Deloitte Forecasts Modest Holiday Spending Increase
New York City Deloitte Research revealed on Tuesday its 2008 spending forecast for the holiday season, which predicted only a modest increase in holiday sales over the 2007 season.
“Higher energy and food prices are making a dent in consumers’ wallets, and the dramatic drop in home-mortgage refinancings has dried up a substantial source of discretionary funds,” said Carl Steidtmann, chief economist with Deloitte Research, a subsidiary of Deloitte Services LP.
“In addition, continued softness in the housing market, rising unemployment claims and a volatile stock market are negatively affecting consumers’ perceptions of the economy, their wealth, and their ability to spend. In all, these factors will likely lead to a challenging holiday season.”
Deloitte’s Retail Group expects holiday sales, excluding motor vehicles and gasoline, to increase 2.5% to 3.0% during the November-to-January period, less than last year’s 3.4% increase, and one of the smallest gains since 1991’s 2.0% rise.
“Consumers are in a cost-conscious mood and more focused on value than ever before,” said Stacy Janiak, Deloitte’s US Retail leader. “Retailers that can offer unique value propositions—in terms of price, customer service, loyalty programs, or some other means—will be best positioned to attract the consumer’s attention.”
Janiak also commented that retailers appear to be well-positioned heading into the holiday season, with low inventory-to-sales ratios and payrolls and other costs that are in check.
Walgreens throws hat into Longs buyout ring
DEERFIELD, Ill. Walgreens has proposed to acquire all of the outstanding shares of Longs Drug Stores for $75 per share in cash for a total purchase price of approximately $3 billion including the assumption of debt. The offer, which is subject to standard regulatory approvals and the completion of due diligence, represents a $3.50 per share premium over the cash purchase price to be paid to Longs shareholders under the proposed acquisition by CVS/Caremark announced on Aug. 12.
“We believe the combination of Walgreens and Longs is a highly compelling transaction that is superior to the pending transaction with CVS/Caremark, accelerates Walgreens expansion into high growth markets and delivers meaningful cost synergies,” said Walgreens chairman and ceo Jeffrey Rein.
Walgreens is working with Lubert-Adler Management Company, LP and Klaff Realty, LP to address any potential store sales in connection with the transaction.
Goldman, Sachs & Co. is serving as financial advisor to Walgreens on this transaction, and Weil, Gotshal and Manges LLP is serving as its legal advisor.
Netflix, Amazon to run widgets on Yahoo!
SUNNYVALE, Calif. Yahoo! is allowing companies like Apple and Netflix to add widgets to its pages enabling users to manage their queue of movies from those company without leaving the Yahoo! page they’re on.
According to reports, the changes, which are the first major alterations to Yahoo’s pages in more than two years, will take place over the next few months.