consumer posts
FeedPosted Aug 19th 2009 2:30PM by Beth Gaston Moon (RSS feed)
Filed under: Deals, Consumer experience, Competitive strategy, Wal-Mart (WMT)

Hard Candy is coming to
Wal-Mart Stores (NYSE:
WMT), and I don't mean Jolly Ranchers. The high-end name in trendy cosmetics, famous for bringing unusual colors to ladies' palettes in the late 1990s, is now bringing a
specially created line to the discount retailer.
Hard Candy products will hit shelves in 3,000 Wal-Mart stores next month, and will be available internationally by the spring. Products, from gold lipstick to bright green eyeliner, will range from $5 to $10 and target women between 18 and 35 (oooh! I'm just under the wire!).
Continue reading Wal-Mart stocks shelves with Hard Candy cosmetics
Posted Mar 31st 2009 4:50PM by Michael Fowlkes (RSS feed)
Filed under: Good news, Consumer experience, Market matters, Money and Finance Today, Economic data, Housing, Recession, Financial Crisis
Consumer confidence was able to break a three month streak of declines by inching slightly higher during the month of March.
While it is great to see consumers gaining a little bit of confidence again, it is still too early to get carried away. Currently, The Consumer Confidence Index is sitting at 26. This is above the 25.3 reading in February, but below the anticipated 28 that analysts had been predicting.
Continue reading Consumer confidence inches higher in March
Posted Nov 13th 2008 1:15PM by Steven Mallas (RSS feed)
Filed under: Wal-Mart (WMT), Target Corp. (TGT), Best Buy (BBY), Sears Holdings (SHLD)
Do you like shopping at Target (NYSE: TGT)? Many people do. In fact, investors are hoping that so many people like buying things at the bullseye retailer that the company will beat earnings expectations for the third quarter. Target will be reporting on Monday, November 17. What should we expect?
Shareholders should expect a drop in the bottom line. Now, did we need a source to tell us this? Probably not. The consumer is starting to feel scared, there's no doubt about it. I'm sure everyone has anecdotal evidence concerning the fear that is out there. Consumers are afraid that the job cuts being reported in the papers will eventually reach their cubicle, so they're scaling back on spending. So, if Target merely meets the expectation for $0.49 per share next Monday, I'm sure many shareholders will breathe a sigh of relief, even though that will represent about a 12% drop in per-share profit.
I'm not so sure Target will beat, though. For one thing, Brent Archer recently reported on Target's lousy October sales data. They missed Wall Street's mark. Since Target beat the last two quarters; I figure we're due for a miss considering everything that's been going on. We shall see. I'll be interested to see how the margins are doing and what kind of position the company may be in going into Black Friday. And I'll be looking at the comps, of course.
Continue reading Earnings preview: How will Target do in Q3?
Posted Jul 21st 2008 3:02PM by Sheldon Liber (RSS feed)
Filed under: Other issues, Bad news, Press releases, Consumer experience, JPMorgan Chase (JPM), , , Recession

As a sign of how disconnected one can be, I had to ask my 12-year old about
Steve & Barry's. I had not heard of it and it is receiving way too many comments on our site to be ignored. My colleague
Zac Bissonnette started blogging about it a month ago
Steve & Barry's on the brink of bankruptcy? and the comments are still coming in strong as the
story progressed.
Steve & Barry's filed for Chapter 11 bankruptcy on July 9, 2008, and information about its status and answers to frequently asked questions can be found
here.
The company has been expanding rapidly and clearly hit a brick wall with consumer budgets severely strained and the economy facing uncertainty in the short term. However, this is supposed to be a discount chain. Perhaps the discounting amounted to selling dollars for ninety cents, and it could not make it up on volume.
This is a relatively small company, but clearly it matters to a lot of people. The number of comments we have received has surpassed most of our recent stories, even those of the Bear Stearns takeover (acquired by
JPMorgan Chase (NYSE:
JPM)) and the
IndyMac (NYSE:
IDMC) collapse.
Steve & Barry's might have had an IPO sometime in its future, but that is not likely in the current environment. What is it that makes this story so compelling to our readers? If it is because the stores are so great, what went wrong in your neighborhood?
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of any of JPM.Posted Jan 31st 2008 2:22PM by Zack Miller (RSS feed)
Filed under: Consumer experience, Competitive strategy, Penney (J.C.) (JCP), Polo Ralph Lauren'A' (RL)
Today's Wall Street Journal has an article about the cost-cutting measures going on retailer, JC Penney (NYSE: JCP). The article, essentially an interview with CEO and Chairman, Myron "Mike" Ullman III, details Ullman's changing of gears, from aggressive store expansion and online growth to scaling back in the face of a looming recession.
The CEO is expected to announce today plans to merge the buying and marketing operations for store and online sales, cutting as many as 200 jobs.
In the article, Ullman says he may scale back store expansion over the next two years.
Getting more of the consumer's wallet
Ullman says, "Half of the families in the U.S. shopped with us at least once last year. But we only get 7% of their spending. So, our biggest opportunity in the downturn is to make every visit they make to our store, Internet or catalog more productive by offering more innovation."
Continue reading Pinching pennies at Penney's
Posted Jan 14th 2008 6:21PM by Gary E. Sattler (RSS feed)
Filed under: International markets, Other issues, Industry, Federal Reserve, Recession

