NRF survey: Retailers use background checks for safety
Washington, D.C. — A new survey released Tuesday by the National Retail Federation found that nearly all retailers rely on background checks to keep their customers, and themselves, safe.
The survey, completed by retail executives from 96 of the nation’s leading department stores, mass merchants, discounters, drug stores, grocery stores and restaurants, examined retailers’ use of background screenings during the application and employment process.
Nearly all retailers (97%) utilize background screening in some form during the application, hiring and employment process, according to the survey. Additionally, companies routinely conduct pre-employment background checks on a wide range of associates from senior executives (85.7%) to store associates (55.2%), with a particular focus on customer-facing employees and managers.
A majority of retailers report screening is conducted for most job categories, including store, distribution center and corporate office employees, since each of these positions work with customers, manage merchandise or handle sensitive information. Even senior executives undergo background screening in most companies.
The survey results highlighted current concerns that retailers have about potential EEOC guidelines that will prohibit criminal history checks.
The Equal Employment Opportunity Commission is currently considering new guidelines that would prevent all businesses from asking potential employees about their criminal history during the application process.
The so-called “Ban-the-Box” guidelines, coined by retailers based on the criminal history box seen on most application forms, was the focus of a recent EEOC meeting in July 2011. The hearing examined employment barriers for convicted criminals and ways to ease criminal re-entry into the workforce. NRF joined a dozen other industry groups to express concerns over “banning-the-box” and outline its adverse impact on retailers, employees and consumers.
New guidance could be issued by the EEOC as early as this month.
Costco Q4 profit up 11%, raises membership fees
Issaquah, Wash. — Costco Wholesale Corp. reported an 11% increase in its fourth quarter net income, below forecasts. The company also announced that it will raise its membership fees starting Nov. 1.
Costco’s net income rose to $478 million for the period ended Aug. 28, up from $432 million in the year-ago period. The quarter included a "last-in, first-out" inventory charge of four cents per share. This charge reflects a requirement that the company revalue its inventory if prices rise or fall notably.
Revenue rose 17% to $28.18 billion as membership fee revenue increased to $590 million from $533 million. The company said its performance was also helped by sales from its Mexico joint venture.
Same-store sales climbed 10% in the United States, and 19% abroad. Removing the impact of inflation in gas prices and strengthening foreign currencies, same-store sales rose 7%.
Costco announced it will raise annual membership fees by $5 to $55 for U.S. individual, business and business add-on members, as well as Canada business members beginning Nov. 1. The membership fee increase follows a similar move by BJ’s Wholesale Club.
Costco’s executive membership annual fees will also increase in the United States and Canada to $110 from $100. The maximum 2% reward tied to the executive membership will rise from $500 to $750.
For the year, Costco’s earnings rose 12% to $1.46 billion, and annual revenue rose 14% to $88.92 billion.
Same-store sales were up 10%, rising 7% in the United States and 16% overseas.
Front-end sales strong at Walgreens
DEERFIELD, Ill. — Walgreens on Wednesday reported September sales of $6 billion, an increase of 5.4%. Sales in comparable stores increased 3.1%. The effect of calendar day shifts negatively impacted total comparable sales by 10 basis points.
Total front-end sales increased 5.1% in September, while comparable front-end sales increased 3.4%. Customer traffic in comparable stores increased 0.2% and comparable basket size increased 3.2%. According to Credit Suisse analyst Edward Kelly, strong front-end results are being "driven by re-inflation, improved merchandising and store remodels."
September pharmacy sales increased 4.6%, while comparable pharmacy sales increased 3%. Calendar day shifts negatively impacted pharmacy sales in comparable stores by 10 basis points. Comparable pharmacy sales were negatively impacted by another 170 basis points due to generic drug introductions in the last 12 months and by 110 basis points due to lower incidence of cough, cold and flu. Comparable pharmacy sales also were negatively impacted by 30 basis points due to fewer flu shots. Pharmacy sales accounted for 66.4% of total sales for the month.