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Value-add, Valu-text

BY Katherine Boccaccio

A few days and about 15 meetings later, I am brimming with updates and stories from the annual International Council of Shopping Centers’ New York Deal-Making Convention in New York City.

Interestingly, my very first face-to-face sitdown at the Dec. 5-6 show delivered the biggest innovation of the two-day event.

I met with Marty Richmond, VP of marketing and corporate communications for Beachwood, Ohio-based DDR, who introduced me to the company’s newly unveiled ValuText program, a location-based mobile marketing service.

Sounds like something you’ve seen before? Not really. This program is TEXT-based, and allows DDR shopping center tenants to connect directly with shoppers via an opt-in, promotion-based platform.

In lay terms, this is how it works. A shopper pulls up to a DDR open-air shopping center – 27 centers are currently using the program, with plans to roll it out to as many as 150 DDR properties around the country – and will see signage suggesting that he or she join ValuText right away. (To opt in, a shopper texts a code to a pre-set number.) Once joined, the shopper will begin receiving offers and discounts via text from participating merchants in the center.

Here’s the most important point: Once the shopper drives away from the center, all promotional texts cease. Because the program is location-based, notifications are triggered by proximity to the property.

DDR does not charge a fee for ValuText; it is a value-added service that the landlord provides its tenants gratis. And the service is also free for shoppers, making it a win-win for everyone.

What I like most about it is that the program should serve to round out the shopping experience. Because the DDR centers currently using the program are mostly strip and power centers, many shoppers have a tendency to run in and out of their favorite stores, passing adjacent storefronts by. Texted offers could very well create some serious cross-shopping opportunities.

I will be watching this program with interest. I suspect it will be a hit with retailers and certainly with their customers.

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Dollar stores offer continued competition

BY CSA STAFF

Target faces increased competition from dollar stores, as their value proposition still resonates with cash-strapped consumers. Dollar General, for example reported that net income for its third quarter was $171 million, 50 cents per diluted share, compared with net income of $128 million, or diluted EPS of 37 cents, in the third of fiscal 2010. The company reported that same-store sales increased 6.3% for the quarter.

According to the company, the same-store sales growth was due to increases in customer traffic and average transaction amount. Sales for the third quarter increased 11.5% to $3.6 billion in the 2011 third quarter compared with $3.22 billion in the 2010 third quarter. Consumables sales continued to increase at a higher rate than non-consumables in the 2011 quarter, with the most significant growth in candy and snacks, perishables, packaged foods, health care and pet supplies, the company said. Sales were down in apparel due to continued weakness in discretionary spending by consumers, Dollar General said.

“Dollar General delivered another great quarter, and we expect to continue to build upon our strong track record of delivering excellent results for our shareholders,” said Rick Dreiling, chairman and CEO.

“For the holiday season and into 2012, we expect our customers to remain very interested in value and in ways to make their dollars go further. November sales were strong. Our Thanksgiving week and Black Friday sales suggest that we are well positioned to meet our customers’ expectations," Dreiling said.

Dollar General is raising its outlook for the fiscal year ending Feb. 3, 2012 and now expects to report adjusted diluted earnings per share in the range of $2.29 to $2.32. The company said it now expects full-year sales to increase by approximately 13% Same-store sales are now expected to increase in a range of approximately 5.6% to 5.8%. Same-store sales in the 2011 fourth quarter are expected to increase approximately 5%.

Dollar General’s confidence is echoed by the investor community. Deutsche Bank Securities is recommending Dollar General as a stock to buy on the company’s growing traffic thanks to its commitment to low prices.

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Sears to own 80% of OSH

BY CSA STAFF

HOFFMAN ESTATES, Ill. — Reuters news service has reported that the shareholders of Sears Holding Corp. will end up with 80% of the common stock in Orchard Supply Hardware stores, following an attempt to spin off the California hardware chain into a separate unit.

According to a regulatory filing, every 22.14 shares of Sears stock will entitle a holder to get one class A share and one preferred share of the new, separate company. Orchard Supply recently renamed itself “Orchard” and embarked on an initiative to remodel its 89 stores, which stretch throughout California.

The new stock will be distributed on Dec. 30. The company said it intends to list its Class A common stock under the symbol ‘OSH’ on Nasdaq.

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