If you are of the mind that the American economy can't falter much worse than it already has, does that make a case for investing in the dollar right now? I would tend to think so. A
weak dollar that has been mercilessly pinned against the floor for so long looks mighty appealing to me right now. The big questions are, how long shall this domestic economic sluggishness continue and what, if anything, are the growing industrial economies willing to do about it? If the undeniable rule of buy low and sell high applies to the dollar as with any other investment, someone is going to start scooping these greenbacks up in large chunks as their value bottoms out.
The World Bank suggests that
oil prices shall decline to the middle 70's this year, giving a needed reprieve to currencies the world over. They also envision upwards of 3%
economic growth globally for 2008 and history shows that growing economies have always hungered for American consumer dollars. Couple these factors with the reality that
phantom value is finally being painfully peeled away from the American economic landscape and you have a recipe for a return to
real economic growth here at home.
I've pointed offshore for the past two quarters when discussing my perspective on safety in short term investment, yet one cannot deny that we're still fairly strong here at home.
Let no one claim that the dollar has met its doom. I'm expecting some very heartening economic news as we go through Q2 '08, and I might suggest being poised to grasp a
dollar that could rebound remarkably then.
Posted Jan 9th 2008 3:13PM by Gary E. Sattler (RSS feed)
Filed under: Consumer experience, Rants and raves, Citigroup Inc. (C), Bank of America (BAC), Bank of New York (BK), Economic data, Personal finance, Wells Fargo (WFC), Housing

Consumers are still willing to run their lives based on credit, so says an
Associated Press report. Consumer borrowing increased at an annual rate of 7.4% in November compared to an increase of just 1% in October - ah yes, the faux magic of a consumerist Christmas.
The truth of the matter rests in the cause for the rise. Is it because consumers are still confident in their
earning potential? The more likely cause is that consumers are running out of funding options, read that -- they're running out of cash.
So why is it that mortgages are getting harder to write but consumer purchases can still be funded with just a signature? Although they're deflating in value, homes still provide significant backing for lenders to lean their bets on whereas credit cards float in the unknown. With bankruptcies at an all time high, are we setting up for the final crash?
Continue reading Consumer credit numbers prove we're not scared yet
Posted Nov 12th 2007 3:27PM by Brian White (RSS feed)
Filed under: Competitive strategy, Wal-Mart (WMT), Personal finance
Wal-Mart (NYSE: WMT) instituted a new customer slogan this year: "Save Money. Live Better." Although it was intended to reinforce the retailer's position that it helps families in an age of increasing prices and general inflationary pressure, much of the public didn't get the memo, apparently.
Keep in mind that it's hard to completely trust anything by either the retailer or its watchdog groups like Wal-Mart Watch, the latter released a survey that concluded only 4% of people believe that Wal-Mart saves the average American family $2,500 annually. The same report says that customers may indeed be paying less, but Wal-Mart is not the only company that can help them pad those wallets and fill those purses.
Of course, Wal-Mart Watch says that the study that backs Wal-Mart's "$2,500" claim credits just the retailer's existence with saving the customer that much. Perhaps that's through pricing competition in the area and inflation control more than Wal-Mart customers specifically saving that much by shopping at Wal-Mart? That could certainly be inferred here.
Regardless, does the mere existence of Wal-Mart control the complete, surrounding retail ecosystem, causing prices to remain ultra-competitive? Probably so -- and Wal-Mart's "Save Money. Live Better" might just be a statement of fact rather than a corporate pitch. Either way, there's probably some good truth in there.
Continue reading Does Wal-Mart really save families $2,500 each year?
Posted Sep 4th 2007 5:00PM by Eric Buscemi (RSS feed)
Filed under: Economic data
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Or, what I really wanted to title this post: Why isn't the collapse of the housing market and an inverted yield curve driving the economy into a recession?
Last week's GDP growth of 4% was certainly a shocker. With the housing market suffering some serious weakness, the U.S. fixed income market trading like a complete mess and the yield curve being inverted (short-term rates higher than long-term rates) for more than a year, conventional wisdom would tell us that the US economy should be very close to a recession. However, GDP data is telling us quite the opposite.
With roughly 70% of the U.S. GDP derived from the consumer, the withdrawal of credit from the primary and secondary mortgage markets led many pundits to conclude the consumer is tapped out and therefore the U.S. economy is in for some serious trouble.
However, these proclamations of consumer collapse have failed to materialize. Why is that? The answer is a tight labor market, with wage increases more than offsetting weakness in the mortgage market. Three cheers for labor.
After twenty-five years of open markets, U.S. labor is now very competitive as lower-skilled jobs have moved offshore and jobs requiring higher-end skills have boomed. Most of the leading job creators, NASDAQ companies like
Microsoft Corporation (NASDAQ:
MSFT),
Oracle Corporation (NASDAQ:
ORCL) and
Cisco Systems (NASDAQ:
CSCO), were either just getting started or did not exist when this job growth boom began. Now there are hundreds, if not thousands, of companies that are seeking higher skilled employees.
At the end of the day, last week's GDP data demonstrates that good times are ahead for U.S. labor. After going through a brutal transition from a manufacturing to a service economy, labor appears it has the upper hand once again. The terribly weak mortgage market will be more than offset by the positive effects of a tight market for labor.
Posted Aug 28th 2007 4:13PM by Amey Stone (RSS feed)
Filed under: Wal-Mart (WMT), Stocks to Buy, Housing
Most of the day, the Dow Jones industrial average was in a steady, but slow decline -- the kind of drop where traders figure it's going to be a negative day, but nothing to worry too much about.
But after the much-anticipated minutes of the Federal Reserve Board's Aug. 7 meeting went public around 2 P.M. and investors didn't see the signs they were hoping for that the central bank would be willing to cut interest rates, the selling picked up. The Dow closed down about 250 points. That's less than 2% -- hardly the stuff of panic -- but more indication that a lot of professional investors are counting on the Federal Reserve to lower interest rates, and do it soon.
A decline in consumer confidence reported earlier in the day didn't help. It's becoming increasingly clear that the real danger with the meltdown in the sub-prime mortgage market is not with the financial sector. Sure, hedge funds will shut down, big banks' earnings will suffer. But the really big worry now is that the U.S. consumer could roll over.
That's the view of Robert Loest, senior portfolio manager of Integrity Mutual Funds, who visited AOL's offices today. The housing market is not going to rebound quickly or easily -- especially with so many adjustable rate mortgages still due to reset to higher rates in 2008, he warns. And he suggests investors avoid all consumer plays; not just the luxury goods stocks, but even discounters, like Wal-Mart Stores (NYSE: WMT).
Loest further recommends picking up some counter-cyclical stocks -- like bankruptcy software maker Epiq Systems (NYSE: EPIQ) or collection agency Portfolio Recovery Associates (NYSE: PRAA), both of which he owns. "Those are the kind of stocks that should do well when the economy does poorly and could make a real difference to your portfolio," he says.
Posted Jun 20th 2007 3:00PM by Eric Buscemi (RSS feed)
Filed under: Berkshire Hathaway (BRK.A), , Wendy's Intl (WEN), Economic data
Best Buy Co Inc (NYSE:
BBY),
Circuit City Stores Inc (NYSE:
CC) and
Wendy's International Inc (NYSE:
WEN) have all warned of or reported light results during the past few days, a sign that the consumer is slowing down.
- Best Buy reported a drop in gross margins, as promotions for higher-end flat panel TVs kick in. Same store sale comps came in at a positive 3% and the company is guiding to 2% to 2.5% growth.
- Circuit City warned last quarter that business was deteriorating, with its stock getting hit hard.
- Wendy's reported a 3% drop in same store sales and a big miss on its EBITDA line.
Do not expect much of an uptick in consumer spending until the Fed starts dropping rates. Consumer dependency on home equity loans to finance large purchases is over, making year-over-year comparisons hard for the retail industry.
Posted Jun 15th 2007 6:00PM by Zac Bissonnette (RSS feed)
Filed under: Rants and raves, Columns,

