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Pep Boys 1Q sales down, earnings up

BY CSA STAFF

PHILADELPHIA The Pep Boys – Manny, Moe & Jack reported first quarter sales of $498 million, as compared to $539.6 million for the same period last year. Comparable sales decreased 5.6%, including a 6.2% comparable merchandise sales decrease and a 2.9% comparable service revenue decrease.

Net earnings from continuing operations increased to $5.3 million or 10 cents per share (basic and diluted) from net earnings from continuing operations of $3.1 million or 6 cents per share (basic and diluted) for the comparable period in the prior year. Net earnings increased to $4.7 million or 9 cents per share (basic and diluted) from net earnings of $3.2 million or 6 cents per share for the prior year.

Interim ceo Mike Odell said, We are pleased with the progress we have made this quarter. Our service center business revenue and profitability increased. We are broadening our core automotive assortment offering and see positive trends in the categories that have been re-assorted. Our remaining non-core clearance inventory is down to $12.6 million and we expect to complete the sell-through by the end of the second quarter. And, most importantly, we are energizing our team to serve our customers, because that’s where it all starts. 

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BJ’s bubbles with CSD merchandising

BY CSA STAFF

Warehouse clubs might not seem to be the retailers best suited for building on carbonated-soft-drink introductions, given the SKU restrictions they undertake. However, BJ’s doesn’t regard itself as at a disadvantage, even given expanding CSD assortments and complementary product additions.

Working the business model is the key, and in doing so, BJ’s makes a virtue of necessity. “You still look at the 80/20 rule,” senior vp of grocery and perishables Bruce Graham told Retailing Today. “You have to be relevant to the members.”

BJ’s, which had been relatively expansive with SKU count early in the decade has lately become more conservative about the number of items carried. These days, BJ’s carries four kinds of Coca-Cola, for example, three of them low calorie. Yet, although that’s just part of Coca-Cola’s product assortment, incrementally adding one to the other, it fulfills what customers need from BJ’s.

Graham noted that line extensions are welcome, even if BJ’s won’t carry more than a handful of products in any given brand. Big promotions provide BJ’s with both sales opportunities and a forum for testing new products. The retailer brings them in when the vendors are spending major dollars on the introduction, then sees how customers respond as the initial blitz gives way to a sustainable marketing spend.

BJ’s offers the most popular CSDs, and a selection of alternatives, too. For example, complementing the CSD space selection, BJ’s may offer Izze Sparkling Juice—in fact it offers a multipack with three varieties, Blackberry, Clementine and Pomegranate—and its own brand Berkley & Jenson Sparkling Water Beverages, which can help the retailer appeal to health conscious consumers who still favor the fizz CSDs provide.

So, even if it never stocks 100 different soft drink varieties, BJ’s is content with the excitement new products bring to the market. Although it’s basically there to help its members stock up on everyday items and purchases for events, tastes change—and today that’s truer than ever. In beverages, BJ’s follows the currents rather than trying to swim against them and Graham said the approach remains effective.

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Sears Canada sees the light and gives a jolt to consumer electronics

BY CSA STAFF

TORONTO —Sears Canada has gone against the current among department stores and mid-tier operators, refurbishing and updating its electronics departments, including the one in its flagship store in Toronto. Competitors may have backed away from the sector, but Sears Canada has renewed its efforts, not out of obstinacy, but to provide a new reason for more customers to shop the store on more occasions.

Sears’ broadline formats range in Canada from true department stores in urban and affluent environments, like its downtown units in Toronto and Vancouver, to mid-tier operations in the more casual and frugal suburbs. The renewal of electronics impacts both broadliners and specialty businesses like Sears Home, said Vincent Power, a Sears spokesman.

Power said that when current Sears Canada president Dene Rogers took his position, he became an advocate for re-launching electronics to create another appealing in-store destination. “You’ve got to give them a reason to shop the store,” Power pointed out, citing Rogers’ reasoning. This pertained to men, and women who shop for men, in particular.

In downtown Toronto, Sears paired the renewed electronics department with men’s wear, which resides across an aisle. The pairing makes sense downtown, Power noted, but it isn’t a marriage that would work everywhere. Sears selected spaces for refurbished electronics departments on the basis of store-level factors, sometimes placing them adjacent to home appliances, for instance, as a complementary big-ticket department.

Sears selected the product range of its electronics section very specifically, Power noted. Televisions and home theater are major elements—a home theater living room display is in the heart of the department—but digital imaging is emphasized as well. Secondary, but still important, are laptop computers and electronic musical instruments.

Cameras and digital video products were taken out from behind glass and securely mounted so that customers can handle and scope out the products before purchasing them. Yet, flat-panel TVs absolutely command a passerby’s attention. Employees also were retrained to be more conversant.

In upgrading its electronics sections, Sears Canada also brought in cable and satellite connections. “We brought in cable and satellite because we were trying to sell HDTV without customers being able to really see what it looked like,” Power said.

Power emphasizes that the electronics effort at Sears Canada is positioned to be maximally effective in different environments. At Sears Home stores, the impact of electronics was a little different and, given the nature of the operations, the upgrade–and in some cases, the introduction–was a bit more profound.

“Most of our Sears Home stores were really just furniture and appliances,” Power said. “A handful had some electronics, but not anything extensive to speak of. Now, you go into those stores and it’s about furniture, appliances and electronics.”

The new upgraded departments were rolled out across the chain by the middle of last year and the initial review of results suggests that Sears Canada customers have responded positively, Power said, which means that Sears is back in electronics in a big way for the foreseeable future.

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