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Operating Practices Give U.S. Feel of a Third World Country

BY Murray Forseter

I live in a Third World country. No, I haven’t suddenly moved to what we condescendingly call a developing nation. I’m still a resident of the Good Ol’ U.S. of A. But each time I travel abroad I am reminded that we Americans are not on the cutting edge of technology, that we are way too profligate with our natural resources, that we squander our energy and in general pay no heed to an environmental disaster that only the foolish and politically obtuse fail to acknowledge and show leadership to correct.

I visit many stores across the country. Usually it’s midweek, in the afternoon. Often I’m the only customer. Yet I am amazed at how much energy is wasted inside each store, big box or small box. It’s as if they were waiting for the tour bus to stop and discharge hordes of pent-up shoppers. Why do multi-level stores (and shopping centers) think it necessary to run escalators non-stop from opening time to closing time? Why don’t they adopt the European model—only when a customer steps on an entry pad does an escalator begin either its upward or downward cycle. When the customer gets off, the escalator stops until triggered by another.

I check the restrooms of stores, malls and restaurants. Their cleanliness is a good indicator of store and company management, operating standards and the respect they have for customers (as well as the respect employees have for each other). In Europe, lights automatically go on or off in a restroom when you enter or exit. Only in a few U.S. restaurants have I observed similar energy-saving systems. Such people-sensing technology can be used to reduce lighting in sections of stores with no foot traffic. Yet few U.S. retailers deploy it.

In European hotels, when you leave your room the HVAC shuts off, to be kicked on again only when you return and insert your key into a slot that also controls room lighting. In this age of waste through excess is there any reason U.S. hoteliers aren’t implementing similar restraints on unnecessary electrical usage?

We’re justifiably proud of our advanced supply chain practices. But the rest of the civilized world is working on demand chain principles that more closely match inventory levels to customer purchases.

In Italy in 1976, my wife purchased a knit mesh bag to tote around in her pocketbook in case she made a small purchase so she wouldn’t have to use a store’s paper or plastic option. Why is any mass merchant, supermarket, drug store or convenience store still providing plastic or paper bags? Costco, Sam’s and BJ’s have shown customers can fend for themselves. Cut the paper and plastic cord. If you insist on having a bag with your logo on it, make it a reusable and either sell it or give it for free to any customer who spends $50 or more.

Twelve years ago my wife and I ate in a restaurant in Strasbourg, France. When it came time to pay, our credit card never left our sight. It was processed on a handheld device right in front of us. In an age of credit-card fraud, how reassuring to the customer would such a practice be? Why aren’t U.S. restaurants processing cards at tableside a dozen years later?

The United States is the best place to live, bar none. But we really have much to learn from the rest of the world to make our country and the rest of the planet a more eco-friendly and efficient environment.

(Chain Store Age’s Green 4 Retail conference will be held June 18-19 at the Hilton O’Hare, Chicago. For information visit www.greenforretail.com ).

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Michaels comps down for the quarter

BY CSA STAFF

IRVING, Texas Michaels Stores reported that total sales for the quarter were $847 million, a 1% increase from fiscal 2007 first quarter sales of $839 million. Same-store sales for the comparable 13-week period decreased 2.9%.

Ceo, Brian Cornell, said, “While our overall comps for the first quarter declined 2.9%, we were very encouraged with the sales of our kids and specialty craft categories, scrapbooking and frame and art supplies. Sales in April showed a reversal of trend with same-store sales up 3.1% on a strong increase in transactions. This positive sales and transaction performance gives us confidence that our new marketing and merchandising programs are connecting with our Michaels customers.”

For fiscal 2008, the company expects same-store sales growth  to be approximately flat given the current economic environment.

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Kirkland’s 1Q sales up 2.1%

BY CSA STAFF

JACKSON, Tenn. Kirkland’s reported that net sales for the first quarter ended May 3 increased 2.1% to $84.1 million from $82.3 million for the first quarter ended May 5, 2007. Comparable-store sales for the first quarter of fiscal 2008 increased 4.3% compared with an 18.8% comparable-stores sales decrease in the first quarter of fiscal 2007.

The company reported a net loss of $2.6 million, or 13 cents per diluted share, for the 13-week period ended May 3, 2008, compared with a net loss of $7.5 million, or 38 cents per diluted share, in the 13-week period ended May 5, 2007.

Robert Alderson, Kirkland’s president and ceo, said, “The first quarter results reflect strong merchandising execution and the benefits of aggressive financial initiatives that have reduced our operating costs, improved cash flow and strengthened our liquidity. During the quarter, we experienced improved customer conversions as shoppers have reacted very favorably to our merchandise mix. The positive comparable-store sales and trimming of unproductive stores led to leveraging of occupancy and distribution costs. Combined with an improvement in merchandise margin and a year-over-year reduction in operating costs of almost $5 million, we were able to post a significant improvement in our pre-tax results.

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