First Data and Associated Bank renew merchant services agreement
Atlanta–First Data Corp. and Associated Bank said Tuesday that the companies have signed a long-term merchant services renewal agreement.
Through the agreement, First Data will continue to provide merchant processing services to the bank’s business clients nationwide, providing them access to a comprehensive line of electronic payment solutions, including acceptance of all major credit cards including PIN and signature-based debit cards, gift cards, customized reporting and electronic check verification services.
The agreement continues a 30-year relationship between the two companies.
Pricing parity at hand in latest survey
The pricing gap between Target and Walmart narrowed last month to a scant 1.7% as Walmart took prices up slightly during August while Target did the opposite, according to a monthly survey by the retail research team at Credit Suisse.
The survey looks at a basket of comparable items at Target, Walmart and other competitors’ stores in the Dallas and Chicago market. The firm noted that the average basket price across all surveyed retailers was up 1.6% year over year, ledby a 5.4% pricing increase at Walmart. However, it was down 1.4% inAugust versus July, as Walmart was the only retailer to increase prices month-to-month. Meanwhile, Target decreased prices 0.9% month-to-month but increased prices by 2.7% year-to-year. As a result, Target’s price gap versus Walmart stood at 1.7% in August, excluding the REDcard Rewards 5% discount, compared with a 3.4% gap the prior month.
“The lower end consumer continues to be strained, and data suggests that retailers may be beginning to feel some resistance,” according to a research note the firm published. “However, despite Walmart’s publicly stated goal to be ‘relentless in widening the price gap,’ it seems that Walmart’s price gap is contracting. This could provide some near term relief for other retailers, but it could also cause (Walmart) to renew its focus on price leadership.”
Francis departure muddies marketing outlook, clouds Canadian entry
The revelation this week that Target chief marketing officer Michael Francis had jumped ship to become president at JCPenney was a surprising development that sucked some of the oxygen out of the retailer’s Minneapolis headquarters. Target is all about marketing and Francis was instrumental in shaping some of the most interesting customer communications the marketing world saw during the past decade. He was so highly thought of that earlier this year he was tapped to lead Target’s entry into Canada, arguably the company’s most significant longer term growth driver.
No wonder then that the press release announcing his departure was incredibly brief. They don’t get much shorter than the one Target put out at 10:45 a.m. on Monday. In exactly 44 words, Target announced that Francis had elected to leave the company and chairman, president and CEO, Gregg Steinhafel, said, “We would like to thank Michael for his many contributions and wish him the best in his future endeavors.”
The brevity of the announcement understandably aroused suspicions about the circumstances of Francis’ departure, but the information void was quickly filled when JCPenney issued a press release at 12:19 p.m. that disclosed the future endeavors referred to by Steinhafel included serving as president of JCPenney. In that capacity, Francis will be responsible for all merchandising, marketing, planning and allocation, and product development and sourcing functions.
Those responsibilities are significantly broader than what Francis possessed during his 21-year career with Dayton-Hudson and then Target where he served as an EVP since 2001 and chief marketing officer since 2008. In January of this year, Francis was given oversight of Target’s entry into the Canadian market when he was named executive committee sponsor for Target Canada.
“This is a tremendous opportunity for me to get back to department store retail,” Francis said. “I began my career working on the sales floor of the State Street Marshall Field’s in Chicago. It was there where my passion for retail began and my understanding of the power and potential of the department store was formed.”
Francis will report to incoming JCPenney CEO Ron Johnson whose arrival at the company turned heads earlier this year because Johnson previously served as SVP for Apple’s retail division where he lead the development and growth of a highly successful retail network. However, prior to that Johnson spent 15 years at Target, last serving as VP merchandising. During his tenure at Target, he had responsibility for such categories as men’s apparel, women’s apparel and accessories, children’s and home and is said to have been instrumental in leading the design initiative at Target, which began with the Michael Graves collection for home.
“I am thrilled to welcome Michael to our team,” said Johnson, who doesn’t officially join JCPenney until Nov. 1. “He is an extremely talented executive with the vision and courage to re-imagine the department store experience. His ability to innovate and deep understanding of the industry will be invaluable as we set out to transform JCPenney into America’s favorite store.”