Target Q3 profit up 3.7%, beats expectations
Minneapolis — Target Corp.’s profit increased a better-than-expected 3.7% in the third quarter to $555 million, up from $535 a year earlier. The retailer’s performance was helped by solid spending and improvement in its credit card business.
Revenue rose 5.4% to $16.05 billion. Same-store sales were up 4.3% in the quarter.
“We’re very pleased with our third-quarter financial results," said Gregg Steinhafel, Target’s chairman, president and CEO in a statement. "We’re confident that we have the right strategy and team in place to drive continued strong performance this holiday season and well into the future."
Target said that its third-quarter average receivables for its credit card segment declined 9.9% to $6.2 billion in 2011 from $6.9 billion in the same period a year ago. Bad debt expense was $40 million during the third quarter, down from $110 million in the year-ago period.
Target REDcards, which include credit cards and debit cards, were used for 9.5% of sales at Target stores during the quarter, up from 5.5% a year ago.
Revenue, comps rise for Delhaize America in Q3
SALISBURY, N.C. — Network growth and higher retail inflation prompted growth in both revenues and comparable-store sales for Delhaize America, the U.S. division of Delhaize Group, for the third quarter ended Sept. 30.
Revenues realized a gain of 3.5% to $4.9 billion, compared with the year-ago period, while comparable-store sales jumped 1.9%. Delhaize, however, acknowledged that due to the economic environment and the decrease of consumer confidence, particularly in the southeastern United States, volume trends were down from the previous quarter.
The company also noted that operations were disrupted by Hurricane Irene, which resulted in the closing of 350 Food Lion stores for several days. Additionally, Delhaize America also accrued $10 million in other operating expenses — mainly due to product losses and inventory write-offs — which were partially offset by impairement reversals (worth $5 million) at Sweetbay banner stores.
Despite these setbacks, the company forged ahead with its relaunch of 200 Food Lion stores in Raleigh, N.C., and Chattanooga, Tenn., pilot markets, reporting that comparable-store sales growth increasingly outpaced the rest of the network, despite the additional price investments in the stores. Delhaize America said the company "intends to have completed the roll out of this work to between 700 and 800 stores in total by the end of 2012."
Delhaize America also said that its Bottom Dollar Food stores in Philadelphia have garnered positive feedback, while its Northeast Hannaford stores also saw a good performance, which was in line with the trends seen in the previous quarter.
Commenting on the results, Delhaize Group president and CEO Pierre-Olivier Beckers said, “We are pulling the right levers is evidenced by the momentum in the rebranded Food Lion markets that continue to deliver excellent results and outperform the rest of the network. At the same time, the economic environment, especially in the southeast of the U.S., continues to weigh on customer sentiment and their spending behavior.”
As of Sept. 30, Delhaize America had 1,640 supermarkets in operation.
Survey: Consumers consider expected savings before shopping
NEW YORK — Shoppers today are more knowledgeable than ever when it comes to finding deals on their favorite products, and many won’t even set foot in store until they have an idea of their potential savings, according to the Deloitte/Harrison Group annual American Pantry Survey.
The survey found that for nearly 30%, at least seven of 10 items in their shopping cart is discounted. What’s more, 80% of them say they do their own research and have a firm idea about what they expect to save before they step into a store. In addition, 66% of consumers shop when they know products will be on sale.
"Shoppers today expect to get a deal on the products they purchase," said Pat Conroy , vice chairman of Deloitte LLP and consumer products sector leader. "With this mindset it is critical that consumer products companies take measures to enhance brand loyalty by connecting early and often with key audiences in environments outside of the store."
The survey found that consumers believe they are smarter and more efficient when it comes to shopping. Three-quarters (75 %) of survey respondents said that that they are smarter shoppers than they were a year ago, and nearly 86% believe they are getting more precise in what they buy. Additionally, 80% of consumers say they have become more efficient at getting in and out of the store in 2011.
"Smarter shoppers know what they want, and how to get it for the best price," said Conroy. "As they become more efficient — while the consumer products industry increasingly faces a ‘crisis of similar’ — companies looking to thrive must find ways to differentiate themselves from their competition."
The survey found that 90% of shoppers go into a store knowing what they’re buying, and 83% have a set of brands in mind that they will consider. Moreover, 80% of shoppers indicate that the recession has caused them to realize what brands they care about and which ones they don’t, the survey found.
The study has some implications for private labels or store brands, as almost half (49%) of shoppers saythey are no longer interested in trying private labels or store brands. Furthermore, 90% of shoppers say that they have already have a sense of what brands and private labels work for their families — and which ones do not — while nearly the same amount 88% of consumers claim they have established which store brands and private labels are good, and which ones are not.
The 2011 American Pantry Study was conducted by Deloitte and Harrison Group. The survey polled 4,086 household shoppers and food preparers in the U.S. from Oct. 6 to Oct. 21 and has a margin of error of plus or minus 1.5 percentage points.