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Shoppers Notice Lighting

BY CSA STAFF

Barbara Greenberg and Alan Gilbert used to do most of their grocery shopping at a Safeway near their Tucson, Ariz., home. But after Safeway remodeled the unit into one of its more fashionable Lifestyle stores, the sixty-ish couple found themselves shopping more frequently at a Bashas’ several miles away. “The store is just too dark,” complained Greenberg as she stood in the Safeway produce section with spotlighting on the merchandise but almost no lighting along customer pathways.

Greenberg’s assessment is a common one. Indeed, nearly one in two consumers, 48%, can think of stores they shop in that do not have enough light, according to a new Chain Store Age/Leo J. Shapiro & Associates study of retail lighting, fitting rooms and flooring.

Interestingly, more people, by an 18% to 11% margin, think food-store lighting is too bright than too dim, the study of 813 households nationwide found.

One in five shoppers (21%) believe lighting is too dark in apparel stores, while 18% hold similar thoughts about lighting in home improvement stores and warehouse clubs.

Bright lights bothered 21% of shoppers at Wal-Mart, Target and Kmart.

Drug stores seem to please most shoppers, with just 7% complaining about stores that are too bright and 2% saying they were too dark.

Poor lighting has its greatest impact upon consumers who purchase products based on color. One-third (35%) complained that colors of items they purchased didn’t look the same at home as they did in the store.

Another 26% said the lighting was not bright enough to permit them to read packages, including instructions or ingredients, while 21% said they could not read the price.

The data is from a February 2007 national sample telephone survey of 813 consumers age 16 or older. It is part of an ongoing series of consumer studies conducted by Chain Store Age and Leo J. Shapiro & Associates, Chicago.

The full 59-page study of lighting, fitting rooms and floors is available at www.chainstoreage.com/specialreports.

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FINANCE

Home Depot Projects Lower Profit in 2007

BY CSA STAFF

Atlanta, The Home Depot Inc. said Wednesday it will pump $2.2 billion into improving its business this year even as it expects lower earnings and slim sales growth. Home Depot said that for fiscal 2007 it expects sales growth in the range of flat to an increase of 2%, a decline in comp-store sales in the middle single digit percentages and an earnings per share decline of 4% to 9%.

Including the effect of a 53rd week in its fiscal year, consolidated sales are expected to increase by 1% to 2%, and earnings per share are expected to decline by 3% to 8%, Home Depot said.

CEO Frank Blake told investors at Wednesday’s conference that like last year, “2007 also will be a difficult year.” But he said it will be a year of focus on Home Depot’s priorities and a year with “hopefully less noise.”

The “noise” was apparently a reference to the investor furor over former CEO Bob Nardelli’s hefty compensation in light of the company’s lagging stock price. Nardelli resigned in early January after six years at the helm of the company. He took with him a severance package valued at $210 million.

To improve its business, Home Depot said it will invest $2.2 billion this fiscal year in key priorities, including the opening of 115 stores. The investment includes $1.6 billion in capital spending and $600 million in expense.

Home Depot said it will recruit master trade specialists, simplify its staffing model, use more technology to aid customer service, and redesign employee compensation and reward plans. It also will invest in new merchandise and review its pricing strategies. Additionally, the chain will spend money on customer loyalty programs, direct-ship programs, credit programs and other specialty sales initiatives.

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FINANCE

Federated Plans Name Change

BY CSA STAFF

New York City, Federated Department Stores on Tuesday said it would ask shareholders to approve changing the company’s corporate name to Macy’s Group Inc. A vote to amend the corporation’s charter to accommodate the new name will be held in conjunction with Federated’s annual meeting on May 18. If approved, the company will be known as Macy’s Group Inc., effective June 1. The move comes on the heels of the company changing most of its store nameplates to Macy’s.

“Macy’s Group is the appropriate name for our company, given that about 90% of our sales involve the Macy’s brand. That said, Bloomingdale’s is—and will remain—a very important part of our company,” said Terry J. Lundgren, Federated’s chief executive. Federated Department Stores also said stronger sales at established stores and lower costs drove a 5% rise in fourth-quarter earnings. For the quarter ended Feb. 3, net income rose to $733 million from $699 million the prior-year period. Sales fell 4% to $9.16 billion from $9.57 billion, as the company shuttered 80 “duplicative” store locations. Comp-store sales rose 6.1% in the quarter.

During the quarter, Federated lowered its selling, general and administrative costs 11% to $2.31 billion.

The company also announced a $4 billion increase to its stock buyback program and said it will immediately repurchase 45 million shares for $2 billion under the plan.

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