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Does Social Responsibility = Retail Opportunity?

BY Jeff Green

In case you missed it, one of America’s biggest and most iconic brands was in the news recently for something other than the latest sales figures: Wal-Mart announced an ambitious plan to hire approximately 100,000 veterans over the next five years.

The plan would give veterans who have been honorably discharged since the beginning of 2012 priority consideration for available Wal-Mart jobs within 50 miles of their homes (provided that job applicants are able to perform the work, and to pass a drug test and a criminal background check). In a demographic with rates of unemployment dramatically higher than the national unemployment rate, that seems like a pretty big deal, or at least a big step in the right direction.

While I see this as a laudable move by Wal-Mart, and an initiative that hopefully encourages other retailers to implement similar programs, it made me consider the social consciousness expected from retailers today. These days it seems like more and more brands are rolling out a wide range of charitable initiatives, “green” practices and community outreach programs. But why? Are they doing it out of the goodness of their hearts — because they are responsible corporate citizens and it is the proverbial “right thing to do?” Or (to take a more cynical view) are they reaching out because in today’s retail marketplace, socially conscious behavior can be an effective marketing tool, brand-builder, and even reputation maker? Perhaps it is a little bit of all of these.

We tend to equate social consciousness in the retail world more with names like Chipotle and Ben and Jerry’s than with a huge, value-oriented retailer like Wal-Mart. The reason has a lot to do with how we, as a society and as consumers, think about and define socially conscious behavior. Wal-Mart is a great example of how a retailer’s approach to social issues can vary dramatically depending on your perspective. For example, is it commendable that Wal-Mart provides a large number of jobs and sells decent goods at an affordable price? Or is that overridden by the fact that Wal-Mart is often criticized for providing a lackluster suite of benefits and health coverage to its employees? And should we find it any less admirable that Wal-Mart is providing jobs to veterans once we realize that the lion’s share of those positions will pay well under $30,000 a year? Ultimately I think trade-offs and compromises are always going to be present when it comes to these issues, and our view of how socially responsible any retailer actually is will largely depend on what our personal priorities might be. It is also tough to change the way the public perceives you on these issues. Very few people realize that, for example, Wal-Mart has been a pioneer in implementing a wide range of green and energy efficient standards, including the early adoption of compact fluorescent light bulbs.

No matter where you come down on these issues, one aspect of social consciousness in the retail world is indisputable: consistently responsible behavior pays for itself. The publicity alone is a significant factor: the stories about a big social program like Wal-Mart’s veterans hiring initiative will not only reach a wide audience, but have the potential to generate a great deal of good will and even expand their customer base beyond their traditional demographic. To be clear, I don’t think these kinds of programs are simply marketing ploys — they can add real value and vitality to a brand. With the proper follow through, I believe that retailers who make socially responsible behavior a regular part of their business model will realize a tangible benefit in terms of the way their brand is perceived. Ultimately, of course, that translates to a more robust bottom line. It’s no longer a small niche to be a “green” retailer or a socially conscious brand: Every retailer must consider the social implications of their business and community actions. More and more are taking this step every day.

In the long run, I believe that’s a good thing — both for retailers and for the communities they serve. Do you agree retailers no longer have a choice — that they must tackle issues of social responsibility? Is this an added burden or an opportunity for brick-and-mortar stores to show their value in local communities? We’d love to hear your thoughts through a comment below or you can contact me directly at [email protected].


Click here for past columns by Jeff Green.

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Mar-03-2013 12:34 pm

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Comps moderate at TJX and Ross

BY CSA STAFF

Same store sale decelerated for The TJX Companies and Ross Stores during January even though both companies increased their full year profits forecasts.

TJX, operator of Marshalls and T.J. Maxx stores, said comps increased 3% during the period ended January 28. That figure was better than expected, but less than half the prior year gain of 7%. Sales for the five week period ended February 2 increased nearly 36% to $1.9 billion due to the inclusion of an additional week.

Comps for the quarter increased 4% and for the year were up 7%. Sales for the 53 week fiscal year increased 12% to $25.9 billion.

"Customer traffic once again drove this month’s comp increases across the board, as consumers continue to be drawn to our great values on great fashions and brands," said CEO Carol Meyrowitz. "As we begin a new fiscal year and transition into spring, our merchandise mix is extremely fresh and we are confident we will continue to attract more U.S. and international customers with our tremendous values."

TJX did not provide sales guidance for the coming year.

Ross Stores said same store sales increased 4% for the four week period ended January 28 while sales total sales for the five week period ended February 2 increased 39% to $672 million, due to the inclusion of the additional week. For the quarter ended January 28, same stores sales increased 5% while sales for the 14 week period ended February 2, increased 15% to a little less than $2.8 billion.

Results for the month and quarter were better than the company expected as the company continues to drive solid revenue growth by offering terrific assortments of compelling name brand bargains that resonate with today’s value-focused consumers, according to vice chairman and CEO Michael Balmuth.

"We are extremely pleased with our outstanding sales and estimated earnings growth for 2012 that continues to be driven by the strong execution of our off-price business strategies," Balmuth said. "Looking ahead, we believe our initial guidance for 2013 reflects respectable increases in both comparable store sales and earnings per share on top of exceptional gains over the past several years."

The company is forecasting a moderation of same store sales growth during the coming year with an increase in the range of 1% to 2%, following gains the prior two years of 6% and 5%. Full year earnings are expected to range from $3.65 to $3.80.

 

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Comps rise 3.1% as Target releases final monthly results

BY CSA STAFF

Target salvaged its fourth quarter with a 3.1% increase in January same store sales that followed disappointing results in December and November.

Target said sales for the five weeks ended February 2, increased 29.6% to nearly $6 billion due to the inclusion of an extra week in the recent reporting period.

"January comparable-store sales were in line with our expectations as guests responded to clearance prices on holiday inventory," said Gregg Steinhafel, chairman, president and CEO. "Our guests continue to shop with discipline in the face of a slow economic recovery and new pressures, including recent payroll tax increases. As a result, we remain focused on providing unbeatable value combined with a superior guest experience in both our stores and digital channels."

The 3.1% showing in January, driven largely by an increase in transactions, enabled Target to produce a meager fourth quarter increase of 0.4% after reporting a worse than expected 1% decline in November and flat results for December.

For the year, Target’s same store sales increased 2.7% and its total sales for the 53 week period increased 5.1% to nearly $72 billion. The company ended the year with 1,778 stores but that number will rise dramatically in 2013 as Target prepares to enter Canada with 125 new stores, the first of which is due to open next month.

Target will no longer report monthly sales results.

 

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