FINANCE

NRF asks Senate to require ‘reasonable and proportionate’ cards

BY CSA STAFF

Washington, D.C. The National Retail Federation on Monday urged the Senate to approve amendments to financial services reform legislation that would direct the Federal Reserve to determine “reasonable and proportionate” transaction fees for debit cards and make it easier for merchants to reward customers who pay by cash, check or debit rather than credit card.

“Allowing banks to continue skimming off the top of debit-card payments is unfair to both merchants and our customers,” said NRF senior VP government relations Steve Pfister. “For Main Street America, these amendments would restore full faith and credit to the handling of our nation’s currency. Debit cards are merely an electronic form of checks and were initially marketed as such; banks honored debit transactions at face value because of the savings over the costs of handling paper checks.”

However, in recent years those same banks have begun charging a transaction fee on these plastic checks, exploiting the lack of specific congressional authorization for the Fed to govern these products, Pfister said.

As a result, Pfister continued, merchants estimate that they paid more than $10 billion in fees on debit-card transactions last year when paper checks drawn on the same accounts would have passed at face value, and the fees drive up prices charged to consumers.

Debit-card fees are part of the $48 billion in interchange fees collected by Visa and MasterCard banks each year. Averaging about 2% for credit cards and 1% for debit, interchange is a fee charged to merchants each time a customer swipes a card to pay for a purchase. Under card-industry practices, the swipe fees are passed along to consumers, driving up retail prices an estimated $427 for the average household each year.

Majority Whip Richard Durbin, D-Ill., last week introduced a package of amendments to the Restoring American Financial Stability Act of 2010, the financial services reform legislation being debated in the Senate, saying he wanted to help “bring some fairness” to the interchange system.

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Whole Foods Market opens new flagship in Southern California

BY CSA STAFF

TARZANA, Calif. Whole Foods Market announced that it is opening its newest flagship store in Tarzana, Southern California.

According to company, the 30,000-square-foot sales floor will feature all the local, natural and organic products that Whole Foods Market customers expect plus a collection of specialties designed to bring the community’s favorite international flavors to Whole Foods Market’s newest location. The store will feature sit-down eateries, a wine bar and the largest olive bar in Los Angeles, according to Whole Foods.

“On behalf of the store’s 200 team members and our local businesses, farmers and vendor partners, I would like to thank the Tarzana community for the warm welcome,” said George Khoury, Whole Foods Market Tarzana store team leader. “We are proud to be a part of this exciting and unique neighborhood and look forward to building strong relationships with our neighboring businesses and families. We hope to be more than your local grocery store — we’d love to be your neighborhood gathering place.”

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Weather, Easter shift takes toll on retail

BY CSA STAFF

NEW YORK An early Easter that shifted some business into March and rainy weather in the second half of the month took a toll on retailers’ sales in April. Still, many chains said combined results in March and April that stripped out the Easter impact showed solid consumer demand. A host of retailers, including Kohl’s Department Stores and Macy’s, boosted their first-quarter outlook Thursday as revenue climbed faster than expected.

Overall, retailers’ April sales rose 0.5%, missing estimates of a 1.7% increase, with about 70% of retailers falling short, Thomson Reuters data showed. Combining results for both March and April, however, sales rose 4.8%, stronger than trends seen in both January and February and the best since November 2007, Thomson Reuters data showed.

“Consumers took a breather in April,” said Ken Perkins, president of RetailMetrics, a research firm, in an Associated Press report. “But overall, retailers have to be pleased with the spring selling season.”

But Perkins added that the consumer spending recovery is still likely to be slow amid persistent high unemployment and tight credit.

According to the International Council of Shopping Centers Index of 30 retailers, the key measure was up 0.8%, compared with a 2.7% decline a year ago. For the March and April months combined, the index rose 4.9%, well above the average pace of 4.1% since January.

“The real takeaway is that profitability continued to improve on the healthy underlying demand,” said Michael P. Niemira, chief economist at ICSC.

Discounters, including Costco Wholesale Corp. and BJ’s Wholesale Club, were among the biggest winners in April. Macy’s also had solid gains. Teen merchants continue to struggle with declines.

At Macy’s, same-store sales edged up 1.1% in April, beating the decline analysts predicted. Total revenue for the four-week period ending May 2 rose 2.8% to $1.74 billion.

For the first quarter, Macy’s same-store sales rose 5.5%, above the company’s guidance. Total revenue rose 7.3% to $5.58 billion.

Kohl’s said its same -store sales decreased 7.7% in April and total sales decreased 5%, which the chain attributed to the timing of Easter and grand-opening events at Kohl’s Department Stores.

Total sales for the four-week month ending May 1 were $1.13 billion, compared with $1.2 billion a year earlier. For the quarter and year-to-date, total sales increased 10.9% to $4.04 billion, and same-store sales increased 7.4%.

Kohl’s chief executive Kevin Mansell said Kohl’s executives expected the decrease in April sales.

Kohl’s e-commerce business in April continued “to generate significant growth, achieving a 50% increase in sales in the first quarter,” Mansell said.

From a regional perspective, the Southeast and South Central regions led the company for the month. Footwear, women’s and men’s merchandise achieved the strongest comparable-store sales performance during the month.

In other same-store sales results for April:

  • JCPenney said its sales fell 3.3%, with overall sales falling 3.7% to $1.22 billion. Analysts polled by Thomson Reuters expected a 0.8% same-store sales fall. The retailer hiked its first-quarter earnings view on better-than-expected gross margins.
  • Bon-Ton Stores said its stores fell 5% in April, hurt by the shift of Easter sales into March this year. Total revenue for the four weeks ended May 1 fell 5.2% to $189.1 million, from $199.4 million in the prior-year period. For the quarter ended May 1, revenue in stores open at least one year rose 3% while total revenue rose 2.6% to $661.4 million.
  • Saks’ sales rose 3.2% in April. Analysts had expected a rise of 4.4%. Saks said total sales for the month of April rose 3.4%.
  • Dillard’s sales dropped 5%, worse than Wall Street had expected.
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