FINANCE

Chicago mayor seeks approval for third Walmart

BY CSA STAFF

Chicago Mayor Richard Daley asked aldermen on Thursday to support a third Walmart store in Chicago, part of Wal-Mart Stores’ much-publicized plan to open stores across the city and further penetrate urban markets.

According to a report by the Associated Press, Daley said a third store located on the city’s South Side would bring much-needed jobs and stimulate the economy. Daley downplayed discussions about years of controversy over fair wage issues and competition with small businesses involving the current Walmart store on the West Side and one slated to open in 2012 on the South Side.

“You have to be bringing jobs,” he said at Thursday’s news conference. “It has a positive rippling effect on the community. There is nothing wrong with this.”

Daley doesn’t need City Council approval for the third store, but he said he wanted the support of city leaders. The matter is due before a committee on Friday.

The first store, which opened in 2006, was fought by labor unions and small-business owners who claimed unfair wages and long-term adverse effects, such as running local stores out of business. And in June, the City Council approved a second store to open in 2012 on the city’s South Side. Labor leaders dropped their opposition when Wal-Mart Stores agreed to pay starting wages at $8.75 an hour, along with raises of 40 cents to 60 cents an hour after the first year. Illinois’ minimum wage is $8.25 an hour.

Daley said he did not have detailed information on the third store, including when it would open. But he said Wal-Mart would pay the higher-than-minimum wage rate.

The world’s largest retailer has announced plans to open several dozen stores across the city in a five-year plan called “Chicago Community Investment Partnership.” The goal is to create 12,000 jobs and generate $500 million in tax revenue.

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Safeway quarterly results in line with expectations

BY CSA STAFF

PLEASANTON, Calif. Safeway reported net income of $141.3 million (37 cents per diluted share) for the second quarter of 2010 compared with $238.6 million (57 cents per diluted share) for the second quarter of 2009. The second quarter of 2009 included a $57.8 million tax benefit (14 cents per diluted share) from the resolution of a tax matter.

“Our second quarter results were in line with our expectations, and we are encouraged by our volume trends in the quarter,” said Steve Burd, chairman, president and CEO. “However, deflation continues in price per item and is not expected to significantly improve until the fourth quarter. As a result, we have lowered our expectations for the balance of the year.”

 

Total sales were $9.5 billion in the second quarter of 2010, essentially flat compared with $9.5 billion in the second quarter of 2009. A higher Canadian exchange rate and higher fuel sales were largely offset by a 2.5% decline in identical-store sales, excluding fuel, the company reported.

Safeway is updating guidance for the year to $1.50 to $1.70 earnings per diluted share and non-fuel ID sales of -1% to -1.5%. The company said it continues to expect cash capital expenditures of approximately $0.9 to $1.0 billion and free cash flow of $0.9 to $1.1 billion.

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Amazon.com 2Q sales up 41%

BY CSA STAFF

SEATTLE Amazon.com announced that net sales increased 41% to $6.57 billion in the second quarter, compared with $4.65 billion in second quarter 2009. Excluding the $48 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 42% compared with second quarter 2009.

Net income increased 45% to $207 million in the second quarter, or 45 cents per diluted share, compared with net income of $142 million, or 32 cents per diluted share, in second quarter 2009.

   

“We’re seeing rapid growth in Kindle, Amazon Web Services, third-party sales, and retail. We’re also encouraged by what we see in mobile. In the last twelve months, customers around the world have ordered more than $1 billion of products from Amazon using a mobile device,” said Jeff Bezos, founder and CEO of Amazon.com. “The leading mobile commerce device today is the smartphone, but we’re excited by the potential of the new category of wireless tablet computers. Over time, tablet computers could become a meaningful additional driver for our business.”

For the third quarter, Amazon.com expects net sales to be between $6.9 billion and $7.6 billion, or to grow between 27% and 40% compared with third quarter 2009.

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