Light at end of tunnel brighter
The better-than-expected 2.9% same-store sales decline Target produced last month was hailed as a victory of sorts even though sales growth isn’t expected to return for some time and conditions remain challenging for the apparel and home businesses.
“Guest traffic in August was essentially flat to last year, marking a meaningful improvement from second quarter trends,” Target chairman, president and CEO Gregg Steinhafel said. “We’re pleased with these results, which we believe reflect the resilience of both our guests and our strategy in a challenging environment.”
The comp decline was driven by a reduction in average transaction sizes, with apparel comps declining in the mid single-digit range and home declining in the high single digits. Looking ahead to September, even with the benefit of the late arrival of Labor day and an easy comparison to the prior year when comps declined 3%, Target is forecasting another month of negative same-store sales with a decline in the mid to low single digits.
Stop & Shop, Giant closing some Starbucks kiosks
Los Angeles Stop & Shop and Giant Food are shuttering 43 underperforming Starbucks Corp. kiosks that operate inside their stores, according to the Associated Press.
The kiosks “were not performing at levels that would allow them to continue operating,” a company spokesman said.
Twenty-six of the closures will be in Stop & Shop stores and the remainder will be at Giant.
After the closures, 56 Starbucks kiosks will remain in the chains’ supermarkets. Five new Starbucks kiosks will be added later this year, according to the report.
The spokesman said that some Stop & Shop stores will install Van Houtte automated coffee kiosks shortly after the Starbucks kiosks close.
Some of the chains’ supermarkets operate Dunkin’ Donuts in-store kiosks or offer self-serve coffee from Green Mountain.
Rite Aid same-store sales slide 1.9% in Aug.
Camp Hill, Pa. Rite Aid Corp. said its same-store sales fell 1.9% in August as out-of-work customers cut back on shopping.
The company said the difficult economy was particularly bad for its former Brooks Eckerd stores, where sales were already weaker than elsewhere in the chain. Rite Aid said its total sales fell 3.2% in August and 2.7% in the fiscal second quarter.
For the five weeks ended Aug. 29, Rite Aid said sales of non-pharmacy items, such as cosmetics, fell 5.3%, and pharmacy revenue slipped 0.2%.
Rite Aid said same-store sales at stores it purchased from the Brooks Eckerd chain fell 2.8%, with front-end sales decreasing 4.2% and pharmacy sales down 2.3%. At “core” Rite Aid stores, same-location revenue slid 1.5%, as front-end sales dropped 5.6% and pharmacy revenue grew 0.9%.
The company bought 1,850 stores from the Brooks Eckerd chain in June 2007.
For the quarter ended Aug. 29, same-store sales fell 1.1%, with front-end sales dropping 4.9% and pharmacy revenue up 0.8%. Brooks Eckerd same-store sales lost 2.3%, including a 4.7% drop in front-end revenue and a 1.4% slide in pharmacy sales.
At core stores, same-store revenue dipped 0.6%, with front-end sales off 4.9% and pharmacy revenue rising 2%.
Quarterly revenue dipped to $6.3 billion from $6.47 billion, in part because the company closed 118 stores over the past year. Rite Aid had 4,812 stores at the end of the quarter, down from 4,930 a year earlier.
In August, total revenue slid to $2.4 billion from $2.47 billion a year ago.