stores across the U.S. and more than 1 million associates, “our stores put us within 10 miles of 90% of the U.S. population,” Lore said.

“Now imagine all the routes our associates drive to and from work, and the houses they pass along the way,” he added. “It’s easy to see why this test could be a game-changer.”

The test is currently available in two New Jersey stores, and one in northwest Arkansas. Many orders are being delivered the next day.

Walmart associates are being paid to participate in the program, however, the chain did not reveal their compensation.

“Associates love having the option to earn more cash while doing something that’s already part of their daily routine,” Lore reported. “An unexpected benefit is they’re finding quicker routes home, thanks to the GPS built into our proprietary app.”

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Dollar General grows net sales 6.5% in Q1 amid planned growth

BY Deena M. Amato-McCoy

GOODLETTSVILLE, Tenn. — Higher customer spending and lower advertising costs not only boosted Dollar General’s profits, but contributed to better-than-expected first-quarter earnings.

For the period ended May 5, the discounter’s net sales increased by 6.5% to $5.61 billion, compared to $5.27 billion in first quarter 2016. Net income fell to $279.5 million, or $1.02 per share from $295.1 million, or $1.03 per share, a year earlier. However, this still beat the average analysts' estimate of $1 per share, according to Thomson Reuters.

Same-store sales increased 0.7% over the 2016 first quarter primarily due to an increase in average transaction amount, partially offset by a decline in traffic. Specifically, same-store sales were driven by positive results in the consumables and apparel categories, however these were partially offset by negative results in the home and seasonal categories. The net sales increase was also positively affected by sales from new stores, partially offset by sales from closed stores, the retailer reported.

“For the first quarter of 2017, I am pleased with our earnings results which reflect solid management of the business in a difficult retail environment as we overcame our most challenging comparisons from the prior year,” said Todd Vasos, Dollar General’s CEO. “We continue to execute on our focused strategy and implement our operating initiatives which we believe will improve customer traffic and transactions.”

The chain is also in growth mode as it put its store growth plan into motion. Coinciding with its plan to open approximately 1,000 stores and remodel or relocate 900 existing stores in fiscal 2017, in April, the Federal Trade Commission approved the chain’s proposed purchase of 322 store locations in 36 states from Dollar Express. The transaction is expected to close during June, and stores are expected to be converted to the Dollar General banner by the end of November.

The acquisition of these sites is expected to be incremental to the Dollar General’s 2017 new store growth. This will put the chain approximately 290 new stores over the prior guidance of 1,000 new stores for fiscal 2017.

Dollar General operates more than 12,500 stores in 43 states.

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Costco sales upward bound in May

BY David Salazar

ISSAQUAH, Wash. — Costco’s first monthly sales report since it beat Wall Street expectations with its Q3 results shows it continuing to right its ship after a difficult Q1 and Q2.

The company reported a 7% increase in net sales for the month, bringing in $9.86 billion, compared with 9.23 billion during the year-ago period. Comparable-store sales also rose for the month by 5.2% in the United States, with comps in Canada declining 2.2% and other international comps increasing 4.9%. Overall, Costco’s comps for May were 4.1%. Canadian comps saw the impact of changes in gas prices and foreign exchange, as they rose 3% when those factors were excluded.

In the 39 weeks ended May 28, Costco has seen net sales of $92.11 billion, an increase of 6% over the $87.18 billion in sales it reported for the same period last year. In the United States, comps for the year-to-date period are up 3.6%, with a 4.2% increase in Canadian comps and a 0.7% increase in other international comparable sales.

The company ended its May with 732 warehouses.

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