FINANCE

360pi: Meeting Amazon prices doesn’t guarantee success

BY Dan Berthiaume

Ottawa, Canada – Trying to stay competitive with Amazon.com on price may not be the best path to success for department store and discount retailers. According to pricing analysis of 1,000-plus household goods based on Amazon’s own assortment relative to Kohl’s, Walmart, Target and Macy’s conducted by 360pi and Retail Systems Research from March-June 2014, Kohl’s was consistently 30%-60% above Amazon’s pricing for this sample, but also reported the healthiest financials of the group.

In the same category and timeframe, Macy’s was consistently 20%-40% above Amazon until April 2014, then lowered its prices to be more competitive. 360pi/Retail Systems Research analysis indicates this likely contributed to missed second quarter expectations for Macy’s.

Meanwhile, Wal-Mart has consistently been underpricing Amazon in the household goods category since mid- January 2014. Together, Target and Walmart have closed the pricing gap with Amazon to within a 5% range in July, compared to a 30% spread in fall 2013. At the same time, however, Wal-Mart and Target have both experienced under-performing sales and financial losses, while Amazon is experiencing mounting pressure to improve profitability.

“We found this particular analysis fascinating because it puts a very large mirror on the pricing strategy that so many retailers fall prey to, the race to the bottom in which no one wins the gold medal,” said Jenn Markey, VP marketing, 360pi. “This holiday season will be a test to see which retailers will get it right by being responsive to the competition rather than reactive, and leverage a combination of loyalty programs with personalized offers and a unique assortment to deliver on the brand promise conveyed to their target shoppers.”

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...
FINANCE

Labor Day boosts Havertys business

BY Dan Berthiaume

Atlanta – Havertys Furniture Company Inc. reports its total written business for the third quarter to date of 2014 is up approximately 3.1% from the same period last year and written same-store sales are up approximately 3.5%. This increase was driven by a record setting Labor Day holiday weekend for which total written business was up approximately 7.4% from the same four-day period the prior year.

Havertys will enter the Rogers, Arkansas market with a new store scheduled to open in second quarter 2015. The 29,700-sq.-ft. showroom will be located in the Pinnacle Hills Promenade.

The company will also enter the Waco, Texas, market as part of a new phase of the Central Texas Marketplace development. The 31,500-sq.-ft. store is scheduled to open in third quarter 2015.

Havertys is expanding in southeast Florida with a store in Coconut Creek slated to open late this year. Havertys` expansion in this area also includes a 40,000-sq.-ft. store in Fort Lauderdale scheduled to open in second quarter 2015.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...
News

Walgreens looks good in August

BY CSA STAFF

Walgreens reported August sales of $6.4 billion, an increase of 3.6% from the same month in fiscal 2013. Total sales for fiscal 2014 were $76.4 billion, an increase of 5.8% from fiscal 2013.

Total front-end sales increased 2.1% in August compared with the same month in fiscal 2013, while comparable-store front-end sales increased 1.4%. Customer traffic in comparable stores decreased 1.7% while basket size increased 3.1%.

Prescriptions filled at comparable stores increased by 1.1% in August and increased 3.2% on a calendar day-shift adjusted basis. August 2014 had one additional Sunday and one fewer Thursday compared with August 2013. These calendar shifts negatively impacted prescriptions filled at comparable stores by 210 basis points.

August pharmacy sales increased by 5.4%. Comparable-store pharmacy sales increased 5% and increased by a calendar day-shift adjusted 7.1%. Calendar day-shift adjusted comparable-store pharmacy sales were negatively impacted by 180 basis points due to generic drug introductions in the last 12 months. Pharmacy sales accounted for 65.7% of total sales for the month.

Sales in comparable stores increased by 3.7% in August. Calendar day shifts negatively impacted total comparable sales by 140 basis points. Generic drug introductions in the last 12 months negatively impacted total comparable sales by 120 basis points.

Total sales for fourth-quarter 2014, which ended Aug. 31, were 19.1 billion, up 6.2%. Comparable store sales for the fourth quarter of fiscal 2014 increased 5.6%, while front-end comparable store sales for the quarter increased 1.3%. Prescriptions filled at comparable stores increased 3.9% in the fourth quarter and comparable pharmacy sales increased 8.2%.

Calendar 2014 year-to-date sales for the first eight months were $50.9 billion, an increase of 5.7% from $48.2 billion in 2013.

Walgreens stated on its Aug. 6, 2014, conference call with analysts that in the fourth quarter, it expected gross profit margin to be down a similar percentage year-over-year to what was experienced in the third quarter. This is due to ongoing gross profit margin pressures, including recent changes in the environment of the company's pharmacy business including ongoing generic drug inflation, reimbursement pressure and a shift in pharmacy mix toward 90-day prescription refills at retail locations and Medicare Part D. The company also pointed out that last year's fourth quarter included net gains from certain litigation matters, which reduced selling, general and administrative expenses by just under 1 percentage point.

Walgreens opened 23 stores during August, including four relocations, and closed five. On Aug. 31, Walgreens operated 8,309 locations in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. That includes 8,206 drug stores, 91 more than a year ago, including 70 net stores acquired over the last 12 months. The company also operates infusion and respiratory services facilities, specialty pharmacies and mail service facilities. Its Take Care Health Systems subsidiary manages more than 400 in-store convenient care clinics.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...