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BY CSA STAFF

Customer Preferences

Consumer preferences regarding flooring and other key elements of the in-store experience are highlighted in a new study by Chain Store Age and Leo J. Shapiro & Associates, Chicago. It is part of an ongoing series of consumer studies by the two companies.

Shoppers prefer carpeting to a solid floor by a 57% to 43% margin. Women and men divide similarly on the question.

Among shoppers who prefer a solid surface, wood beats tile two to one. Men are more likely than women to accept tile. Wood floors are particularly popular among younger shoppers. The older a customer becomes, the more apt he or she is to prefer carpeting.

Visit www.chainstoreage.com/specialreports to see how to order the 59-page study of lighting, fitting rooms and floors.

Affluent Shoppers Like Variety and Value

Affluent shoppers appreciate a good buy just as much as low-income shoppers do, but they can afford to be more selective when it comes to store choice, and product quality and variety. That’s the message contained in a new study by The Nielsen Co., which found that households with $100,000-plus annual income regularly shop at stores such as Costco, Sam’s Club and Target in search of a deal.

“Affluent-shopper DNA is all about product quality and variety, with value as an added bonus,” said Todd Hale, senior VP, consumer and shopper insights for Nielsen Homescan & Spectra, an operating unit of The Nielsen Co.

The affluent shop all the mainstream retail channels, but are more than twice as likely to patronize a warehouse club store. Lower-income households (earning less than $20,000 per year) are 74% more likely to shop at dollar stores, 42% more likely to patronize a convenience store and 21% more likely to frequent a supercenter.

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Home Depot Projects Lower Profit in 2007

BY CSA STAFF

Atlanta, The Home Depot Inc. said Wednesday it will pump $2.2 billion into improving its business this year even as it expects lower earnings and slim sales growth. Home Depot said that for fiscal 2007 it expects sales growth in the range of flat to an increase of 2%, a decline in comp-store sales in the middle single digit percentages and an earnings per share decline of 4% to 9%.

Including the effect of a 53rd week in its fiscal year, consolidated sales are expected to increase by 1% to 2%, and earnings per share are expected to decline by 3% to 8%, Home Depot said.

CEO Frank Blake told investors at Wednesday’s conference that like last year, “2007 also will be a difficult year.” But he said it will be a year of focus on Home Depot’s priorities and a year with “hopefully less noise.”

The “noise” was apparently a reference to the investor furor over former CEO Bob Nardelli’s hefty compensation in light of the company’s lagging stock price. Nardelli resigned in early January after six years at the helm of the company. He took with him a severance package valued at $210 million.

To improve its business, Home Depot said it will invest $2.2 billion this fiscal year in key priorities, including the opening of 115 stores. The investment includes $1.6 billion in capital spending and $600 million in expense.

Home Depot said it will recruit master trade specialists, simplify its staffing model, use more technology to aid customer service, and redesign employee compensation and reward plans. It also will invest in new merchandise and review its pricing strategies. Additionally, the chain will spend money on customer loyalty programs, direct-ship programs, credit programs and other specialty sales initiatives.

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Federated Plans Name Change

BY CSA STAFF

New York City, Federated Department Stores on Tuesday said it would ask shareholders to approve changing the company’s corporate name to Macy’s Group Inc. A vote to amend the corporation’s charter to accommodate the new name will be held in conjunction with Federated’s annual meeting on May 18. If approved, the company will be known as Macy’s Group Inc., effective June 1. The move comes on the heels of the company changing most of its store nameplates to Macy’s.

“Macy’s Group is the appropriate name for our company, given that about 90% of our sales involve the Macy’s brand. That said, Bloomingdale’s is—and will remain—a very important part of our company,” said Terry J. Lundgren, Federated’s chief executive. Federated Department Stores also said stronger sales at established stores and lower costs drove a 5% rise in fourth-quarter earnings. For the quarter ended Feb. 3, net income rose to $733 million from $699 million the prior-year period. Sales fell 4% to $9.16 billion from $9.57 billion, as the company shuttered 80 “duplicative” store locations. Comp-store sales rose 6.1% in the quarter.

During the quarter, Federated lowered its selling, general and administrative costs 11% to $2.31 billion.

The company also announced a $4 billion increase to its stock buyback program and said it will immediately repurchase 45 million shares for $2 billion under the plan.

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