Yesterday I received a pre-approved offer for Washington Mutual's (NYSE: WM) Visa Platinum card. I receive dozens of offers like this every month, even though I've never asked for a single one of them. While I find most of them mildly annoying, this one was particularly presumptuous. On the front of the envelope, this was written: "REMOVE CONTENTS before you discard". Jason, a blogger at Signal vs. Noise posted a picture of an offer he had received (pictured at right) with the same warning, and mused that "They know I'm going to toss it, but they want to give me a good scare first, cause, ya know, someone will definitely steal my identity if I don't take that fake credit card out of there."
The offer he received sounds exactly the one I have in my hand, because I too received a cardboard credit card. But here's my question for Washington Mutual:
Why the (expletive) should I have to open the envelope and remove the contents before I discard a promotional mailing that I didn't ask for and don't want?
Being an investigative reporter/Chris Hansen wanna-be, I called up the number provided in the mailing to try to find out. After sitting on hold for about five minutes (and being told 11 times that the call might be being recorded), I was connected with a lady with a thick accent. After explaining that I didn't want to open an account (although she insisted I give her my reservation number and I had to repeat it five times), I asked her my question. Here's our conversation:
Zac: "Why do I have to open this junk mail before I throw it out?"
Lady: "I don't know sir."
Zac: "Well can I talk to someone who does?"
Lady: "No sir."
Zac: "Well can I just talk to your supervisor?"
Lady: "You can but she won't know either."
Zac: "Do you have a number for someone who might?"
Lady: "No sir."
Zac: "OK. Well thanks anyway, and have a nice day."
Lady: "Do you still want to open an account?"
This is a case of one of two things: Duplicitous marketing or a mass mailing that could possibly be causing identity theft. Either the warning on the envelope is there to make you think your personal information could be in danger, forcing you to open their mailing or they actually are sending me unsolicited junk mail that contains enough information to steal my identity. I have a hunch the first is the right answer, but I still can't decide which would be more evil.
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